No, I am not talking about PoS. One example of "Layer 2" is Lightning Network for Bitcoin. You "lock up" an amount of BTC in a channel that you can then use over the p2p onion-routed liquidity network. Payments are practically instant and fees are low (and can be made 0 if you open a direct channel with the counter-party).

It's orhogonal to consensus so works equally well on PoW/PoS.

There are a couple of competing and complimentary solutions for L2 on Ethereum. I'm quite sure it will converge at some point.