Layer 1 vs Layer 2 refer to different levels of blockchain architecture. Layer 1 refers to the base blockchain protocol, such as Bitcoin or Ethereum, where transactions are processed and validated. Layer 2 solutions, like the Lightning Network or Optimistic Rollups, are built on top of Layer 1 blockchains to enhance scalability, reduce fees, and speed up transactions. Layer 2 solutions aim to improve Layer 1 performance without compromising security or decentralization, offering better efficiency.
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