A Layer 2 (L2) is a network built on top of a Layer 1 blockchain to process transactions faster and more cheaply than the base chain could alone, while still relying on that base chain for final security and settlement. Arbitrum, Optimism, and Base are examples of Ethereum Layer 2s.
How it works
Most modern Layer 2s use a "rollup" design: transactions are executed off the main chain, batched together, and then a compressed summary (plus, depending on the design, a cryptographic proof or a fraud-challenge window) is posted back to the Layer 1. This lets the L2 offer much higher throughput and lower fees than the base chain, while still ultimately inheriting the Layer 1's security guarantees — an attacker can't rewrite an L2's history without also being caught by the underlying Layer 1's verification process.
Why it matters for Shariah screening
A Layer 2 is assessed on the same basis as any other protocol — its own tokenomics, fee structure, and consensus/sequencing design — rather than being treated as identical to its base chain. An L2 that operates a native token with its own reward and governance mechanics needs its own independent screening against riba, gharar and maysir, the same way any Layer 1 does; inheriting security from Ethereum doesn't mean inheriting Ethereum's Shariah verdict. In practice, most Layer 2 tokens are governance- or fee-related rather than yield-bearing, which tends to keep their riba exposure limited to whatever staking or incentive programs the specific network runs.