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Layer 2 chains, often called roll-ups, take many transactions and "roll them up" into one processed batch, which is then settled onto Ethereum's mainnet. This process drastically lowers costs, sometimes to less than a tenth of a cent, while maintaining the same level of security as the main network.
Upgrades and Adoption
Major upgrades—like Ethereum's Denkin upgrade in March 2024 and Pectra upgrade in May 2025—are expected to reduce Layer 2 fees by 90-95%. Today, around 95% of Ethereum activity occurs on these Layer 2 chains, making the mainnet a settlement layer rather than the primary transaction platform.