What are Layer 2 networks, and why are they important for Ethereum?
What the interviewer wants to hear
- Ethereum L1 has limited throughput and higher fees
- L2 rollups execute transactions off L1 and post data and proofs to L1
- Optimistic rollups use fraud proofs and a challenge window; ZK rollups use validity proofs
- Security is inherited from Ethereum, with some trust in sequencers and upgrade keys
- Blobs (EIP-4844) made L2 data much cheaper
Model answer
Ethereum mainnet is very secure but can only process a limited number of transactions, so fees rise when demand is high. Layer 2 networks, mostly rollups like Arbitrum, Optimism, Base, zkSync and Starknet, run transactions on their own chain and post compressed data back to Ethereum. Optimistic rollups assume batches are valid and allow anyone to submit a fraud proof during a challenge window, which is why withdrawals take about a week. ZK rollups post a validity proof, so withdrawals can be faster once the proof is verified. Because the data and proofs live on Ethereum, users get much of its security at a fraction of the cost, especially since blobs were added. The trade-offs are trust in the sequencer for ordering and liveness, upgrade keys held by teams, and bridging between chains.
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