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Layer 1/ Layer 2

In the context of cryptocurrency and blockchain technology, "layer 1" and "layer 2" refer to different levels of the technology stack.

Layer 1 refers to the underlying blockchain infrastructure and protocols that form the foundation of a cryptocurrency or blockchain system. This includes the consensus algorithm, the data storage and distribution mechanisms, and the cryptographic security measures.

Layer 2 refers to additional protocols and technologies that are built on top of the layer 1 infrastructure. These technologies are designed to improve scalability, privacy, or other aspects of the blockchain and may use various techniques, such as off-chain transactions, sidechains, or state channels.

Layer 2 technologies are often seen as a way to improve the performance and scalability of a blockchain without requiring changes to the underlying layer 1 infrastructure. They are an important area of development and innovation in the cryptocurrency and blockchain space and are used in a variety of different applications.

Overall, the distinction between layer 1 and layer 2 technologies is an important aspect of the cryptocurrency and blockchain landscape and is an area of ongoing development and research.

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