Summary
- Layer-two networks are protocols build on layer-1 blockchains
- Layer-two networks boost scalability and transactions speeds
- Ethereum is the most common layer-1 blockchain for layer-two networks
Layer-two networks in decentralized finance are protocols build on layer-1 blockchains like Ethereum. They are built to improve scalability and increase the speed of transactions while taking advantage of the security features of the main layer-1 blockchain.
In some cases, layer-two networks can process thousands of user transactions per second, which is not always possible on layer-1 blockchains.
Ethereum is the most popular blockchain for layer-two networks that include channels, plasma, and sidechains.