The cryptocurrency universe is constantly evolving, and innovations in blockchain are proof of this.
Recently, the concept of Layer 3 blockchains - or in free translation, Layer 3 - has gained prominence as a solution to improve the scalability, security and functionalities of existing networks.
But what exactly are Layer 3 blockchains and what are the most promising projects in this area? Let's explore these topics and highlight the top five Layer 3 projects you should keep an eye on.
What are Layer 3 Blockchains?
Layer 3 blockchains are an extension of the Layer 1 and Layer 2 concepts.
While Layer 1 blockchains, such as Bitcoin and Ethereum, form the foundation of the network and handle security and decentralization, Layer 2 solutions, such as Lightning Network and Polygon, build on these foundations to improve scalability and reduce transaction fees.
Layer 3 blockchains go further, focusing on increasing the interoperability, usability and customization of decentralized applications (dApps).
Layer 3 is, essentially, where blockchain infrastructure meets practical applications at a more sophisticated level, offering support for a wide range of services, such as advanced smart contracts, interoperability between different blockchains, and business-specific functionalities.
Top 5 Layer 3 Projects to Keep an Eye On
Now let's analyze together 5 projects that stand out when it comes to Layer 3. Cryptocurrency prices are from the beginning of July 2024!
Polkadot
Polkadot (DOT) is one of the most innovative projects in the Layer 3 space, focused on interoperability between different blockchains, allowing them to communicate and share information securely and efficiently, creating an ecosystem of interconnected networks.
DOT uses a “parachain” structure to connect multiple blockchains into a single network.
![](https://public.bnbstatic.com/image/pgc/202407/995797be4ef60e8e354607114d1a4701.png)
Cosmos
Cosmos (ATOM) is presented as an “Internet of Blockchains”, allowing various independent blockchains to exchange data and transact with each other.
The Inter-Blockchain Communication (IBC) protocol is the basis of its Layer 3 architecture, promoting a highly scalable and interconnected network.
![](https://public.bnbstatic.com/image/pgc/202407/7045936dda4326ba4f20f3745e5a3970.png)
Avalanche
Avalanche (AVAX) is a smart contract platform that offers robust interoperability and high scalability.
Its Layer 3 architecture allows the creation of custom blockchains, which can be optimized for different use cases. Avalanche is known for its fast transactions and low fees, being a popular platform for dApps.
![](https://public.bnbstatic.com/image/pgc/202407/446402450834f11bcc1938abddb88cf6.png)
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Quant (QNT) is focused on solving the problem of interoperability in a unique way, with its own technology: Overledger.
This Layer 3 solution allows different blockchains to connect and interact without the need for significant changes to their underlying infrastructures. Quant is ideal for applications or businesses that need seamless blockchain integration.
![](https://public.bnbstatic.com/image/pgc/202407/980390f9be5287a7988ff5528d81ca0b.png)
Chain link
Chainlink (LINK) is a Layer 3 protocol that connects smart contracts with real-world data.
It uses a decentralized network of oracles to provide secure and verifiable external data, enabling a wide range of decentralized applications in various sectors, from finance to IoT.
![](https://public.bnbstatic.com/image/pgc/202407/43fbab18d4db514144a10a1d80bc9617.png)
Blockchain Layers and Opportunities in Sight
Layer 3 blockchains are shaping the future of the blockchain ecosystem, offering solutions to the scalability, interoperability, and usability challenges faced by previous layers.
Projects like Polkadot, Cosmos, Avalanche, Quant, and Chainlink are at the forefront of this innovation, each bringing unique advances to the space. As the world of cryptocurrency continues to evolve, following these projects can offer valuable insights and promising investment opportunities.
Following the evolution of Layer 3 technologies and understanding how they integrate and enhance existing infrastructures is crucial for any cryptocurrency enthusiast or investor. Keep an eye on these projects and prepare for a future where blockchains are even more integrated and functional.
Finally, always remember to do your own research (DYOR) and follow market trends to make informed and safe investment decisions.