Layer 1 and Layer 2 refer to the different layers of a blockchain network.
Layer 1, also known as the “base layer,” is the foundation of a blockchain network. It comprises the consensus mechanism and the underlying data structure of the blockchain. This layer is responsible for maintaining the integrity and security of the network, and it is where transactions are recorded and validated. Examples of Layer 1 blockchain are Bitcoin and Ethereum.
Layer 2, on the other hand, is built on top of the base layer and aims to improve the scalability and speed of the network. It is designed to handle a high volume of transactions without compromising the security of the base layer. Layer 2 solutions include off-chain transactions and sidechains, which allow for faster and cheaper transactions.
One popular example of a Layer 2 solution is the Lightning Network for Bitcoin, which enables off-chain transactions, and Plasma for Ethereum which enables sidechain transactions. Another example is the Optimistic Rollup which also a Layer 2 scaling solution for Ethereum.
The layer 2 solutions are still in development, so their adoption and success are uncertain. They are considered as a promising solution to solve the scalability problem of the blockchain network.
