Layer 1 vs Layer 2 refer to different blockchain solutions for scalability and performance. Layer 1 is the base blockchain network, such as Bitcoin or Ethereum, that handles transactions directly. Layer 2, on the other hand, is built on top of Layer 1 and optimizes scalability through solutions like state channels, sidechains, or rollups. Layer 2 networks process transactions off-chain and reduce the load on Layer 1, increasing transaction speeds and reducing costs, making them ideal for high-volume decentralized applications and financial platforms.
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