A Technical Wiki
The base chain is the foundation. Every node validates every transaction. Consensus is global and final. The throughput ceiling of 15 transactions per second is not a bug -- it is the cost of absolute security. Layer 1 does not need to be fast. It needs to be correct.
The base chain provides two irreplaceable services: data availability and settlement finality. Everything above depends on these guarantees. Without the bedrock, there are no layers.
The bridge translates between layers. Assets and messages cross the boundary through cryptographic commitments -- fraud proofs for optimistic systems, validity proofs for zero-knowledge systems. The bridge is the narrowest point in the protocol stack, and its security model defines the trust assumptions of everything above it.
A bridge is only as secure as its weakest verification mechanism. Validity proofs offer mathematical certainty. Fraud proofs offer economic certainty through challenge periods. Both inherit base layer security, but through different paths.
The rollup compresses hundreds of transactions into a single proof submitted to the base chain. The sequencer orders transactions, the executor processes state transitions, and the prover generates the commitment that anchors everything to Layer 1.
Batch compression ratios of 10-100x are typical. The cost of a single Layer 1 transaction is amortized across hundreds of Layer 2 operations, making sub-cent transaction fees sustainable.
State channels allow participants to transact off-chain with instant finality. Only the opening and closing states touch the base chain. Between those anchors, thousands of state transitions occur with zero on-chain cost.
Plasma chains create nested hierarchies of child chains, each processing independently and committing Merkle roots upstream. The exit game -- the mechanism by which users can withdraw to Layer 1 even if the child chain operator disappears -- is the critical security guarantee.
DeFi
Decentralized exchanges, lending protocols, and derivatives markets operating at Layer 2 speeds with Layer 1 security guarantees.
Gaming
Real-time game state transitions processed off-chain. Thousands of moves per second, settled in periodic batches.
Identity
Verifiable credentials issued and checked at Layer 2 speed. Privacy-preserving proofs generated without touching the base chain.
Payments
Sub-cent transaction fees make micropayments viable. Streaming payments, tipping, and point-of-sale become economically feasible.
Social
Decentralized social graphs where follows, likes, and posts are state transitions on a social Layer 2.
Data
Verifiable computation results committed as proofs. Oracles, AI inference, and analytics settled on-chain through Layer 2 compression.