LAYER 2 SCALING: ARBITRUM, OPTIMISM, BASE
Plain English
Ethereum mainnet is slow and expensive — $20+ per swap during busy periods. Layer 2 networks (Arbitrum, Optimism, Base) bundle transactions off-chain and post compressed proofs to Ethereum, cutting fees by 90%+.
Going deeper
Optimistic rollups (Arbitrum, Optimism, Base) assume transactions are valid by default and rely on fraud proofs during a 7-day challenge window. ZK rollups (zkSync, Starknet) post cryptographic validity proofs immediately. Both inherit Ethereum's security while offering 10-100x throughput improvements. Most major DeFi protocols (Aave, Uniswap, GMX) deploy on multiple L2s. Bridges connect L1 and L2 but carry their own risk — bridge hacks have lost billions since 2022. Base, launched by Coinbase in 2023, has become a major L2 due to fiat on-ramp integration.
Examples
Arbitrum savings
A Uniswap swap on mainnet costs $25 in gas. The same swap on Arbitrum costs $0.50. For active traders making 10+ swaps a day, L2s save thousands per year.
Bridge risk
The Wormhole bridge was hacked for $325M in 2022 due to a smart-contract bug. Use battle-tested bridges and never bridge more than you can afford to lose in a single transaction.