The blockchain ecosystem is built by different layers, which make up architectures designed to create applications, transfer assets and generate novel use cases.
Each of these blockchain layers serve the common purpose of establishing a decentralized operating framework based on smart contracts, but each with its own particularities and focus. Let's explore the differences between Layer 0, Layer 1, Layer 2 and Layer 3 blockchains.
From Layer 0 to Layer 3 blockchain
Blockchain technology opened the door to a new way of exchanging value and information in times of digitalization. The birth of Bitcoin and the emergence of Ethereum as a blockchain infrastructure for the creation of decentralized applications (Dapps) along with other blockchain networks, allowed us to learn about main use cases for the technology with Layer 0 and Layer 1.
However, the development of blockchains and these use cases created new operational needs to achieve greater transactional efficiency, which is where Layer 2 networks and more recently, the concept of Layer 3 come into play.
Layer 0
In general, we can understand Layer 0 blockchains as an infrastructure that facilitates the creation and operation of different Layer 1 or even Layer 2 networks, under a communicated and interoperable environment. Layer 0 can be seen as a “base layer”, focused on building operational blockchains, with generally shared mechanisms, features and designs.
Depending on the design and technology, each Layer 0 can make it easier for developers to create custom networks designed for specific needs, using the native token of said Layer 0 network to pay gas fees and connect with other ecosystems. In this way, there is an ecosystem of independent blockchain networks, but within a joint secured framework.
Blockchains such as #Polkadot , #Avalanche and #Cosmos are examples of Layer 0.
Layer 1
So far, the most popular layer of the blockchain. Layer 1 are the main public blockchains in use and adoption at the infrastructure level. These blockchains allow both value transfers and payments, as well as the development of Dapps, thanks to smart contracts. Layer 1 can be seen as the application and operation layer.
Layer 1 blockchains are chains independent of each other, they use their own consensus mechanisms, such as Proof of Work (PoW), Proof of Stake (PoS), among others. Each has its own cryptocurrency, native to each network, with which users can, depending on the design, both pay gas fees and participate in validation or mining to secure the decentralized network.
For its part, at the transactional level, each Layer 1 has its own speed, capacity and cost. This means that the efficiency, scalability and interoperability of the network will be limited and will largely depend on its technological capacity.
#Bitcoin $BTC , in terms of value transfers and payments, and #Ethereum $ETH , as smart contract architecture for the development of Dapps and decentralized projects, They are two main examples of Layer 1 networks.
However, there are other Layer 1 networks, such as Solana, Cardano, BNB Chain $BNB , Tezos, NEAR, Algorand, Avalanche or Cosmos, since the practicality of the latter two also allows them to appear as Layer 1 networks.
Layer 2
With the advancement and growth of Layer 1 networks, a need arose in the ecosystem to establish additional mechanisms or complete environments that would serve to optimize blockchains such as Ethereum, with limited transaction capacity and, especially, high transaction costs, especially in moment of high demand and network congestion.
Layer 2 networks are a scalability solution with great importance for the blockchain ecosystem, especially for Ethereum. They use different technologies to be built laterally or on top of a main blockchain -Layer 1-, allowing for increased scalability and transactional efficiency, while considerably reducing the cost of gas rates.
Generally speaking, Layer 2 solutions are responsible for augmenting mainchain transaction processing. Layer 2 can be seen as a scalability and efficiency layer.
The most popular solutions are based on rollups, both optimistic and zero-knowledge (zk-rollups), sidechains or state channels.
Some examples of Layer 2 networks are:
Lightning Network y Rootstock (RSK) para Bitcoin
Polygon, Decision, Optimism, Base, among others, prepare Ethereum
Hydra for Cardano
Layer 3
The rapid advancement and evolution of blockchain technology, together with the need to optimize the infrastructure that makes up hundreds of DApps with hundreds of thousands of users, have allowed the emergence of a third layer or Layer 3 of networks.
The concept of Layer 3 was initially coined by Starkware, a cryptographic company focused on the development of scalability solutions with zero-knowledge (zk) technology, which defined the third layer as that dedicated to customizing application needs.
In other words, Layer 3 will work on Layer 2 in the same way that Layer 2 does on Layer 1, providing greater functionality and custom scaling tailored to designs as independent layers. Layer 3, which is closely related to ZK technology, would not only add new adapted features, such as privacy, speed or interoperability, but also facilitate transaction processing at “a fraction of the gas.”
However, Layer 3 is still an experimental concept, in development, just taking its first steps. Vitalik Buterin, creator of Ethereum, valued his creation as a sophisticated solution to reinforce the development of Layer 2, although it must mature over time.
Being a new concept, there is currently no widely adopted Layer 3 solution. “Validiums” are positioned as a feasible third layer solution.
Differences between Layer 0, Layer 1, Layer 2 and Layer 3 in blockchain
The main differences between blockchain layers are:
While Layer 0 focuses on building blockchains, Layer 1 serves as infrastructure for applications and platforms. Layer 2 focuses on transaction scalability and cost efficiency, which with Layer 3 would extend to fully customized application hyperscaling.
Transactions at Layer 0 and Layer 1 are limited by the design of the blockchain, so Layer 2 and Layer 3 focus on raising transactional power, in time and quantity, while reducing costs. .
Layer 1 uses base technology, it is a traditional blockchain with a design. Layer 2 is a solution built parallel to Layer 1, while Layer 3 is developed depending on the presence of a Layer 2.
Layer 1 is an established concept that has shown results and adoption at a higher level than Layer 2, which has increased its presence, but has less activity at the moment.
The number of platforms and applications built on Layer 1 networks is considerably greater than that of Layer 2 and, of course, Layer 3 networks.
Layer 1 depends on the underlying technology, Layer 2 makes use of different technologies and solutions to develop, while Layer 3 is closely related to zk-rollups and zero-knowledge technology.
The differences between the blockchain layers allow us to illustrate how the ecosystem remains in constant evolution and development activity, with the intention of designing a decentralized environment completely favorable for Dapps in their mission of integrating hundreds of thousands of users to the blockchain.
Source: Observatorioblockchain.com
