What Is a Layer 2? Arbitrum, Base and Optimism Explained

What Is a Layer 2? Arbitrum, Base and Optimism Explained

A layer 2 (L2) is a network that runs on top of Ethereum: it executes transactions on its own, bundles them, and posts the data back to Ethereum. Users get fees of cents instead of dollars while relying on Ethereum for security. The largest Ethereum L2s are Arbitrum, Base and Optimism (OP Mainnet), and all of them use ETH for gas and the same 0x addresses as Ethereum.

Key Takeaways

  • Layer 1: the base chain (Ethereum). Layer 2: a network that settles to it.
  • Rollups post transaction data to Ethereum; this is what most L2s are.
  • Same wallet, same address: only the network changes.
  • Gas: ETH on Arbitrum, Base and Optimism.

Major Layer 2s Compared

NetworkTypeGas tokenChain ID
Arbitrum OneOptimistic rollupETH42161
BaseOptimistic rollup (OP Stack)ETH8453
OP Mainnet (Optimism)Optimistic rollup (OP Stack)ETH10
Polygon PoSSidechain (often grouped with L2s)POL137

How Layer 2s Cut Fees

Ethereum can process a limited number of transactions per block, so users bid for space with gas fees. A rollup processes thousands of transactions off-chain and posts them to Ethereum in a compressed batch, splitting one Ethereum fee across many users. That is why swaps on Arbitrum or Base usually cost cents.

Moving Funds to a Layer 2

You need a bridge to move tokens from Ethereum to an L2 or between L2s. Native rollup bridges can take a week to withdraw back to Ethereum, while third-party and intent-based bridges move funds in seconds or minutes. Route guides: Ethereum to Arbitrum, bridge to Base, Ethereum to Optimism, and Arbitrum to Base.

When a Layer 2 Is Not the Right Choice

  • Exchange deposits: some exchanges accept a token only on Ethereum mainnet; check before sending.
  • Rare tokens: a token may exist only on one chain or have thin liquidity on L2s.
  • Native withdrawals: the official rollup bridge back to Ethereum can take about seven days for optimistic rollups; third-party bridges are faster.

More on how bridges work: cross-chain bridge.

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FAQ

What is a layer 2 in crypto?

A layer 2 is a network built on top of a base blockchain, usually Ethereum, that processes transactions off the main chain and posts data back to it. Users get lower fees while relying on Ethereum for security.

Is Polygon a layer 2?

Polygon PoS is a sidechain with its own validators, often grouped with layer 2s because it is EVM-compatible and cheap. Rollups such as Arbitrum, Base and Optimism post their data to Ethereum.

Do layer 2s use ETH for gas?

Arbitrum, Base and Optimism use ETH for gas. Polygon PoS uses POL.

Is my address the same on a layer 2?

Yes. EVM layer 2s use the same 0x address as Ethereum, so the same wallet works on all of them; only the network changes.