What is a Layer 1 Blockchain?
A Layer 1 (L1) blockchain serves as the foundational layer in the blockchain ecosystem. It’s the primary blockchain infrastructure on which other secondary networks and applications, known as Layer 2 (L2), can be built. Bitcoin and Ethereum are the two largest and most well-known L1 blockchains, providing the necessary security and infrastructure to support L2 solutions.
Example of Layer 1 and Layer 2 Interactions
An example of an L1 and L2 working together is Ethereum and Optimism:
- Ethereum is the L1 blockchain, responsible for security through its proof-of-stake (PoS) consensus.
- Optimism is an L2 that relies on Ethereum for security and data availability, posting all transactions to Ethereum’s blockchain. This setup helps secure Optimism while providing faster transactions and lower fees than Ethereum alone.
Key Characteristics of Layer 1 Blockchains
Layer 1 blockchains generally:
- Store transaction history in a decentralized ledger.
- Use a consensus mechanism to validate and secure the network.
- Feature a native cryptocurrency for paying transaction fees.
- Provide infrastructure for secondary networks (L2s) and decentralized applications (dApps).
- Serve as the primary source for transaction verification and settlement.
- Often experience slower speeds and higher costs compared to L2 solutions.
Consensus Mechanisms: A Core Element of Layer 1
Consensus mechanisms allow nodes to reach an agreement on the blockchain’s state, preventing malicious activity. They incentivize honest actors and protect against issues like double-spending and Sybil attacks. The two most common consensus mechanisms are:
- Proof-of-Work (PoW): Used by Bitcoin, requiring miners to expend computational power to validate transactions.
- Proof-of-Stake (PoS): Used by Ethereum, where participants lock up a certain amount of crypto as collateral to secure the network.
Other variations include delegated PoS, proof-of-authority, proof-of-history, hybrid PoW/PoS, proof-of-burn, and delayed PoW.
Read on: Proof-of-stake vs Proof-of-work
Major Layer 1 Blockchains
- Bitcoin: The first and most valuable public blockchain, operating on PoW. Its native currency, BTC, is used for transaction fees. To address slow speeds, Bitcoin has L2 solutions like the Lightning Network.
- Ethereum: The second-most valuable blockchain, known for pioneering smart contracts and supporting dApps, NFTs, and tokens. Ethereum’s PoS mechanism supports a scalability roadmap, though it still faces congestion and high fees, partially addressed by L2 rollups.
Alternative Layer 1 Blockchains
The growth of blockchain has led to the development of alternative L1s, such as:
Solana and Cardano, offer smart contract capabilities with a focus on scalability.
- Solana: Provides fast and low-cost transactions, though it trades some decentralization for performance.
- Cardano: Utilizes the unique Ouroboros consensus and UTXO model, which is distinct from Ethereum’s account-based ledger.
Other notable L1s include Avalanche, BNB Chain, Aptos, Algorand, and Tezos.
Layer 1 Vs. Layer 2 Blockchains
|
Property |
Layer 1 (L1) |
Layer 2 (L2) |
|
Native Token |
Required for transaction fees |
Often used for governance |
|
Gas Fee Payment |
Paid in L1 native tokens |
Some use ETH; others have unique tokens |
|
Gas Fee Cost |
Typically higher |
Generally lower |
|
Scalability |
Limited due to security focus |
Enhanced scalability |
|
Security |
Higher security and decentralization |
More centralized, can affect security |
|
Consensus |
Integral to L1 security |
Relies on L1 consensus |
Layer 1 Blockchains List
Here is a list of Layer 1 blockchains:
- Ethereum
- Solana
- Astar
- Cronos
- Kadena
- Injective
- Near Protocol
- Avalanche
- Cosmos
- BNB Chain
- Polkadot
- Shardeum
- Flare Network
- 5ire
- XDC Network
- XPLA
- Decimal
- OmniaVerse Ecosystem
- Areon Network
- Innovator Chain
- Alephium
- Circular Protocol
- HeLa
- AIOZ W3S
- START
- WOW EARN CHAIN
- OORT
- Signal21
- Saakuru
- Klever
- Quai Network
- PLAYA3ULL GAMES
- LayerOneX
- Sunrise
Bottom Line
L1 blockchains play a foundational role in the crypto ecosystem, supporting innovations like DeFi, blockchain gaming, NFTs, and more. As L1 technology evolves, it paves the way for broader and more scalable blockchain applications.