Layer 2 Scaling and Fee Impact

Layer 2 scaling solutions move transaction execution off the main chain to increase throughput and reduce costs. By bundling transactions and posting only the final state to the main layer, these protocols significantly lower the fee burden on users.

This has a profound impact on the fee market of the base layer, as it changes the nature of the demand for block space. While it improves accessibility, it also shifts the security model, as the base layer must now secure the validity of the Layer 2 state transitions.

This creates a tiered security structure where the main chain acts as the ultimate arbiter of truth. The relationship between Layer 1 and Layer 2 is a key area of research in protocol physics, as it balances scalability with the necessity of decentralized security.