As fintech platforms move toward real-time, blockchain-based services, the limitations of Layer 1 networks like Ethereum are becoming increasingly evident. High transaction fees, network congestion, and low throughput make it difficult to deliver seamless user experiences at scale. These challenges aren’t theoretical—they’re architectural constraints that product leaders and engineering leaders must address early on.
At Maxcode, we help fintech teams design infrastructure that is scalable, compliant, and production-ready. In this article, we explain why Layer 2 blockchains (L2s) are quickly becoming the foundation for next-generation financial services—and what chief technology officers (CTOs) and product leaders need to know when building on them.
Why are Layer 2s essential for fintech?
Public blockchains face the well-known scalability trilemma—a tradeoff between decentralization, security, and scalability. Ethereum, for instance, prioritizes decentralization and security, which results in limited throughput (~15 transactions per second) and rising fees during periods of high demand.
For fintech applications like payments, lending, and trading, these limitations can directly impact user experience and business performance. Layer 2s address this by moving execution off-chain while keeping settlement on Layer 1, preserving trust and security.
The evolution of Layer 2 architecture
Up until recently, a separate sidechain (such with as Polygon PoS) was a fast, cheap and reliable L2-like solution offering an adjacent user experience. In sidechain, the security relies on its own network. In contrast, true L2 solutions are built on top of Ethereum and inherit Ethereum security by posting proofs or data back to it.
For one Maxcode , for instance, because the other options were not sufficiently stable at that time, we used a Polygon PoS sidechain approach to build a specialized platform dedicated to facilitating the seamless trading of carbon inset equivalents in marine biofuel. The scope was to transform the entire biofuel trading process into a digital-only landscape by digitalizing the current paper-based process through token creation. While the PoS method is not yet obsolete, Polygon is now focusing on ZK, for instance.
What are the main types of Layer 2 technologies?
Several L2 approaches exist, each with trade-offs in performance, complexity, and maturity. Here’s a quick comparison:
At Maxcode, we’re seeing the most traction with ZK-Rollups and Optimistic Rollups, especially for fintechs building real-time or high-volume systems that require security guarantees.
How do Layer 2s add value to financial applications?
Layer 2s solve several architectural challenges that have historically held blockchain-based finance back:
- Scalability: L2s process hundreds or thousands of transactions per second—ideal for payments, high-frequency trading, and automated settlements.
- Cost-efficiency: L2s batch and compress transactions, making microtransactions viable by slashing gas fees.
- Security: Many rollups inherit Ethereum’s L1 security, offering compliance and audit readiness by design.
- Developer familiarity: Ethereum Virtual Machine (EVM) compatibility allows teams to reuse smart contracts, SDKs, and infrastructure with minimal friction.
What should you watch out for when Building on Layer 2?
Despite the benefits, building on L2 comes with some unique complexities:
- Bridging & liquidity management
Transferring assets between L1 and L2, or across L2s, typically requires bridges. These introduce additional trust assumptions and security concerns—especially critical in decentralized finance (DeFi) or regulated asset flows.
- Finality & withdrawal delays
Optimistic Rollups often involve a dispute window (e.g. 7 days) before withdrawals are finalized. Some offer fast exits via third-party liquidity providers, but this introduces added complexity. ZK-Rollups support faster settlement but are more infrastructure-heavy.
- Ecosystem & tooling maturity
Not all L2s have robust support for analytics, wallets, or oracles. When choosing a network, ensure that your tooling stack—data providers, APIs, wallet support—aligns with your architecture.
- Regulatory considerations
Some L2s use off-chain data availability to boost efficiency. While technically appealing, this may trigger GDPR, auditability, or reporting concerns in regulated markets like Europe. At Maxcode, we regularly help fintech clients to navigate these compliance trade-offs.
Which financial players are already using Layer 2?
Layer 2 adoption is no longer hypothetical. Some of the biggest players in the industry have already gone live:
- Coinbase launched Base, a rollup network using the OP Stack.
- Visa has trialed stablecoin settlement on Starknet and Polygon zkEVM.
- Circle now supports USDC on Arbitrum and Optimism, expanding cross-chain liquidity.
These moves show that Layer 2 is becoming the enterprise-ready standard for scaling secure, real-time blockchain finance.
Ongoing innovation in the Layer 2 Ecosystem
Ongoing innovation is making L2s even more powerful and accessible:
- EIP-4844 (Proto-Danksharding): Released on Ethereum, this has introduced a new data format (‘blobs’), drastically reducing the cost of posting rollup data.
- Cross-rollup interoperability: Aggregation protocols are emerging that unify liquidity and abstract away fragmentation across L2s, simplifying UX for end users and developers alike.
These and other developments are making it even easier for fintechs to build multi-chain, composable financial platforms with lower operational overheads and better user experiences.
Conclusion: why Layer 2 is a strategic priority for fintech builders
Layer 2 blockchains are no longer experimental—they’re becoming the de facto infrastructure for scalable, cost-efficient, and compliant blockchain services.
For fintech platforms building for real-world usage, Layer 2 is not optional. Whether you’re optimizing costs, enabling real-time payments, or ensuring regulatory compliance, L2s are solving real problems, today.
How can Maxcode help?
At Maxcode, we help fintech teams translate regulation into innovation. From architecture design to secure implementation, we support:
- Payment platforms
- Asset issuance or tokenization
- DeFi integrations
- Regulatory-grade audits and compliance pathways
Building on Layer 2?
Let’s talk! Our engineering and strategy teams are ready to help you scale up, safely.
