When you’ve been within the blockchain area for a while, you’ve in all probability seen the phrases Layer-1 and Layer-2 used to seek advice from 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 creating an understanding of blockchain scalability, safety, and effectivity.
Searching for the quick reply? In essence:
Layer-1 blockchains are large, main, foundational networks, equivalent to Bitcoin, Ethereum and Solana. They’re the tree trunk, from which all the pieces else branches from. They’re trusted and safe, however usually additionally cumbersome as they’re designed to be a basic instrument, relatively than optimised for a particular activity. This implies transaction pace is low, and prices are excessive.Layer-2 blockchains are facet networks, constructed on high of Layer-1 blockchains, equivalent 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 remains to be robust.Layer-3 blockchains are specialist networks, constructed on high 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.
Wish 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 chargeable for processing and finalizing transactions on the pinnacle of safety and integrity.. Among 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 superb for securely dealing with a small quantity of vital transactions, it struggles to scale successfully.
Ethereum expanded on Bitcoin by introducing sensible 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 via the ground, and transaction costs via the roof.
This spurned the event of a number of the first Ethereum Layer-2 blockchains (equivalent to Polygon and Immutable), and new Layer-1 blockchains that aimed to unravel the identical drawback, equivalent to Circulate.
Many different Layer-1 blockchains have since sprung up, every making an attempt to be a stable spine for additional improvement.
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’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 high of Layer-1 blockchains to develop their scalability or develop their performance. They usually concentrate on a specific area of interest, and purpose to dump a number of the transactional burden from the Layer-1, permitting for sooner and cheaper transactions for high-volume apps.
Polygon is likely 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 increased 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.
Not like Layer-1 blockchains, as they’re branched from their father or mother 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 once stunningly uncommon, however have gotten more and more widespread as apps chase peak optimization.
Layer-3 blockchains are constructed on high of Layer-2 blockchains, and are sometimes constructed to assist one explicit app or recreation. This permits that app or recreation to profit from even sooner transactions and even decrease prices.
That is usually carried out 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 just lately: 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 simply perceive the variations between a Layer-1, Layer-2 and Layer-3 blockchain, will probably 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!
