23/04/2024
Layer 1 and Layer 2 blockchains are different approaches to scaling blockchain networks:
1. **Layer 1 (L1) Blockchain:**
- Refers to the main blockchain protocol layer.
- Examples include Bitcoin, Ethereum, and Binance Smart Chain.
- All transactions occur on-chain, meaning they are processed directly on the underlying blockchain.
- Scaling solutions typically involve changes to the protocol itself, such as increasing block size or implementing sharding.
2. **Layer 2 (L2) Blockchain:**
- Builds on top of Layer 1 blockchains and operates off-chain.
- Examples include Lightning Network for Bitcoin and Plasma and Rollups for Ethereum.
- Transactions are processed off-chain or on a separate blockchain, which can handle a higher volume of transactions.
- They rely on the Layer 1 blockchain for security and finality, settling transactions periodically or when needed.
In essence, Layer 1 focuses on improving the base protocol for scalability, while Layer 2 solutions aim to alleviate congestion and increase throughput by moving some transactions off the main chain.
