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Following a sharp rise in demand for decentralized applications (dApps), recent months have seen an unprecedented number of scaling solutions developed on the Ethereum blockchain. This includes protocols such as rollups, Plasma, state channels, and sharding. Ethereum scaling solutions created on top of the blockchain are referred to as ‘layer-2’ or ‘layer 2’ solutions. As there is no distinction between the two, we will be referring to both layer-2 and layer 2 scaling solutions throughout this article. There are various types of Ethereum layer 2 protocols, but how do they work? Also, how do layer-2 scaling solutions benefit the main Ethereum blockchain?

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