The Scalability Constraint
Ethereum’s base layer processes approximately 15–30 transactions per second, with fees that can spike to $50+ during periods of high demand. For payment applications—which require sub-second finality and sub-cent fees—this is fundamentally inadequate. Layer-2 solutions address this by moving transaction execution off the main chain while inheriting its security guarantees.
Rollup Architectures
The dominant L2 paradigm is the rollup. There are two main types:
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Optimistic Rollups (Arbitrum, Optimism): Assume transactions are valid by default, with a challenge period during which fraudulent transactions can be disputed. Settlement takes approximately 7 days for full finality, though “fast exits” via liquidity providers can achieve near-instant settlement.
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Zero-Knowledge Rollups (zkSync, StarkNet): Generate cryptographic proofs that batches of transactions are valid, enabling instant finality on the base layer. Historically more expensive to generate proofs, but rapidly becoming cost-competitive.
Both architectures can achieve 2,000–4,000 transactions per second with fees below $0.01, making them viable for mainstream payment applications.
Payment-Specific L2s
A new generation of payment-focused L2s is emerging. These networks optimize for the specific requirements of payments: low latency, high throughput, and predictable fees. They often use centralized sequencers for speed (with decentralized fallback for security) and integrate directly with fiat on/off ramps.
The end state is likely a multi-L2 ecosystem where different networks specialize in different use cases—some optimized for DeFi composability, others for high-frequency payments, and still others for institutional settlement.
