Bitcoin and chains · 12 / 86
Layer 2s and rollups
A layer 2 tries to do the busy work elsewhere and post a summary back to a chain like Ethereum. You need to know where the money actually sits, and how long a withdrawal can wait.
Why they exist
The base chain gets expensive when everyone uses it directly. A rollup batches many actions into one posting. That can be cheaper. It adds a new set of operators.
Where the money sits
Often the funds are locked in a contract on the base chain, and the rollup keeps the detailed balances. If the rollup's operators stall, your withdrawal can wait. Some systems have an escape hatch. Some only promise one.
A logo that says secured by Ethereum is a claim. Read whether you can exit without the operator's permission.
Check yourself
Is a layer 2 the same as holding coins on the base chain yourself?
No. There is an extra system, and an exit can take time.
After this you can ask where the funds are locked, and what happens if the operator stops.