What is a Layer-1?
A Layer-1 refers to the foundational base blockchain protocol in a decentralized network ecosystem. Think of it as the primary infrastructure on which everything else is built. Some of the most widely recognized layer-1 blockchains include Bitcoin, Ethereum, Solana, and Avalanche.
Key Characteristics of Layer-1 Blockchains
- Native Blockchain Protocol: Layer-1s operate as the main chain in their respective networks. Transactions, consensus mechanisms, and foundational security all take place on this layer.
- Consensus Mechanism: They implement core consensus protocols like Proof of Work (PoW), Proof of Stake (PoS), or their derivatives to validate transactions and secure the network.
- Native Assets: Layer-1 blockchains typically have a native asset used for transaction fees and incentivizing participants (e.g., BTC for Bitcoin, ETH for Ethereum).
Role in the Blockchain Stack
- Security and Settlement: Layer-1s are responsible for the security of the overall network. All transactions and smart contract executions ultimately settle on this layer.
- Foundation for Layers Above: Applications, smart contracts, and scaling solutions (like layer-2s such as rollups or sidechains) are built on top of layer-1 blockchains to enhance functionality, scalability, or privacy.
Examples
Summary
Layer-1 is the term used to describe public blockchains' foundational infrastructure, on top of which all other protocols, applications, and scaling solutions are built. Their security, capabilities, and design directly influence the complete ecosystem operating on and around them.