# Layer 2

*Layer 2 pertains to a stratum in the structure of a blockchain constructed on the base layer, also known as Layer 1. Its purpose is to enhance the blockchain's scalability and performance by allowing off-chain transactions and data storage. Layer 2 solutions seek to solve the limitations of Layer 1 blockchains, which can be slow and expensive due to the requirement to process and verify every transaction on the network. By moving some transactions and data storage off-chain,*&#x20;

*Layer 2 solutions can potentially lighten the load on the base layer and enhance the speed and cost of transactions. There are numerous types of Layer 2 solutions, such as payment channels, sidechains, and state channels.*

*These solutions employ various methods to facilitate off-chain transactions and data storage, such as the use of smart contracts or multisignature addresses to execute transactions and secure data.*&#x20;

*Layer 2 solutions represent a vital area of progress in the blockchain field, as they have the potential to significantly enhance the scalability and usability of blockchains. However, they also come with their own set of challenges and trade-offs, and their implementation and adoption can vary based on the specific requirements and objectives of a given blockchain network.*
