OK, is it as simple as changing the most basic unit of account from sats to millisats? How does that "transformation" happen in Lightning. Or is it simply because any rule can be made up in L2 networks?
Any rule that the L2 agrees upon.
Automotive version:
Think of it as having a car that is street legal that you can also drive on the track.
While driving it to the racetrack (L2 network) you have to obey all the local traffic rules (main chain), once you are the track there are a different set of rules. Still the same car (
BTC) however, once you leave the track for the drive home, the local traffic rules apply again.
Probably nor 100% technically accurate but *I* feel it is a good example. Others will disagree.
-Dave