Layer 1 vs Layer 2 are two types of blockchain architectures. Layer 1 refers to the base blockchain network, like Bitcoin or Ethereum, where transactions occur and consensus mechanisms are applied. Layer 2 solutions are built on top of Layer 1 to improve scalability and transaction speed. Layer 2 solutions like the Lightning Network and Optimistic Rollups offload transactions from the main chain, reducing congestion and fees. While Layer 1 focuses on decentralization and security, Layer 2 enhances scalability and user experience.