Blockchain The infrastructure has evolved to include layer 1 and layer 2 networks. A more recent development is the emergence of so-called ‘layer 3’ networks.
So what are layer 3 networks, and how do they differ from layer 1 and layer 2 networks?
What is a layer 3?
To understand what Layer 3 networks are, we must first look at the Layer 1 and Layer 2 networks on which they reside.
Layer 1 networks are the base layer of blockchain infrastructure and include blockchains such as Ethereum or Bitcoin. They provide the underlying framework for a blockchain network, validating transactions and reaching consensus.
However, Layer 1 networks can experience scalability bottlenecks caused by throughput and transaction costs.
That’s where layer 2 networks like Arbitrum, Optimism and Blast come into the picture. They are networks that live on top of the layer 1 blockchain and deploy a variety of scaling solutions to help improve their efficiency. This may involve bundling transactions or processing transactions outside the chain.
Layer 3 networks are one of the newest developments in the blockchain space, building on top of the established infrastructure of layer 1 and layer 2 blockchains.
Their primary function is to host decentralized applications (dapps) so that they can perform at an optimal level without suffering from the network congestion of the underlying layers.
Layer 3 also focuses on scalability and efficiency, just like the Layer 2 they are built on, but Layer 3 does this to promote interoperability and improve the performance of complex dapps.
Low 2s vs. low 3s
Layer 2s (also called rollups) were first introduced as a blockchain layer on top of the layer 1 Ethereum network. They were intended to address Ethereum’s scalability issues, and for the most part they did a pretty good job.
While layer 2 focused on improving the scalability and efficiency of the chain they are built on, layer 3 aims to address usability, efficiency, and functionality issues, and typically focuses on dapps as their primary usage scenario.
The intended function of a layer 3 network is to improve the scalability and efficiency of the decentralized applications (dapps) built on top of it. They typically contain only one dapp, allowing it to perform at high speeds, without the congestion found on layer 1 and layer 2 networks.
For developers, layer 3s are an environment where they can create much more advanced dapps using complex ones smart contracts that may not be feasible on layer 1 or 2 networks due to scalability and cost constraints. They can also be customized for specific application use cases in ways that are not possible for Layer 2 because they do not have the same limitations.
Layer 3s are not exclusive to Ethereum; other layer 1 networks such as Cosmos and its IBC protocol also provide solutions for creating layer 3 networks.
Examples of layer 3 networks
If you’ve spent any time on the crypto social network Farcaster, you’re probably familiar with DEGEN and Degen Chain. Originally a channel on Farcaster, the Degen community launched a token on layer 2 network Base called DEGEN, mainly used to tip people on Farcaster. The token grew rapidly and soon after, the pseudo-anonymous team launched its own L3, Degen Chain.
Degen Chain was built using Arbitrum’s Orbit Layer 3 architecture, but launched on top of that Coin base-incubated Ethereum layer 2 network base. The goal is to serve as an ultra-low-cost environment for both degens and developers to create fun and user-oriented applications based primarily on speculation.
Another popular Layer 3 is Xai: an Arbitrum Layer 3 designed for gaming applications that offers lower costs and a level of account abstraction not available on Layer 2s.
Account abstraction is important when it comes to consumer-facing dapps like video games, to ease the onboarding process for regular users and remove the complicated series of steps that blockchain-based products often entail.
Xai retains the core functionality of Arbitrum’s Layer 2, but uses optimistic rollups to handle transactions, making it cheaper and faster than the layer it is built on.
The future of layer 3 networks
As layer 2s continue to grow and increase in number, the demand for more advanced and scalable solutions is expected to grow along with them. Layer 3s create a more flexible infrastructure for dapps, enabling features such as privacy, usability (via account abstraction), and interoperability between layers.
When it comes to gaming, account abstraction is crucial. Complex dapps like video games need a more flexible environment to succeed – one that retains core elements of Web3’s decentralized ethos (such as players owning their own in-game items), but also provides the additional functionality needed to create dapps from a ‘niche’. crypto products” to “mainstream.”
Similarly, with respect to privacy, complex cryptographic techniques required to create on-chain privacy become much more feasible and cost-effective to implement.
Providing real improvements for dapps and the developers trying to build on Layer 1 and Layer 2 networks, Layer 3 networks will likely proliferate alongside Layer 2 networks in the coming years as developers build more complex products that challenge current transcend limitations of layer 1 blockchain rails. .
