> For the complete documentation index, see [llms.txt](https://docs.leather.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.leather.io/learn/what-are-bitcoin-layers-world-of-bitcoin-layer-2.md).

# Bitcoin Layers explained: What is Bitcoin Layer 2?

Bitcoin layers are networks built on Bitcoin that add speed, lower fees or smart contracts. The main kinds and their trade-offs.

A Bitcoin layer, often called a Bitcoin L2, is a network built on top of the Bitcoin blockchain (layer 1). It processes transactions or runs applications off the main chain and ties back to Bitcoin for settlement or security.

Bitcoin's main chain favors security and decentralization over throughput: about one block every 10 minutes, with limited space. Layers add what the main chain does not, such as instant payments or smart contracts.

## Kinds of layers

* **Payment channels:** two parties lock bitcoin on the main chain and pay each other off chain. The Lightning Network works this way. See [What is the Bitcoin Lightning Network?](/learn/lightning-network.md).
* **Sidechains:** separate blockchains with their own rules, connected to Bitcoin by a two-way peg. Some are run by a federation of known parties.
* **Smart contract layers:** chains that add programmable contracts and tie their consensus to Bitcoin. Stacks does this with Proof of Transfer. See [What is the Stacks Bitcoin L2?](/learn/what-is-stacks.md).
* **Rollups:** batch many transactions and post a compact record or proof to Bitcoin. On Bitcoin, these designs are early.

## Trade-offs

* **More features:** smart contracts, faster payments, other assets.
* **More trust assumptions:** a layer adds its own operators, signers or federation. Check who can move or freeze funds on it.
* **Bridging risk:** moving bitcoin onto a layer depends on the peg or bridge that holds it.

## Layers in Leather

Leather supports Bitcoin and Stacks, including sBTC, the bitcoin-backed token on Stacks. It does not support the Lightning Network.