Layer 3 Networks in Blockchain Infrastructure

Introduction

Blockchain infrastructure has advanced to include layer 1 and layer 2 networks. A more moderen growth is the emergence of so-called “layer 3” networks.

So what are layer 3 networks, and the way do they differ from layer 1 and layer 2 networks?

What’s a Layer 3?

To grasp what layer 3 networks are, we first want to take a look at the layer 1 and layer 2 networks that they sit atop.

Layer 1 networks are the bottom layer of blockchain infrastructure, and embody blockchains equivalent to Ethereum or Bitcoin. They supply the underlying framework for a blockchain community, validating transactions and attaining consensus.

Nonetheless, layer 1 networks can face scalability bottlenecks brought on by throughput and transaction prices.

That’s the place layer 2 networks like Arbitrum, Optimism, and Blast are available in. They’re networks that reside on prime of the layer 1 blockchain and deploy quite a lot of scaling options to assist enhance their effectivity. These can embody bundling transactions or processing transactions off-chain.

Layer 3 Networks

Layer 3 networks are one of many newest developments within the blockchain house, constructing atop the established infrastructure of layer 1 and layer 2 blockchains.

Their main operate is to host decentralized functions (dapps) in order that they will carry out at optimum ranges with out affected by the community congestion of the layers beneath it.

Layer 3s additionally deal with scalability and effectivity, just like the layer 2s they’re constructed on prime of—however layer 3s accomplish that to be able to promote interoperability, and to enhance the efficiency of advanced dapps.

Layer 2s vs Layer 3s

Layer 2s (also referred to as rollups) have been first launched as a blockchain layer on prime of the layer 1 Ethereum community. They have been meant to deal with the scalability points discovered on Ethereum, and for probably the most half, they’ve completed a fairly first rate job at it.

The place layer 2s targeted on bettering the scalability and effectivity of the chain they have been constructed on prime of, layer 3s are meant to deal with points in user-friendliness, effectivity and performance, and usually deal with dapps as their main use case.

The meant operate of a layer 3 community is to enhance the scalability and effectivity of decentralized functions (dapps) constructed on prime of it. They usually solely home one dapp, enabling it to carry out at excessive speeds, with out the congestion discovered on layer 1 and layer 2 networks.

For builders, layer 3s are an surroundings during which they will create way more superior dapps, utilizing advanced good contracts that may not be possible on layer 1 or 2 networks on account of scalability and price restrictions. They can be custom-made for particular software use circumstances in ways in which layer 2s can’t—as a result of they don’t have the identical constraints.

Layer 3s aren’t unique to Ethereum; different layer 1 networks equivalent to Cosmos and its IBC protocol additionally present options for creating layer 3s.

Examples of Layer 3 Networks

For those who’ve spent any time on crypto social community Farcaster, you’re most likely conversant in DEGEN and Degen Chain. Initially a channel on Farcaster, the Degen group launched a token on layer 2 community Base known as DEGEN, primarily used to tip folks on Farcaster. The token shortly grew, and shortly after, the pseudo-anonymous group launched its personal L3, Degen Chain.

Degen Chain was constructed utilizing Arbitrum’s Orbit layer 3 structure, however was launched on prime of the Coinbase-incubated Ethereum layer 2 community Base. Its goal is to function an extremely low value surroundings for degens and builders alike to create enjoyable and user-focused functions, based on hypothesis.

One other common layer 3 is Xai—an Arbitrum layer 3 designed for gaming functions, providing lowered charges and a degree of account abstraction not out there on Layer 2s.

Account abstraction is necessary relating to consumer-facing dapps like video video games, to be able to easy the onboarding course of for mainstream customers and take away the difficult sequence of steps that blockchain-based merchandise typically entail.

Xai retains the core performance of Arbitrum’s Layer 2, however makes use of optimistic rollups to deal with transactions—making it cheaper and quicker than the layer it’s constructed atop.

The Way forward for Layer 3 Networks

As layer 2s proceed to develop and broaden in depend, the demand for extra subtle and scalable options is about to develop alongside them. Layer 3s create a extra versatile infrastructure for dapps, permitting for options like privateness, consumer friendliness (through account abstraction), and interoperability throughout layers.

Relating to gaming, account abstraction is essential. Complicated dapps like video video games want a extra versatile surroundings to succeed—one which retains core parts of Web3’s decentralized ethos (equivalent to gamers proudly owning their very own in-game objects), but additionally supplies the extra performance that’s wanted for dapps to go from “area of interest crypto merchandise” to “mainstream.”

Equally, with reference to privateness, advanced cryptographic strategies wanted to create on-chain privateness grow to be way more possible and price efficient to implement.

Providing real enhancements for dapps and the builders making an attempt to construct on layer 1 and layer 2 networks, layer 3s are more likely to proliferate over the approaching years alongside layer 2s, as builders begin constructing extra advanced merchandise that transcend the present limitations of layer 1 blockchain rails.

Conclusion

Layer 3 networks have emerged as a significant element of the blockchain infrastructure, offering a extra versatile and scalable surroundings for decentralized functions. With their deal with interoperability, user-friendliness, and account abstraction, layer 3s are poised to revolutionize the best way we construct and work together with dapps.

FAQs

What’s a layer 3 community?
A layer 3 community is a kind of blockchain infrastructure that builds atop established layer 1 and layer 2 networks, offering a extra versatile and scalable surroundings for decentralized functions.

How do layer 3s differ from layer 1 and layer 2 networks?
Layer 3s differ from layer 1 and layer 2 networks in that they deal with offering a extra versatile infrastructure for dapps, permitting for options like privateness, consumer friendliness, and interoperability throughout layers.

What are some examples of layer 3 networks?
Examples of layer 3 networks embody Degen Chain, constructed utilizing Arbitrum’s Orbit layer 3 structure, and Xai, an Arbitrum layer 3 designed for gaming functions.

What’s the way forward for layer 3 networks?
Layer 3s are more likely to proliferate over the approaching years, as builders begin constructing extra advanced merchandise that transcend the present limitations of layer 1 blockchain rails.