In the decentralized blockchain ecosystem, a “layer-2 protocol” refers to a solution that can be used in conjunction with a “layer-1 blockchain“, such as Electra Protocol. A layer-2 solution refers to a network or technology that operates on top of an underlying blockchain protocol to improve its scalability and efficiency. This category of scaling solutions entails shifting a portion of a blockchain protocol’s transactional burden to an adjacent system architecture, which then handles the brunt of the network’s processing and only subsequently reports back to the main blockchain to finalize its results. By abstracting the majority of data processing to auxiliary architecture, the base layer blockchain becomes less congested — and ultimately more scalable.
For instance, Bitcoin is a layer-1 network, and the Lightning Network is a layer-2 solution built to improve transaction speeds in this fashion on the Bitcoin and other compatible networks. Electra Protocol is theoretically also capable of using the Lightning Network, as it is a Bitcoin-based solution.