Layer 2 (Rollup)

A layer 2 (L2) is a network that executes transactions off the main blockchain (layer 1) and then posts compressed proofs or data back to it, inheriting the parent chain's security while dramatically reducing cost and latency. The two dominant designs are optimistic rollups — which assume transactions are valid and allow a fraud-proof challenge window — and ZK rollups, which post a cryptographic validity proof with every batch. Networks like Base, Optimism, Arbitrum, and zkSync are L2s on top of Ethereum. Moving computation to an L2 can reduce gas fees by 10–100×, making micro-transactions and high-frequency asset transfers economically viable. For tokenized domain operations — routine transfers, DNS configuration updates, sub-domain issuance — executing on an L2 means users pay cents instead of dollars while the asset's provenance remains anchored to Ethereum mainnet. A cross-chain bridge moves assets between L1 and L2 when needed. Namefi leverages L2 infrastructure to make domain tokenization practical for everyday registrants, not just large portfolio holders. Source: Ethereum Foundation — Layer 2.