The lightning network is apayment protocol built on top of the Bitcoin blockchainthat:

The Lightning Network is a second-layer payment protocol that enables off-chain transactions, allowing users to conduct fast, low-fee Bitcoin payments without recording every transaction directly on the Bitcoin blockchain. This improves scalability and reduces congestion.

It does not inherently facilitate large payments to decentralized exchanges (A), bridging assets across blockchains (B), or guarantee zero transaction fees (C), though fees are significantly lower than on-chain transactions.

The DFSA and FATF crypto guidance discuss such layer-2 solutions in the context of emerging technological risks and monitoring challenges.