What is Layer 1, Layer 2, and Layer 3?

In addition to scalability improvements, Layer 2 also introduces new features and functionalities. These additions can range from advanced smart contracts to more sophisticated privacy solutions. By incorporating these features, Layer 2 makes the blockchain network more versatile and adaptable to various use cases.

Moving up the stack, Layer 3 is where real-world applications come to life. This layer hosts a wide array of applications that leverage the underlying blockchain network to execute tasks and fulfill user requests. From decentralized finance platforms to gaming ecosystems, Layer 3 showcases the vast potential of blockchain technology.

Layer 1 serves as the cornerstone of any blockchain network. It offers the foundational framework upon which the entire system operates. This layer is responsible for establishing the basic rules and protocols that govern the network.

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Building upon Layer 1, Layer 2 introduces an overlaying network designed to bolster scalability. By alleviating some of the burdens on the base layer, Layer 2 enables the blockchain to handle a higher volume of transactions more efficiently. This enhancement is crucial for the widespread adoption of blockchain technology.