2025-08-30
In the development process of blockchain technology, although the underlying public chains such as Bitcoin and Ethereum have built a decentralized trust system, problems such as slow transaction speed, high fees, and low throughput have gradually become obstacles to large-scale application. To solve these pain points, Layer 2 technology has emerged, which is regarded as a key solution to improve blockchain performance. So, what is Layer 2 exactly? How can it achieve breakthroughs without changing the underlying chain architecture? What are the practical applications?
Layer 2 does not refer to a single technology, but an additional protocol layer built on top of the blockchain main chain (Layer 1). Its core idea is to transfer some computing and transaction processing off-chain, and the main chain is only responsible for recording key data and final state, thereby reducing the burden on the main chain and improving overall performance. The Layer 2 solution achieves higher transaction processing speed and lower costs while maintaining the decentralization and security of the blockchain. For example, HashKey Exchange When exploring more efficient digital asset trading services, it also closely follows the development of Layer 2 technology, striving to bring users a better experience.
Layer 2 includes multiple technical solutions. State channels are a typical representative. Taking Lightning Network as an example, it allows users to conduct multiple transactions off-chain and submit the final results to the main chain only at the end of the transaction, greatly improving the efficiency of small high-frequency trading. Sidechains are independent blockchains that achieve asset transfer and data interaction with the main chain through a bidirectional anchoring mechanism. Rollup technology packages multiple transactions into a batch and submits them to the main chain, compresses the data, and then verifies it, effectively improving the throughput of the main chain. These technologies optimize the performance of the blockchain from different perspectives to meet diverse application needs.
Layer 2 has a wide range of applications. In the field of decentralized finance (DeFi), it can reduce transaction costs, improve fund circulation efficiency, and allow more customers to engage in activities such as lending and trading. HashKey Exchange If Layer 2 technology is applied, it can further optimize the DeFi service experience. In the gaming field, Layer 2 can support large-scale on-chain game interactions, reducing player waiting time. In daily payment scenarios, Layer 2 technology can achieve second-level arrival and low transaction fees, promoting the popularity of blockchain payments. With the maturity of technology, Layer 2 is gradually becoming an indispensable part of the blockchain ecosystem.
What is HashKey Exchange? HashKey Exchange is one of the first regulated cryptocurrency exchanges in Hong Kong to obtain a license from the Securities and Futures Commission (SFC). It supports fiat currency deposits and trading in Hong Kong dollars (HKD) and US dollars (USD), offering users spot trading services for mainstream digital assets including Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). The platform also provides OTC (over-the-counter) services to meet the needs of large-value asset transactions and fiat currency conversion, ensuring more flexible and private trading. To cater to the asset allocation needs of different investors, HashKey has launched the HashKey Earn channel, offering users fixed-term and demand financial products to achieve stable appreciation of crypto assets. The platform holds ISO 27001 and 27701 security certifications, employs a 98% cold wallet storage mechanism, and incorporates security measures such as two-factor authentication to provide users with a stable and reliable trading environment. Download link: https://www.hashkey.com/en-US/download Disclaimer: This material is for general information purposes only. It does not constitute, nor should be interpreted as, any form of solicitation, offer or recommendation of any product or service. It does not constitute investment, tax or legal advice. In no event should any news release be considered as recommendation of a particular type of digital asset. This material may include market data prepared by HashKey Exchange or data from third party sources. While HashKey Exchange makes reasonable efforts to ensure the reliability of such third-party information, such information may have not been verified. Graphics are for reference only. We make no representation or warranty, express or implied, to the timeliness, accuracy or completeness of the information in this material. Information may become outdated, including as a result of new plans, regulations or changes in the market. In making investment decisions, investors should not solely rely on the information contained in this material. The risk of loss in trading digital assets can be substantial and is not suitable for all investors. Any forward-looking statements in this material is subject to several conditions, uncertainties and assumptions. We undertake no obligation to update or revise any forward-looking statements. The English version shall prevail if there is any inconsistency between the English and Chinese versions.