"Layer 2" refers to the second layer of technology that is built on top of a blockchain network. The first layer, or "layer 1," is the base network and its infrastructure, while layer 2 focuses on improving scalability and speed without sacrificing security.
In the context of trading, layer 2 solutions can help make transactions faster and more efficient by moving some of the processing off the base network. For example, a layer 2 solution could allow for off-chain transactions that are later verified and recorded on the main blockchain
By using layer 2 solutions, trading platforms and exchanges can potentially handle more transactions and provide a better user experience for their customers. This is particularly important for cryptocurrencies, where high volumes of transactions and slow speeds can lead to congested networks and long wait times for confirmations.