As blockchain technology advances, understanding each layer’s unique functionalities is key to unlocking the potential of decentralised networks.
This article details the distinctions between Layer 1, 2, and 3 blockchains, introduces the concept of parachains and sidechains, and highlights aelf's groundbreaking approach with AI integration and a multi-layered sidechain architecture.
What Are the Layers That Make up a Blockchain, and What Functions Do They Serve?
Layer 1, blockchain's base layer: Often called the mainchain. It includes the fundamental protocol on which the entire network operates. Bitcoin and Ethereum are prime examples of Layer 1 blockchains which provide the essential infrastructure for handling of decentralised transactions and smart contracts.
Bitcoin's layer 1 blockchain serves its cryptocurrency and network, including consensus mechanisms, transaction validation, and security. Ethereum goes beyond cryptocurrency transactions to provide a platform for decentralised applications (dApps) and smart contracts. aelf, a fellow layer 1 blockchain that is now powered by AI, offers interoperability with Ethereum and other EVM-compatible blockchains through eBridge, which is part of aelf's Web3 ecosystem.
Layer 2, scaling and enhancement solutions: They are built on top of Layer 1 blockchains to address scalability and performance issues. They enable faster transaction processing and lower fees by offloading some of the computational work from the mainchain. Examples include the Lightning Network for Bitcoin, and Plasma for Ethereum.
Layer 3 blockchains, application-specific chains: They settle on Layer 2 networks, enhancing scalability, interoperability, and flexibility in blockchain applications.
Examples include Arbitrum Orbit’s 'Orbit chains', which can be tailored with custom gas tokens and governance, and Optimism’s OP Stack, which powers a 'Superchain' of interconnected Layer 3 chains like Coinbase’s Base.
Summary: Differences between Layer 1, Layer 2, and Layer 3
{{layer-sidechain-parachain}}
Introducing Sidechains: Enhancing Flexibility and Interoperability
Sidechains are branch-offs of the mainchain, with tokens and digital assets moving between them via a two-way peg. Sidechains have their own consensus mechanism and block parameters, making them more flexible and scalable than the mainchain.
They are considered a Layer 2 solution as they offload some transactional burden from the mainchain. Other than helping with the unclogging, sidechains are good for broadening the abilities of the mainchain to support new applications, which could stem from greater allowance for innovation in blockchain technology.
Examples include Liquid Network for Bitcoin, and Polygon PoS for Ethereum, with Polygon PoS having its own security and validator set rather than relying on Layer 1.
Introducing Parachains: Parallel Processing for Enhanced Interoperability
Another solution outside of the Ethereum Virtual Machine (EVM) ecosystem is Parachains. Parachains are application-specific, independent blockchains that run parallel to the central blockchain network. They connect to the main Relay Chain, leasing its security while maintaining their own governance, tokens, and functionalities.
Parachains are different from sidechains in various regards; instead of being a 'branch-off', imagine them as 'duplicate mainchains' that run simultaneously to process transactions and interact with each other seamlessly.
The exchange of data can be done using cross-chain communication protocols like XCMP. Collator nodes maintain the entire state of a parachain and provide proofs to the Relay Chain validators.
aelf’s Multi-layered Sidechain Architecture
aelf has welcomed its AI era and is accelerating the growth of a decentralised AI infrastructure that facilitates building of AI-powered dApps.
The AI infrastructure entails a unique multi-layered sidechain architecture to overcome the limitations of traditional blockchains; the approach optimises blockchain performance and security, ensuring a more efficient and secure system.
Each sidechain in aelf’s architecture is dedicated to a specific function or application, enhancing scalability and efficiency. The interconnected ecosystem leads to a seamless interaction between different layers and sidechains, creating a robust and flexible blockchain environment.
In Closing
By peeling off the different layers of a blockchain, we've set up a foundation to dive into the concepts of parachains and sidechains, which are crucial in improving efficiencies in decentralised systems.
Each layer plays its role in addressing the challenges of scalability, customisation, and interoperability; coupled with sidechains and parachains, we see greater results in the form of reduced network congestion, a safer space for innovations, and expanded room for specialised creations.
aelf’s innovative approach, integrating AI with a multi-layered sidechain architecture, exemplifies how these technologies can be combined to overcome the limitations of traditional blockchains. By leveraging these different layers and chain types, the blockchain ecosystem is set to become more efficient, flexible, and capable of supporting a broader range of applications in the digital economy.
*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. Aelf makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult with a qualified financial or legal advisor before making any investment decisions.
About aelf
aelf, an AI-enhanced Layer 1 blockchain network, leverages the robust C# programming language for efficiency and scalability across its sophisticated multi-layered architecture. Founded in 2017 with its global hub in Singapore, aelf is a pioneer in the industry, leading Asia in evolving blockchain with state-of-the-art AI integration to ensure an efficient, low-cost, and highly secure platform that is both developer and end-user friendly. Aligned with its progressive vision, aelf is committed to fostering innovation within its ecosystem and advancing Web3 and AI technology adoption.
For more information about aelf, please refer to our Whitepaper V2.0.
Stay connected with our community:
Website | X | Telegram | Discord
