Many people in the crypto world don't even understand the basic meanings of L1 and L2. Today, I'll explain it to you!

In the crypto world, L1 and L2 mainly refer to the layered architecture of blockchain, not market data. In simple terms:

1️⃣ L1 (Layer 1) — the main chain itself
•Definition: The foundational network layer of the blockchain, where all transactions and smart contracts are executed directly on the main chain.
•Example:
•Bitcoin (BTC)
•Ethereum
•Solana
•BNB Chain
•Features:
•Has its own independent consensus mechanism (PoW, PoS, etc.)
•High security, but limited scalability (low TPS)
•Disadvantages:
• Limited trading speed, transaction fees can be high
•Analogy: Like a highway, all cars (transactions) run directly on this road, and it gets congested with more people.

2️⃣ L2 (Layer 2) — the "acceleration layer" on the main chain
•Definition: A scalability solution built on L1 that handles a large number of transactions off-chain or on sidechains, and then submits them in batches to the main chain.
•Example:
•Bitcoin's Lightning Network
•Ethereum's Arbitrum, Optimism (Rollup)
•zkSync, StarkNet (ZK Rollup)
•Features:
•Fast transaction speed, low fees
•Rely on L1's security for final settlement
•Disadvantages:
•The technology is more complex, which may pose compatibility/centralization risks.
• Analogy: Several "secondary roads" (L2) were built next to the highway (L1), first running on the secondary roads, and finally settling on the highway.

Summary:
•L1: Blockchain underlying network → Responsible for security and final settlement
•L2: L1's accelerator → responsible for speeding up and reducing costs