Crypto FAQ: What is a blockchain Layer protocol?
- Alt. Phrasing: What is a Layer 1 protocol?; What is a Layer 2 protocol?; What is a Layer 3 protocol?
Layer 1 Protocol refers to a base blockchain—such as Bitcoin, BNB Chain, and Ethereum—and its underlying foundation. These are able to process and finalize transactions within their own network without the need for another external network.
Layer 2 Protocols, such as Bitcoin's Lightning Network, are built on top of Layer 1 Protocols to improve the original network's functionality, particularly its scalability.
Layer 3 Protocols, also known as application layers, are built on top of Layer 2 Protocols to address interoperabilty between different blockchain networks. Typically, these layers include DApps (compound of Decentralized and Applications)—such as Synthetix and Uniswap—and the protocols that enable them.
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