In the event you’ve been within the blockchain house for a while, you’ve most likely seen the phrases Layer-1 and Layer-2 used to consult with blockchains – however what do these imply? What are the variations?
These phrases describe basic variations to the construction of a blockchain, and greedy them is essential to creating an understanding of blockchain scalability, safety, and effectivity.
In search of the brief reply? In essence:
Layer-1 blockchains are large, main, foundational networks, reminiscent of Bitcoin, Ethereum and Solana. They’re the tree trunk, from which all the pieces else branches from. They’re trusted and safe, however typically additionally cumbersome as they’re designed to be a common 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, reminiscent of 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 remains 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 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 liable for processing and finalizing transactions on the pinnacle of safety and integrity.. Among 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 – which means that while it’s very best 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 purposes (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 site visitors was devoted solely to supporting the CryptoKitties recreation, sending transaction pace by way of the ground, and transaction costs by way of the roof.
This spurned the event of a few of the first Ethereum Layer-2 blockchains (reminiscent of Polygon and Immutable), and new Layer-1 blockchains that aimed to unravel the identical drawback, reminiscent of Circulation.
Many different Layer-1 blockchains have since sprung up, every trying to be a stable spine for additional improvement.
Layer-1’s course of transactions by verifying their authenticity by way of a community of nodes (particular person units of pc {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, which means they can not talk with different Layer-1 networks, although there may be rising curiosity in constructing bridges – instruments which may enable 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 broaden their scalability or broaden their performance. They typically specialize in a selected area of interest, and purpose to dump a few of the transactional burden from the Layer-1, permitting for sooner and cheaper transactions for high-volume apps.
Polygon is among 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 – which 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 charges a lot decrease.
Immutable – a gaming-focused Layer-2 – furthered Layer-2 expertise by introducing zero-knowledge (ZK) rollups, which – in brief – enable big numbers of transactions to be verified and processed with none drawbacks on safety, offering a brand new stage of scalability to blockchains.
Not like 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 knowledge and work with each other.
What’s a Layer-3 blockchain?
Layer-3 blockchains was 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 explicit app or recreation. This permits 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 big 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 lately: Anomaly, a Ethereum Layer-3 AI gaming platform; and Arbitrum Orbit, an Ethereum Layer-3 that was the previous house for fashionable web3 MMORPG LumiTerra.
Now that you simply 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!
