Layer 2 Solutions
Layer 2 protocols take advantage of Ethereum’s decentralized security model while negating its scalability constraints by adding another layer of transactions on top of it . Unlike layer 1 solutions, layer 2 solutions do not make any changes to the underlying network and are instead implemented as smart contracts on top of the layer 1 network. There are mainly three ways in which layer 2 scaling solutions are exercised - (a) State Channels, (b) Plasma, or (c) Rollups.
To read more about these techniques, kindly refer to our appendices: