In the world of blockchain, the two terms Layer 1 and Layer 2 have become familiar concepts, especially when we talk about improving scalability, transaction speed, and efficiency of blockchain systems.
So what are Layer 1 and Layer 2 blockchains? And why is the difference between them important in building modern blockchain platforms?
Layer 1 Blockchain - The main infrastructure of the network
Layer 1 (also known as the main blockchain) is the foundational layer where all transactions and activities occur. These are independent blockchains that are responsible for every aspect of the network, from transaction verification to security and data distribution.
Typical example: Ethereum (ETH)
Ethereum is a prominent example of a Layer 1 blockchain. On Ethereum, transactions are processed directly on the main blockchain network, through the Proof of Stake (PoS) consensus mechanism (after transitioning from Proof of Work).
However, a prominent issue with Ethereum, as well as most Layer 1 blockchains, is scalability. As the number of transactions on the Ethereum network increases, the ability to process transactions becomes slower and gas fees (transaction fees) tend to rise.
Layer 2 Blockchain - Extending the capabilities of Layer 1
Layer 2 refers to solutions built on top of Layer 1 to improve scalability and reduce the load on the main blockchain. These solutions do not change the structure of Layer 1 but instead provide new methods for processing transactions off the main blockchain, helping to increase transaction speed and lower costs.
Typical example: Optimism (Layer 2)
Optimism is a Layer 2 scaling solution for Ethereum, using Optimistic Rollups to accelerate transactions and reduce costs. Instead of processing each transaction directly on the Ethereum network, Optimism bundles multiple transactions together and sends them to Ethereum as a single transaction.
This helps to relieve the load on the Ethereum network and makes transactions faster and cheaper. However, if any issues arise with the transactions, the system will automatically verify and ensure correctness.