In case you’ve been within the blockchain area for a while, you’ve most likely seen the phrases Layer-1 and Layer-2 used to discuss with blockchains – however what do these imply? What are the variations?
These phrases describe elementary variations to the construction of a blockchain, and greedy them is essential to growing an understanding of blockchain scalability, safety, and effectivity.
In search of the brief reply? In essence:
- Layer-1 blockchains are massive, main, foundational networks, similar to Bitcoin, Ethereum and Solana. They’re the tree trunk, from which all the things else branches from. They’re trusted and safe, however usually additionally cumbersome as they’re designed to be a common instrument, quite than optimised for a particular process. This implies transaction pace is low, and prices are excessive.
- Layer-2 blockchains are facet networks, constructed on prime of Layer-1 blockchains, similar to Polygon, Immutable, and Base. They’re the branches, sprouting from the tree trunk. They’re usually specialised for a particular area of interest, e.g. blockchain video games, and course of high-volume transactions away from the principle blockchain, permitting apps to run at pace with out clogging the Layer-1 community. This implies transaction speeds are excessive, prices are low – and as safety is garnered from the Layer-1 it’s branching from, safety continues to be robust.
- Layer-3 blockchains are specialist networks, constructed on prime of Layer-2 blockchains. They’re the leaves, sprouting from the branches. These are sometimes reserved for explicit high-volume apps, to forestall transactions from clogging the Layer-2 community. As they’re constructed particularly for one app, this implies transaction speeds are very excessive, and prices are very low.
Need to dive deeper and be taught the way it all works? Learn on…
What’s a Layer-1 blockchain?
Layer-1 blockchains are the spine of a decentralized world. They’re chargeable for processing and finalizing transactions on the pinnacle of safety and integrity.. A number of the most well-known Layer-1 blockchains embrace Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
Bitcoin was the primary Layer-1 blockchain. Designed for peer-to-peer transactions, and utilizing a proof-of-work consensus mechanism, it trades pace and quantity for outright safety – that means that while it’s best for securely dealing with a small quantity of essential transactions, it struggles to scale successfully.
Ethereum expanded on Bitcoin by introducing good contracts, enabling the event of decentralized functions (dApps). Nevertheless, the rise of the primary high-volume blockchain-based recreation, CryptoKitties, congested Ethereum to such an extent that the majority of Ethereum’s visitors was devoted solely to supporting the CryptoKitties recreation, sending transaction pace via the ground, and transaction costs via the roof.
This spurned the event of a few of the first Ethereum Layer-2 blockchains (similar to Polygon and Immutable), and new Layer-1 blockchains that aimed to resolve the identical downside, similar to Stream.
Many different Layer-1 blockchains have since sprung up, every making an attempt to be a strong spine for additional growth.
Layer-1’s course of transactions by verifying their authenticity via a community of nodes (particular person units of laptop {hardware}), and recording them in blocks. As soon as a block of transactions is verified, it’s added to the blockchain, making the transactions irreversible and safe.
Most Layer-1 blockchains are siloed, that means they can not talk with different Layer-1 networks, although there’s rising curiosity in constructing bridges – instruments which might permit Layer-1 blockchains to speak amongst one another, permitting property to be ship between them.
What’s a Layer-2 blockchain?
Layer-2 blockchains are constructed on prime of Layer-1 blockchains to increase their scalability or increase their performance. They usually specialize in a specific area of interest, and goal to dump a few of the transactional burden from the Layer-1, permitting for sooner and cheaper transactions for high-volume apps.
Polygon is without doubt one of the most well-known Layer-2 options for Ethereum. It makes use of an array of sidechains to course of transactions, that are then batched and finalised onto Ethereum – that means that as a substitute of paying for one costly Ethereum transaction, you’re paying for a small fraction of 1 transaction that’s mixed with many others, making speeds a lot larger and charges a lot decrease.
Immutable – a gaming-focused Layer-2 – furthered Layer-2 expertise by introducing zero-knowledge (ZK) rollups, which – in brief – permit enormous numbers of transactions to be verified and processed with none drawbacks on safety, offering a brand new stage of scalability to blockchains.
In contrast to Layer-1 blockchains, as they’re branched from their guardian chain, many Layer-2 networks can talk with each other, permitting all kinds of apps to share information and work with each other.
What’s a Layer-3 blockchain?
Layer-3 blockchains was stunningly uncommon, however have gotten more and more widespread as apps chase peak optimization.
Layer-3 blockchains are constructed on prime of Layer-2 blockchains, and are sometimes constructed to help one explicit app or recreation. This enables that app or recreation to learn from even sooner transactions and even decrease prices.
That is sometimes completed both in anticipation of an app’s enormous reputation, or if a Layer-2 app is pushing such a high-volume of transactions that it’s clogging the Layer-2 and affecting different apps on the community.
We’ve written about two Layer-3 blockchains not too long ago: Anomaly, a Ethereum Layer-3 AI gaming platform; and Arbitrum Orbit, an Ethereum Layer-3 that was the previous house for standard web3 MMORPG LumiTerra.
Now that you just perceive the variations between a Layer-1, Layer-2 and Layer-3 blockchain, it is going to be simpler to each perceive and navigate the more and more complicated world of blockchain expertise. Bear in mind: Layer-1s are the trunks, Layer-2s are the branches, and Layer-3s are the leaves!
