Blockchains do not have a central authority, so all transactions must be secure and data must be kept on distributed ledger technology. DLT would usually operate according to a predefined protocol, giving every node a particular task. Thus, all blockchains have a layered design that enables this particular type of transaction authentication. This article will be covering the connection between all the layers and explaining what is the most recently stated L3. ⬇️
What is Layer 0?
L0 goes beyond a single blockchain, comprising the connections, hardware, protocols, and other elements that make up a full blockchain ecosystem. One way to conceptualise this layer is as a “network of the blockchains.”
Blockchains at Layer 0 include Polkadot, Avalanche, Cardano, and Cosmos, among others.
Layer 0 is also the thing, enabling interchain operability, allowing communication across blockchains. It offers a crucial framework for preventing issues with layer scalability in the future. In order to promote user participation and progress, Layer 0 frequently uses a native token. 🪙
What is Layer 1?
The majority of duties, maintaining the core functions of a blockchain network are carried out by Layer 1. The first layer represents the blockchain itself, allowing for dispute resolution, consensus, programming languages, protocols, and limitations to exist.
Layer 1 examples include Ethereum, Binance Smart Chain, Bitcoin, and Solana.
Scalability issues usually arise because of the enormous number of jobs that this layer is responsible for. Increased computational power needed to solve and add blocks to the chain as more users join a blockchain leads to higher fees and extended processing times and this is when L2 comes handy. 🤝
What is Layer 2?
Adding nodes is necessary to maintain a blockchain’s decentralised nature, however adjusting scalability, decentralisation, or throughput leads us to the well-known blockchain trilemma and is likely to have an impact on the other Layer 1 factors. Consequently, all the processing is moved to third-party Layer 2 solutions, stacked on top of Layer 1. 🎂
Layer 2 is a new network that updates Layer 1 and controls all transactional validations. In the blockchain ecosystem, Layer 2 is positioned on top of Layer 1 and is constantly communicating with it. Layer 1 is, however, still in charge of overseeing the creation and adding new blocks to the blockchain.
Take the Lightning Network as an illustration of a layer 2 blockchain that has been implemented on the Bitcoin blockchain.
What is Layer 3?
The last and most apparent layer of the blockchain ecosystem. Participants will eventually interact with the user interface at layer 3, which seeks to simplify and ease the functionality overall when used with Layers 1 and 2.
L3 is pretty abstract, but here are a couple schemes and variants of explaining it, as found on the net:
- Web.Foundation. L3 solutions, providing man interpretable APIs and languages, that can be used in developing Web3.0 applications.
- The ecosystem of ZK-STARK (Zero-Knowledge Scalable Transparent Argument of Knowledge), that layers additional protocols on top of L2 to enhance performance and accessibility.
- As suggested by Menaskop (A crypto expert and writer). L3 is completely abstract and allows us to combine different level solutions together without really using the ones in between them - L0 + L2 for example.
If we combine all those, Layer 3 offers functionality such as intra- and inter-chain operability, such as decentralised exchanges, liquidity provisioning, and staking applications. Decentralized apps (dApps) are a form of layer 3 interface that gives blockchain technology practical applications. ⚙️
The different Layers of blockchain are crucial for the chain functioning properly and we are likely to see L4 and L5 being implemented in the near future.
Stay tuned 📻