Layer 3 networks sit on top of layer 1 and layer 2 blockchains’ infrastructure, improving interoperability and functionality.
Blockchain infrastructure has changed to integrate layer 1 and layer 2 networks. The rise of ‘Layer 3’ networks is a recent development that is understood best by examining the features L1 and L2.
Layer 3 Explained
It is critical to consider the layer 1 and layer 2 networks that are the underlying for layer 3. Layer 1 networks are the blockchain infrastructure’s base layer, including blockchains like Bitcoin and Ethereum.
They offer a blockchain network’s underlying structure, authorizing transactions and attaining consensus. Nevertheless, the networks can encounter scalability congestions linked to transaction and throughput costs.
That is where layer 2 networks such as Optimism and Arbitrum come in. These networks live atop the layer 1 blockchain and deploy various scaling solutions to boost their efficacy. They may entail processing transactions off-chain or accumulating transactions.
Layer 3 networks are one of the most recent developments in blockchain, on top of layer 1 and layer 2 blockchains’ established infrastructure.
They seek to host decentralized applications to ensure their performance at optimal levels without being affected by network congestions linked to the layers below it.
Layer 3s also stress efficacy and scalability, similar to the layer 2s developed on top of. However, they do so to enhance interoperability and the complex dapps’ performance.
Layer 2s Versus Layer 3s
Layer 2s was initially unveiled as a blockchain layer atop the layer 1 Ethereum network. They were meant to address the scalability problems on Ethereum, and for the most part, they have done an excellent job at it.
Layer 2s focused on enhancing the efficacy and scalability of the chain they were developed on top of. Layer3s are meant to handle problems in efficacy, user-friendliness, and functionality and mainly focus on decentralized applications as their principal use case.
A layer 3 network seeks to enhance the efficacy and scalability of decentralized apps developed on top of it. They mainly house a single dapp, boosting its speeds without the congestion linked to layer 1 and 2 networks.
Layer 3 networks are not exclusive to Ethereum. Other layer 1 networks like Cosmos and its IBC protocol also offer solutions for developing layer 3s.
Illustration of Layer 3 Networks
Initially, a channel on Farcaster, the Degen community unveiled a token on Base, a layer 2 network called DEGEN. It is mainly utilized to tip people on Farcaster.
The token grew quickly, and the pseudo-anonymous team immediately unveiled Degen Chain, its layer 3.
Degen Chain was developed utilizing Arbitrum’s Orbit layer 3 architecture. However, it was unveiled atop Base, the Coinbase-incubated Ethereum layer 2 network.
It seeks to be an extremely low-cost environment for developers and degens to develop user-focused and fun applications, mainly based on speculation.
Xai is another famous Layer 3 designed for gaming apps, providing reduced fees and an account abstraction level not available on Layer 2s.
Account abstraction is critical for consumer-facing decentralized applications such as video games. It improves the onboarding process for mainstream users and eradicates the complicated series of stems linked to blockchain-founded products.
Xai retains the main functionality of Arbitrum’s Layer 3. However, it uses optimistic rollups to manage transactions, making it quicker and inexpensive compared to the layers it is developed on.
Layer 3 Networks’ Future
With the continued growth and expansion of layer 2s, the demand for more scalable and improved solutions will rise alongside them. Layer3s develops a more flexible infrastructure for decentralized applications, permitting user-friendliness, privacy, and interoperability features.
Account abstraction is critical in gaming. Complex decentralized applications such as video games require a more flexible environment.
The environment should retain essential aspects of Web3’s decentralized ethos and offer the extra functionality required for dapps to move from ‘niche crypto products’ to ‘mainstream.’
Concerning privacy, intricate cryptographic approaches required to generate on-chain privacy become more cost-effective and viable to execute.
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