Layer 1 Vs layer 2 blockchain Full Comparison By Meta Tech

7 min readAug 3, 2023

Scalability Solutions for Layer 1

To boost transactional speed and reliability while accepting additional user activity, layer-1 solutions profoundly change the system’s rules. To boost total network performance, layer-1 scaling methods may involve, for instance, boosting the quantity of data included in each block or speeding up the pace at which blocks are validated.

A Layer-2 technology is a third-party interface that may be utilized with a Layer-1 ledger in a decentralized environment. Durability is increased by adding layer-1 scaling options to the blockchain system’s base coat.

To accomplish Layer-1 network scale, a blockchain may also undergo other fundamental modifications.

Changes to the consensus process

Some agreement processes are more effective than others. The consensus process now used on well-known blockchain systems uses Proof of Work (PoW). PoW is safe, but it can be sluggish.

Because of this, a lot of more recent blockchain systems use the Proof-of-Stake (PoS) consensus protocol. PoS activities related to and verify blocks of transaction records based on users staking security in the networks, as opposed to needing miners to solve encryption primitives employing significant processing power.

With the release of MetaTech, the system will switch to a PoS consensus mechanism, which is anticipated to significantly and substantially enhance its bandwidth while boosting decentralization and maintaining information security.

Sharding

Despite the relatively untested status within the blockchain industry, sharding is a method borrowed from database systems that have grown to be among the most prominent Layer-1 scalability options. A more reasonable effort than needing all sites to manage the whole system is sharding, which comprises splitting the information of the entire blockchain system into several databases known as “shards.” The network processes these networking shards concurrently in simultaneously, enabling serial work on several operations.

Furthermore, rather than keeping a blockchain network as its whole, each networking object is associated with a certain shard. Using cross-shard communication systems, separate shards exchange addresses, amounts, and basic states to communicate proofs with the process from the initial. Along with Zilliqa, Tezos, and Qtum, Ethereum 2.0 is one well-known blockchain system that is researching shards.

Scaling Solutions for Layer 2

A layer-2 system or platform enhances the scalability and effectiveness of a blockchain network by running in front of it. This class of scaling methods comprises offloading a portion of the operational weight of a blockchain system to a neighboring system design, which then manages the bulk of the channel’s operations and only afterward returns back to the primary blockchain to complete its findings. The aggregate base blockchain is becoming less crowded and therefore more scalable by extracting the bulk of information processing to auxiliary design.

For example, the Lightning Network is a Layer-2 solution designed to increase activity on the Bitcoin network. Bitcoin is a Layer-1 channel. Additional illustrations of Layer-2 solutions include:

Nested blockchain

Currently, OmiseGO, an Ethereum-based decentralized application (dApp), is developing Plasma, a nested blockchain solution. Blockchains that are nested on top of or inside of each other are referred to as nested blockchain systems. The basic idea of plasma design is as follows:

The nested blockchain design generally consists of a core blockchain that establishes the rules for a wider network, with implementations taking place on a web of subsidiary chains that are linked to one another. It won’t participate directly in any activities unless some issues need to be settled.
A mainchain can serve as the foundation for several blockchain tiers, each of which uses a family relationship. The parental chain assigns tasks to kid chains, who complete them and pass them back to the parent chain. But if it becomes necessary for resolving disputes, the aggregate base blockchain doesn’t really participate in the network operations of supplementary chains.
This technique not only greatly lessens the load on the main chain, but if implemented properly, it will also tremendously improve flexibility.

The division of labor in this paradigm lessens the processing load on the mainchain, improving scalability tremendously. The Layer-2 stacked blockchain architecture used on top of the Layer-1 Ethereum protocol to enable quicker and less expensive payments is shown by the OMG Plasma development.

State channels

A state channel allows members to perform activities that would ordinarily take place off the blockchain over a two-way communications platform. By doing this, you can reduce the waiting time because you are no longer reliant on a miner or other third party. A state channel operates as follows:

The users can directly engage together without sending anything to the producers, except a segment of the blockchain that is closed off by multi-signature or some other type of shared ledger that is pre-agreed upon by the stakeholders.
The final layer of the network is stored on the blockchain once the complete transaction set is complete.
A state channel increases transaction value speed and reliability by enabling two-way interaction between cryptocurrency and off-chain operational networks.
Nodes in the Layer-1 system are not required to validate a state channel. Rather, a multi-signature or cryptographic protocol technique is used to lock down a system resource.
The ultimate “state” of the “channel” and all of its intrinsic changes are documented to the underlying blockchain when a trade or batch of operations is finished on a state channel.
State channels include things like the Liquid Network, Celer, Bitcoin Lightning, and Ethereum’s Raiden System.
State channels make a trade-off in the Blockchain Trilemma, giving up some decentralization for more capacity.

Sidechains

A sidechain is a commercial chain that is next to a blockchain and is frequently used for big batches of operations.

Sidechains employ a speed- and scalability-optimized alternative consensus process, which is distinct from the main chain.
With a sidechain design, the mainchain’s main responsibilities are to uphold basic safety, validate batch transaction data, and settle conflicts.
There are several key ways that sidechains vary from state channels. First off, transactions made on a sidechain are not secret between users; rather, they are publicly disclosed on the blockchain.
The mainchain and other sidechains are unaffected by sidechain security vulnerabilities. As a sidechain’s architecture is often created from the bottom up, creating one could involve a significant amount of work.

The key difference between Layer 1 Vs Layer 2 Blockchain

Layer 1 blockchain

In essence, layer 1 scaling solutions relate to changes made to the blockchain system’s fundamental layer to achieve desired gains.
You may either tweak the consensus methods for speed and efficiency or expand the block size to accommodate more transactions.
The fundamental scaling strategy for layer 1 blockchain systems is on altering the base protocol itself.
Layer 1 networks operate as the definitive authority and are ultimately in charge of transaction resolution. On layer 1 networks, a native token is available for gaining access to the network’s services.
Creativity is the creation of consensus protocol is a key characteristic of layer 1 blockchain networks.

Advantages of layer 1

A layer 1 blockchain protocol must, at the very least, provide decentralization, security, and durability.
High throughput and financial viability are provided via a layer 1 blockchain system for decentralization and privacy.
The main value claims of blockchain technology are supported by layer one blockchain solutions.
Blockchain layer one solutions relate to the potential for improved ecosystem growth.
Layer 1 blockchains accommodate new tools, technological advancements, and other elements in the basic protocols.
Enhancing the basic protocol itself to increase system flexibility.
In a layer 1 blockchain system, nothing needs to be added on top of the original structure.
Layer 1 is a Fast blockchain network system

Disadvantages of Layer 1

Problems can arise when experimenting with Ethereum and Bitcoin due to preexisting scripts in Layer 1 blockchain.
Even if these methods are incorporated into a brand-new protocol, they may still be unable to resolve the scalability trilemma.
Layer-1 networks frequently have scaling issues. Good examples of Layer 1 networks with scaling problems include MetaTech, Bitcoin and Ethereum.
A Layer 1 blockchain may become sluggish and costly to use as the number of users and parallel operations rise.

Layer 2 blockchain

Off-chain alternatives for layer 2 scalability share the workload of the primary blockchain protocol
Certain computational complexity and level of financial activities are transferred to layer 2 protocols, networks, or apps by a blockchain protocol’s Mainnet.
The intended work is completed by the off-chain protocols or solutions, who then transmit their findings to the primary blockchain layer.
In contrast to the primary blockchain protocol, layer 2 scaling methods perform as off-chain alternatives.
Layer 2 solutions save transaction costs while increasing automation and network speed.
Every layer 2 solution has a different way of connecting transactions to the relevant base layer.

Advantages of layer 2 blockchain

While maintaining the integrity of the Ethereum blockchain, layer 2 solutions enable scalability and higher throughput, enabling total decentralization, transparency, and security.
To execute numerous transactions quickly and without paying extra payments or wasting valuable time with miner validation, layer-2 technologies like state channels and lightning systems are extremely useful.
By shifting the majority of information processing to secondary architecture, blockchain is more flexible and less congested.
Unlike layer 1, layer 2 doesn’t interfere with the blockchain system.
With the use of layer 2 technology, blockchain systems may be developed that are practical, scalable, and competitive with well-established, centralized systems like Visa.
Solutions at the layer 2 level help with issues like data privacy and location. Businesses can keep data in a concise area that is visible to a certain entity by using L2 servers.
L2 function as an additional layer, and the core blockchain’s structure (code) don’t need to alter.
Layer 2 Blockchain lowers carbon footprints.

Disadvantages of Layer 2 blockchain system

Problems can arise when experimenting with Ethereum and Bitcoin due to preexisting scripts in Layer 2 blockchain.
Even if these methods are incorporated into a brand-new protocol, they may still be unable to resolve the scalability trilemma.
The fluidity of the base chain may be hampered by L2. For example, Ethereum requires a thriving market to adequately sustain all of its products and coins. The blockchain’s stability is likely to reduce whenever a new layer is introduced.
Users of the site suffer unnecessary onboarding issues. The user may have trouble keeping track of all the cash if they are transmitted via L2 protocols.