Layer 1 (L1) cryptocurrencies are the foundational networks that process transactions and secure themselves independently, like Ethereum ($ETH ). Layer 2 (L2) cryptocurrencies are solutions built on top of Layer 1 to increase speed and reduce fees, like Arbitrum ($ARB ). The fundamental difference lies in that L1 is the core layer, while L2 is a tool for developing and scaling this core layer. You can follow me.