What Is Ethereum Layer 2?

An Ethereum layer 2 processes transactions off mainnet and posts data back to Ethereum. Learn how rollups work, why fees differ, and how to pick an L2.

By Jonathan West · Updated October 2026

An Ethereum layer 2 is a separate network built on top of Ethereum that processes transactions itself and posts its data back to Ethereum, using Ethereum as its settlement layer so users get lower fees while inheriting Ethereum's security.

It lets people use decentralized applications with lower transaction fees while continuing to rely on Ethereum mainnet to secure their funds.

About ethereum layer 2

An Ethereum layer 2 is a separate network built on top of Ethereum that processes transactions itself and posts its data back to Ethereum. Ethereum mainnet serves as the settlement layer for these newer networks. Ethereum itself functions as layer 1, which answers the question of whether Ethereum is layer 1 or 2. By executing activity off the main network and recording the resulting data back to layer 1, an Ethereum layer 2 provides lower transaction costs while continuing to rely on the security of Ethereum mainnet. Networks that store their data directly on Ethereum mainnet operate as extensions of Ethereum, which ethereum.org refers to as rollups.

How it actually works

An Ethereum layer 2 works by separating transaction execution from final settlement. Ethereum itself is layer 1. It acts as a base settlement layer for newer networks. A layer 2 network operates above that base layer. It handles the computation and processing of transactions on its own system, then submits transaction data back to Ethereum mainnet. According to ethereum.org, storing this data directly on Ethereum mainnet greatly enhances user security. Projects that store their data outside of Ethereum mainnet function as independent networks rather than true Ethereum rollups.

Rollup systems generally fall into two architectural categories based on their design: optimistic rollups and zero-knowledge rollups, commonly called ZK rollups. Examples documented on ethereum.org include Base, an optimistic rollup built with the OP Stack, and Arbitrum One, an optimistic rollup governed by an Arbitrum DAO. An example cited by ethereum.org is Starknet, a ZK rollup based on STARKs and the Cairo VM. Both rollup styles post data back to layer 1 to settle on Ethereum, using Ethereum's underlying network to secure user balances.

Transaction costs differ between layer 1 and layer 2 networks. Data cited by ethereum.org shows an average transaction cost of about $0.019 on Ethereum mainnet compared to about $0.0016 on Ethereum-backed networks, with some networks advertising fees around $0.01. These are point-in-time figures that change. Because these figures change, users should check live fees before submitting transactions. To understand the unit costs that influence these charges on the base chain, see What Is Gas and Gwei. TheFusaka upgrade in December 2025, which introduced PeerDAS as a more efficient method for layer 2 networks to post and retrieve data from Ethereum.

Evaluating network safety requires examining the underlying technology, smart contract security, and overall network maturity. Safety depends on the underlying technology, smart contract security, and network maturity. Moving assets between Ethereum and a layer 2 uses a bridge. Bridges carry their own risk. Anyone planning to move funds should inspect the network's own official documentation and begin with small amounts. For side-by-side breakdowns of specific environments, explore the Ethereum vs Arbitrum and Ethereum vs Base guides, or review the Arbitrum vs Optimism comparison.

Start here

1Identify which decentralized application or digital asset you plan to use based on which apps and assets you need.
2Review the chosen layer 2 network's own documentation before moving funds.
3Check live network fee conditions across both Ethereum mainnet and the target layer 2 to understand current transaction pricing before moving funds.
4Initiate a bridge transfer using a small test amount first, keeping in mind that bridges carry their own risk.

Strengths

Lower transaction fees than Ethereum mainnet, with cited average fees around $0.0016 compared to about $0.019 on layer 1.
Inherits the underlying settlement security of Ethereum mainnet by storing transaction data directly on the layer 1 blockchain.
Access to diverse scaling architectures, including optimistic rollups like Base and Arbitrum One, and ZK rollups like Starknet.

Common misunderstandings

Moving assets between layers requires using a bridge, and bridges carry their own risk.
Security varies across networks based on underlying technology, smart contract implementation, and the maturity of the rollup.
Transaction fee rates are point-in-time figures that change, requiring users to check live fees.

Common questions

Is Ethereum a layer 1 or layer 2?

Ethereum is a layer 1 network. It serves as the underlying base and settlement layer where transactions achieve final settlement. Layer 2 networks are separate systems built on top of Ethereum that process transactions independently before posting data back to layer 1.

Which is the best layer 2 for Ethereum?

There is no single best layer 2 network for Ethereum. The right choice depends on the specific applications you plan to access, the assets you hold, prevailing transaction fees, and whether you prefer an optimistic rollup or a ZK rollup. Users can review head-to-head guides like Arbitrum vs Optimism, Ethereum vs Arbitrum, and Ethereum vs Base to compare individual options.

Is layer 1 better than layer 2?

Layer 1 is not better than layer 2 because both layers serve different purposes within the broader Ethereum system. Layer 1 offers direct settlement and security on Ethereum mainnet but usually carries higher transaction costs per ethereum.org's point-in-time figures. Layer 2 delivers lower fees while relying on layer 1 for ultimate security.

Are layer 2 networks safe?

Safety on a layer 2 network depends on the underlying technology, smart contract security, and overall network maturity. Storing transaction data on Ethereum mainnet greatly enhances user security, but bridges carry their own risk. According to ethereum.org, users should start with small transactions and stay informed by reading official documentation.

Why are layer 2 fees lower?

Layer 2 fees are lower because the network processes transactions itself and posts its data back to Ethereum. System improvements like the December 2025 Fusaka upgrade introduced PeerDAS, making data posting and retrieval more efficient for rollups.

What is a rollup?

A rollup is a layer 2 network that processes transactions off mainnet and stores the resulting transaction data directly on Ethereum. According to ethereum.org, storing data on Ethereum mainnet makes the network an extension of Ethereum that inherits layer 1 security. Projects that store transaction data elsewhere are considered independent networks instead of rollups.

Sources

Ethereum.org, Official Layer 2 Documentation

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