Layer-2s and token types: utility, governance and meme

As you explore altcoins, two ideas come up again and again: layer-2 networks, which help blockchains scale, and token types, which describe what a token is supposed to do.

The main blockchain, such as Ethereum or Bitcoin, is called layer 1. It is secure but limited in speed and can be expensive when busy. A layer 2 (L2) is a separate system built on top that handles many transactions cheaply and then reports the results back to layer 1.