A scaling solution or Layer-2 solution is a blockchain protocol that works on top of an existing, Layer-1 blockchain network. The technology helps improve the scalability of the underlying Layer-1 network, increasing its transaction speed and equipping it with higher transaction processing capabilities.
Scaling solutions became essential as the original blockchain networks experienced high adoption, causing network congestion issues, raising transaction fees, and inconveniencing users. The most popular blockchain with several Layer-2 scaling solutions is Ethereum, home to the largest number of decentralized applications (dApps).
Networks like Ethereum and Bitcoin are limited by their proof-of-work consensus mechanisms, which prevent them from achieving high throughput. Their performance gets further impacted to the downside amid rising adoption, resulting in delays in processing transactions.
Scaling solutions connect to the main chains, allowing independent blockchain transactions to take place on their infrastructure without further weighing down the Layer-1 blockchain. While providing improved scalability and efficiency, Layer-2 scaling solutions offer the same security benefits as the main chain or the Layer-1 network over which they operate.
