Layer-2 networks and sidechains are essential components of Ethereum’s scaling solutions. These technologies aim to address the network’s limitations in processing transactions efficiently and quickly.
Layer-2 networks are built on top of the main Ethereum blockchain and help reduce congestion by handling transactions off-chain. This allows for faster and cheaper transactions compared to using the main Ethereum network alone. Sidechains, on the other hand, are separate blockchains that can interact with the main Ethereum network. They provide additional capacity for processing transactions and executing smart contracts.
By utilizing layer-2 networks and sidechains, Ethereum can scale to accommodate a larger number of users and transactions without compromising security or decentralization. These solutions are crucial for improving the overall performance and usability of the Ethereum network, making it more accessible to a wider range of users and applications.