In the event you’ve been within the blockchain house for a while, you’ve in all probability seen the phrases Layer-1 and Layer-2 used to check 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 quick reply? In essence:
- Layer-1 blockchains are massive, main, foundational networks, akin to Bitcoin, Ethereum and Solana. They’re the tree trunk, from which all the things else branches from. They’re trusted and safe, however typically additionally cumbersome as they’re designed to be a basic software, fairly than optimised for a particular activity. This implies transaction pace is low, and prices are excessive.
- Layer-2 blockchains are aspect networks, constructed on prime of Layer-1 blockchains, akin to Polygon, Immutable, and Base. They’re the branches, sprouting from the tree trunk. They’re typically 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 sturdy.
- 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 specific 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 study 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 answerable for processing and finalizing transactions on the pinnacle of safety and integrity.. A number of the most well-known Layer-1 blockchains embody 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 excellent for securely dealing with a small quantity of vital transactions, it struggles to scale successfully.
Ethereum expanded on Bitcoin by introducing good contracts, enabling the event of decentralized functions (dApps). Nonetheless, the rise of the primary high-volume blockchain-based recreation, CryptoKitties, congested Ethereum to such an extent that almost all of Ethereum’s site visitors was devoted solely to supporting the CryptoKitties recreation, sending transaction pace by the ground, and transaction costs by the roof.
This spurned the event of a number of the first Ethereum Layer-2 blockchains (akin to Polygon and Immutable), and new Layer-1 blockchains that aimed to resolve the identical downside, akin to Stream.
Many different Layer-1 blockchains have since sprung up, every trying to be a strong spine for additional growth.
Layer-1’s course of transactions by verifying their authenticity by 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’t talk with different Layer-1 networks, although there may be 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 typically concentrate on a specific area of interest, and goal to dump a number of the transactional burden from the Layer-1, permitting for quicker 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 an alternative 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 greater and costs a lot decrease.
Immutable – a gaming-focused Layer-2 – furthered Layer-2 know-how by introducing zero-knowledge (ZK) rollups, which – in brief – permit large numbers of transactions to be verified and processed with none drawbacks on safety, offering a brand new degree of scalability to blockchains.
Not like Layer-1 blockchains, as they’re branched from their mum or dad chain, many Layer-2 networks can talk with each other, permitting all kinds of apps to share knowledge and work with each other.
What’s a Layer-3 blockchain?
Layer-3 blockchains was once stunningly uncommon, however have gotten more and more frequent as apps chase peak optimization.
Layer-3 blockchains are constructed on prime of Layer-2 blockchains, and are sometimes constructed to help one specific app or recreation. This enables that app or recreation to profit from even quicker transactions and even decrease prices.
That is usually completed both in anticipation of an app’s large recognition, 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 well-liked web3 MMORPG LumiTerra.
Now that you just perceive the variations between a Layer-1, Layer-2 and Layer-3 blockchain, it will likely be simpler to each perceive and navigate the more and more advanced world of blockchain know-how. Keep in mind: Layer-1s are the trunks, Layer-2s are the branches, and Layer-3s are the leaves!
