What is the difference between a layer 1 and a layer 2 blockchain?

A layer 1 is a base blockchain such as Bitcoin or Ethereum; a layer 2 is a separate protocol built on top of a layer 1 to extend it — often to improve scalability.

• Layer 1 — the base-layer blockchain itself, which provides the security and settlement (Bitcoin, Ethereum, and Avalanche are examples).
• Layer 2 — an application or protocol layered on top of a layer 1 to add capability, frequently to relieve congestion and high fees. Rollups are a common type: they process many transactions on their own layer and then "roll them up," submitting them in bulk down to the layer 1.

The key security distinction is where a layer 2 gets its guarantees. A rollup derives its security from the underlying layer 1 (so it is about as secure as that base chain), whereas a sidechain relies on its own separate security. Layer 2s are one of the main answers to the scalability problem: they let far more transactions happen while still anchoring to a secure base layer.

Go deeper:

• Layer 2 — ethereum.org — how rollups extend a layer 1, and how a rollup's security differs from a sidechain's.