Layer 2 Solutions | Ethereum | Moralis Academy (2023)

What are Ethereum Layer-2 Scaling Solutions?

We’ve already covered layer-2s at length in other articles. So, if you need an introduction, please read our“What are Layer-2 Solutions?”article. For now, the simplest way to explain layer-2 solutions is that they help Ethereum scale by speeding up transactions and making them less expensive. More importantly, the question is, how can you benefit from these layer-2 scaling breakthroughs?

This article will cover four promising layer-2 solutions: Arbitrum, Optimism, StarkNet, and zkSync. Furthermore, we’ll explore their forthcoming layer-2 tokens. 2021 was the foundational year for layer-2s, and 2022 could be the year they take flight. When they do, these four projects will likely play a key role.

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Layer-2 Solutions – ZK-Rollups and Optimistic Rollups

There are two types of rollups occupying the layer-2 solutions space: zk-rollups and optimistic rollups. While both serve to scale Ethereum, they do so in different ways. However, while both are breakthrough solutions, none other than Vitalik Buterin, Ethereum co-founder, believes that zk-rollups are the more promising solution in the long term.

Two teams making incredible progress with zk-rollups right now are StarkWare and Matter Labs, which we’ll look more into later on. Moreover, Ethereum is the layer-1 blockchain that layer-2 solutions serve. So, to learn more about Ethereum, join Moralis Academy and take the Ethereum Fundamentals course today!

StarkWare – StarkEx and StarkNet

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StarkWare is pushing scalability limits with two layer-2 solutions that show great promise: StarkEx and StarkNet. StarkEx is a scalability solution that StarkWare released in 2020. Besides the zk-rollup mode, StarkEx has another operating mode called “validium.”

Validiums are custom designed for the particular dApps that will employ them. However, in the future, StarkEx will offer a third option for users to decide on the spot whether they want to go with a zk-rollup or the validium experience.

Some of the projects already using StarkEx are dYdX, DeversiFi, and Immutable X.

What is StarkNet?

StarkWare is also developing StarkNet, another layer-2. StarkNet is a decentralized zk-rollup compatible with Ethereum Virtual Machine (EVM). It accomplishes compatibility through a compiler to Cairo, its programming language.

The team designed StarkNet for general-purpose computation. So devs can either create dApps in Cairo or port over Ethereum code via its Solidity-to-Cairo compiler.

StarkNet Alpha launched on the Ethereum mainnet in November 2021, so it’s still fairly new. However, since StarkWare is putting lots of development muscle behind StarkNet, it looks to be one of the promising scaling solutions for the future.

In sum, StarkWare’s layer-2 solutions are powerful technologies still in their early phases. But, by familiarizing yourself with these layer-2s now, you can better prepare for the future.

(Video) Ethereum Layer 2 Solutions | School of Block

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zkSync – Ethereum Layer-2 Scaling Solutions

Another layer-2 solution that brings quicker and inexpensive transactions to the Ethereum blockchain is zkSync. This project promises more good news for Ethereum users who are ravenous for lower fees. Further, zkSync succeeds by moving most activity off of layer-1 while still inheriting its security benefits.

Matter Labs developed zkSync. Like StarkWare, zkSync belongs to the zk-rollups class. Since zkSync uses similar technology, it is also adept at defying congestion and becoming less expensive as more people join the network.

As those using Ethereum can tell you, layer-1 platforms become more expensive with network congestion. So, zkSync is providing a much-needed service.

At the time of writing, it stands in ninth place for layer-2 solutions with over $70 million in total value locked (TVL), according to L2BEAT. That number will likely grow as zkSync’s features advance, attracting more users seeking lower transaction fees.

Arbitrum – Ethereum Layer-2 Scaling Solutions

Offchain Labs created Arbitrum. It is an optimistic rollup that is EVM-compatible. That makes it easier for NFT and DeFi protocols to port their code to it.

This kind of compatibility helps explain why Arbitrum is the most prominent layer-2 solution with just over $3 billion in TVL. Moreover, long wait times for withdrawals are one of the challenges with optimistic rollups. So, for quicker deposits and withdrawals, you can use bridges such as the Hop protocol, Synapse, and xPollinate.

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Optimism – Ethereum Layer-2 Scaling Solutions

As you might have guessed, Optimism is also an optimistic rollup. It currently ranks fourth in terms of layer-2 TVL and offers full Ethereum Virtual Machine (EVM) compatibility. That means DeFi and NFT developers can port their dApps over to layer-2 with one click.

Liquidity bridges to shorten the seven-day waiting period for optimistic rollup withdrawals exist. For example, you can fund Optimism with Argent, the Hop protocol, and Celer Network, to name a few.

Are you ready to learn more about crypto? Read about the blockchain in supply chain and Web3 browsers at Moralis Academy’s blog.

Exploring Layer-2 Tokens

Surprisingly, the prominent layer-2 solutions this article covers (Arbitrum, Optimism, StarkWare, and zkSync) all remain “tokenless.” On the other hand, maybe it’s not surprising when considering the technological feats involved in creating such cryptographic complexity.

Some analysts predict that by 2023, two or more layer-2 tokens will breach the top ten cryptos by market cap after launch. To do that, they’ll need to compete with alternative layer-1 solutions. New layer-2 tokens bundled with incentives like airdrops could help fuel this technology.

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(Video) A DEFINITIVE GUIDE TO ETHEREUM SCALING SOLUTIONS | LAYER 2 SOLUTIONS OVERVIEW

That means that the likelihood of a token launch by at least one of these four is high. That is good news for early adopters, who could potentially receive layer-2 tokens in the airdrops.

Layer-2 Tokens – Why the Wait?

Unfortunately, layer-2 solutions still have technical hurdles to cross before launching any tokens. For one thing, the space needs better layer-1 to layer-2 bridges. So that’s why these projects are likely to postpone token launches until that time.

But when they do, tokens should start rolling out in late 2022 through 2023. Whenever it happens, zkSync will probably lead the pack. It is the top contender for a token launch since it’s already confirmed its commitment to community ownership.

At the opposite end of the spectrum is Optimism. Its team has publicly denied it will launch a token. StarkNet, on the other hand, is taking the middle road. It has neither confirmed nor denied that a token is in its future. Arbitrum also says it has no plans for a layer-2 token.

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However, making public pronouncements one way or the other isn’t as important as a platform’s need to incentivize liquidity. Incentives will come. It’s just a matter of what kind.

The probability of upcoming layer-2 tokens opens the door to more questions such as how will layer-2 tokenomics work? What kinds of incentives will they offer? How will they allocate their tokens? More importantly, if incentives take the form of airdrops, how much will go to the community and loyal users?

Layer-2 Tokens – zkSync Token Allocation

No one has the answers at this point, but zkSync already announced it would distribute 67% of its tokens to the community. If that’s the case, a zkSync token could set the standard for the competition.

So, what does that mean for those looking to front-run any zkSync token launches? To get included on any airdrops means you will have to use the associated protocols in some form or fashion. For example, you could transact on layer-2 dApps, use a bridge, or build new dApps on a layer-2 solution.

If you’re not a developer, then focusing on the first two – transacting and using bridges – will be the more accessible approach. For starters, you could migrate some of your DeFi and NFT action over to layer-2. Below, let’s examine some specific ways to get a shot at a zkSync token drop or other layer-2 tokens.

Do you want to learn about DeFi? Make sure to take the Master DeFi in 2022 course at Moralis Academy.

Layer-2 Tokens – Some Action Steps

Now is an excellent time to prepare for any possible upcoming rollouts. So, let’s look at some of the ways to do that.

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Layer-2 Solutions – Arbitrum

Once you’ve selected a bridge to fund your Arbitrum account, the next step is to explore some of the dApps available:

(Video) Elena Sinelnikova, CEO of Metis – Layer 2 Scaling Solution | Blockchain Interviews

1. Uniswap
Provide liquidity on Uniswap.

2. Curve
Likewise, you can also provide liquidity in Curve’s tricrypto pool.

3. Balancer
Provide liquidity on Balancer.

4. Badger
Add funds to Badger’s DeFi vaults.

5. Pickle Finance
Yield farm your liquidity provider tokens on Pickle Finance.

Layer-2 Solutions – Optimism

After funding your account, some dApps to explore with Optimism are:

1. Uniswap
Trade or provide liquidity on Uniswap.

2. Lyra
Trade options on Lyra.

3. ZipSwap
Yield farm on ZipSwap.

4. Thales
Trade options on Thales.

Layer-2 Solutions – StarkEx and StarkNet

For now, you can try dYdX, Immutable X, or DeversiFi.

Furthermore, dYdX is a decentralized derivatives platform that relies on StarkEx. Because of this relationship, dYdX users experience quick, inexpensive, and trustless transactions. Immutable X is the self-proclaimed “first layer-2 for NFTs on Ethereum,” while DeversiFi is a decentralized exchange (DEX).

Notably, StarkNet hasn’t finished its audits yet. Nevertheless, if you’re the pioneering type, there are some riskier trial runs for you to explore. Remember to always proceed with caution when testing out new platforms and protocols. You don’t want to risk large sums of cash. But when you’re ready, you can use:

1. Mint Square
Mint an NFT on Mint Square.

(Video) Blockchain Scaling Solutions: Beyond Layer 1 & Layer 2 - With University of Texas' Sriram Vishwanath

2. Argent Wallet
Create an Argent X wallet and mint test tokens.

3. Briq
Build Briq NFT sets.

4. IBetYou
Try some test bets on IBetYou.

Layer-2 Solutions – zkSync

When the zkSync token launches, it will serve as another liquidity magnet. Matter Labs stated, however, they’re not in any rush to release a zkSync token.But, if the zkSync token piques your interest, you can start using the platform now.

How to Get the zkSync Token

The Ethereum economy is moving towards zk-rollups. While still in their earliest phase, zkSync already demonstrates what zk-rollups can do. Some dApps such as zkNFT and ZigZag are also extremely new and in the experimental stage. Further, ZigZag is still not audited, so proceed with caution.

Here are five options to check out:

1. Argent Wallet
One of the innovative features of Argent is that it lets you choose “guardians” who can help you recover your wallet should you ever lose access to your wallet’s signing key. This feature will help onboard “noobies” to crypto who might otherwise be afraid of losing access to their crypto wallet.

Layer 2 Solutions | Ethereum | Moralis Academy (8)

Argent chose zkSync for its layer-2 wallet launch. So, you can create your zkSync wallet by simply going to Argent. First, fund your account, then you can try some of the built-in app integrations.

2. Gitcoin Donation
You can also make a Gitcoin donation, and after selecting your project of choice, choose the “checkout with zkSync” option and follow the instructions.

3. ZigZag Exchange
ZigZag is a decentralized exchange that has built its reputation by being the first DEX to go live on zkSync. It serves as the trading center for zkSync at the moment.

5. Mint with zkNFT
To experiment with NFT minting, you can create a wallet on the main zkSync website. Or you can use zkNFT’s minting function.

Have you ever asked the question, “what is Litecoin?” Follow the link to learn more. While you’re at it, learn the difference betweenCardano vs Solanato find out which blockchain is better!

Layer-2 Solutions and Tokens – Final Thoughts

Do you ever wish you had been an early adopter for some of the more successful protocols and platforms out there today? Hindsight is 20-20. However, becoming an early adopter in the present involves foresight and risk.

(Video) 📙 ETHEREUM: Layer 2 y The Merge - Expert Session con @Crypto Sheinix

Such risks include financial ones, but you can mitigate them by limiting your trading amounts. However, there is another risk – time. Using dApps that you’re not necessarily interested in to earn some potential layer-2 tokens in an airdrop can be a complete waste of time. What if the airdrop never comes? Spending months on a layer-2 solution that never drops a token could end up being a huge time suck.

So the challenge becomes picking the winning horse. The zkSync token appears to be a done deal, but other promising layer-2’s will also launch their native tokens. At the end of the day, if you want a shot at earning layer-2 tokens, you’ll need to do your due diligence to predict which ones will offer airdrops to its loyal users. It’s a difficult challenge, but doing anything worthwhile always is.

Predicting which layer-2 solutions will launch a token might be a tough challenge. But predicting which future careers will be prosperous is much easier. Learn how to become a blockchain developer and prosper in this red-hot job market. Join Moralis Academy today!

FAQs

What is layer 2 solution? ›

Layer-2 scaling solutions are the technology that runs on top of a blockchain protocol that improves the speed and efficiency of the underlying blockchain. Here's how it works in detail.

Is Shibarium its own blockchain? ›

The shiba inu ERC-20 token is developing its own Layer 2 blockchain titled Shibarium. This network will be added on top of Ethereum (ETH) in attempt to further improve scalability.

Why do we need layer 2 solutions blockchain? ›

Layer 2 solutions are important because they allow for scalability and increased throughput while still holding the integrity of the Ethereum blockchain, allowing for complete decentralization, transparency, and security while also reducing the carbon footprint (less gas, means less energy used, which equates to less ...

What does Shibarium mean for Shiba Inu? ›

Shibarium is a blockchain/layer-2 solution first proposed by Ryoshi, the creator of Shiba Inu. Once it launches, SHIB will migrate to the L2. Ryoshi initially used the phrase blockchain, Shibarium is more likely to be an L2 that sits on top of an already existing (Ethereum) blockchain.

Is Solana a Layer 2? ›

Solana Has A Layer 2!

Which Layer 2 Crypto is best? ›

What are the best layer 2 solutions?
  1. Polygon. Polygon, also known as Matic, is an emerging platform that enables developers to create optimized Ethereum instances. ...
  2. Optimism. ...
  3. Arbitrum. ...
  4. XDai chain. ...
  5. Immutable X.
5 Aug 2022

Will Shibarium burn Shiba? ›

Shibarium has a built-in mechanism which allows coin holders to burn tokens, removing them from circulation and boosting the coin's price. It's reported that Shibarium may charge a nominal transaction fee and use that fee to burn SHIB tokens.

How high will Shiba Inu go in 2025? ›

By 2025, our price prediction forecasts that Shiba Inu (SHIB) could be worth $0.000043.

Will Shibarium increase Shiba Inu price? ›

This result is according to Finder.com latest Shiba Inu Price Predictions Report. Around 25% of the panel pulled together by Finder think the Shibarium update will cause a price increase. Another 22% think there will be no impact, and 3% think a negative impact is on the cards.

Is Ethereum a Layer 2? ›

Layer 1 is the base blockchain. Ethereum and Bitcoin are both layer 1 blockchains because they are the underlying foundation that various layer 2 networks build on top of. Examples of layer 2 projects include "rollups" on Ethereum and the Lightning Network on top of Bitcoin.

Is chainlink a Layer 2 solution? ›

For example, sidechains are often not considered layer 2s because they usually deploy their own consensus mechanisms and validators, leading to a different set of security guarantees than that of the base layer chain.

Is Bitcoin a Layer 2? ›

Layer 1 is the main blockchain network in charge of on-chain transactions, while Layer 2 is the connected network in charge of off-chain transactions. The Bitcoin network is Layer 1.

Can Shiba go high again? ›

Shiba Inu Price Prediction 2024

Because of the Metaverse platform, the SHIB price is expected to create a new high in 2024. The average trading price of the Shiba Inu crypto will be $0.00003041 per the technical analysis.

Will Shiba ever rebound? ›

It's at best a maybe for Shiba Inu to rebound this month.

Shiba Inu (SHIB -1.20%) has seen its better days. The once high-flying meme coin has fallen more than 20% over the past month. It's down nearly 40% year to date. And Shiba Inu is more than 76% below its high set in late October 2021.

Can Shiba reach its all time high again? ›

In terms of price value, SHIB has an outstanding potential to reach new ATHs. It is forecasted that Shiba Inu will increase in value. According to many experts and business analysts, SHIB can hit the highest possible price of $0.001 by 2030.

Is polkadot a layer 1 or 2? ›

Polkadot operates at a deeper level than a blockchain like Ethereum—think of it as providing a foundation on which others crypto projects can build. It calls itself a Layer 0 blockchain, whereas Ethereum and similar blockchains like Solana (SOL) and Cardano (ADA) are called Layer 1 blockchains.

Is Cardano a Layer 2? ›

Hydra, Cardano's own Layer 2 solution, is making progress after the SundaeSwap decentralised exchange (DEX) successfully launched a demo on the network.

Is Avax a Layer 2? ›

Avalanche (AVAX) is a layer-1 smart contract platform built by Ava Labs, which is headquartered in Singapore. It is a proprietary proof-of-stake blockchain that is Ethereum-compatible.

Is there a layer 3 crypto? ›

The application layer is frequently referred to as layer 3. It is a layer that hosts decentralized networks applications (DApps) and the protocols that allow them. While certain blockchains, including Ethereum or Solana (SOL), support a robust ecosystem of Layer three applications, Bitcoin is not suited to host them.

What are the top 3 crypto pairs? ›

Most Active Cryptocurrency Pairs
NameExchangeHigh
REQ/BTCBinance0.00000659
LINK/USDBinance6.98
SolanaInvesting.com14.590
APE/USDBinance3.4400
19 more rows

What Layer 2 Cryptos are there? ›

Two major examples of layer 2 solutions are the Bitcoin Lightning Network and the Ethereum Plasma. Despite having their own working mechanisms and particularities, both solutions are striving to provide increased throughput to blockchain systems.

How much SHIB is burned daily? ›

Shiba Inu burn calculations

In one spectacular 24-hour period, over 100 million tokens were burned.

Will burning Shiba Inu increase its value? ›

Shiba Inu owes a huge part of its success to coin burning – 41.03% of its success, to be exact. It was a Shiba Inu coin burn last year that gave SHIB its first all-time high. In 2022, Shiba Inu investors are hoping that coin burning will soon take SHIB to higher highs than ever before.

How much Shiba Inu burned till now? ›

However, it was trading for $0.000009859 at 13.45 hours IST. The total market of Shiba Inu was a little over $5.4 billion, with volume remaining flat as coins worth $505.65 million exchanged hands in the last 24 hours.
...
Most Searched Stocks.
Tata Motors Share Price423.50
04:04 PM | 11 Nov 202210.80 (2.78%)
Load more..
18 more rows
29 Jun 2022

How much will Shiba be in 5 years? ›

As per the Shiba Inu price forecast, Shiba Inu's price may trade at an average of $0.0000404 for the year 2026.

What will Shiba be worth in 2030? ›

Shiba Inu price prediction March 2030: Shiba Inu's price for March 2030 according to our analysis should range between $0.0002 to $0.00023 and the average price of SHIB should be around $0.00021.

Can a Shiba reach a dollar by 2050? ›

The firm expects SHIB to hit a maximum of US$9.61 by the year 2050. Learning from the detailed analysis, SHIB is expected to hit a new ATH by 2025, following the halving of Bitcoin. The analysts expect Shiba Inu to claim a new ATH by 2040. As the canine coin could have lost 50% of its supply to burns.

How high Shiba Inu can go? ›

If the impact of the last halving is anything to go by, Shiba (SHIB) could easily rally to over $0.01 in 2024. That's because, at this point, its fundamentals will be much better than when it first pumped in 2020. For starters, a lot more people will be aware of Shiba Inu by 2024.

Can Shiba Inu coin reach $100? ›

You can invest as little as $100 in Shiba Inu. In fact, you can buy about 4.8 million Shiba Inu coins worth a $100 investment. If you decide to hold onto the coins for the long term and SHIB tests a new all-time high of $1 someday, we all know what the sum of that new price and number of coins would make you.

What will Shiba Inu worth in 2023? ›

Shiba Inu price prediction November 2023: Shiba Inu's price for November 2023 according to our analysis should range between $0.000034 to $0.00004 and the average price of SHIB should be around $0.000037.

Is Binance a Layer 2? ›

The world's largest cryptocurrency exchange Binance today announced that it has integrated the layer-2 scaling solution Optimism.

Is VPN a Layer 2 or 3? ›

Layer 2 VPNs virtualize the datalink layer (Layer 2) so as to make geographically remote sites look as if they were operating in the same LAN network. Layer 3 VPNs virtualize the network layer (Layer 3) so as to route your customer networks over a public infrastructure like Internet or Service provider backbone.

Does Coinbase use Layer 2? ›

Coinbase Wallet allows you to transfer tokens to and from Layer 2 (L2) networks and sidechains such as Polygon and Arbitrum.

Is Google using Chainlink? ›

Chainlink has previously worked with Google Cloud to bring data on-chain. Oracle infrastructure provider Chainlink Labs has signed Eric Schmidt, the former Google CEO, as a strategic advisor.

How high can Chainlink realistically go? ›

According to the technical analysis of Chainlink prices expected in 2022, the minimum cost of Chainlink will be $6.54. The maximum level that the LINK price can reach is $7.04. The average trading price is expected around $6.79.

Is there a future for Chainlink? ›

According to some analysts, Chainlink will be worth more than $25 by the end of 2021. Chainlink price predictions for 2021–2025 mostly promise further growth, with some even saying it will break the $100 barrier by 2025.

Is Ethereum a layer 1 or 2? ›

Ethereum (ETH), Bitcoin (BTC), and Solana are examples of layer-1 in the blockchain industry.

What is Layer 4 Crypto? ›

Layer 4 is often called the interphase layer, one of the fastest-growing segments of the crypto world, and is where you place decentralized application entities (dApps). UniSwap, IDEX, CryptoPunks, and MakerDAO are some of the most popular dApps that reside in Layer 4.

Is Fantom a layer 1? ›

Fantom is basically a layer 1 smart contract development platform with high performance, EVM compatibility and better scalability.

Can a Shiba hit 1 dollar? ›

If Shiba Inu were ever to reach $1 per token, this would mean that the cryptocurrency network's entire market value would be a whopping $549 trillion. That's more than the amount of total global wealth, as estimated by consulting firm McKinsey & Co. Clearly, this aspirational price target is all but impossible.

Can a Shiba get 1 cent? ›

However, the coin's massive circulating supply makes it impossible for the token price to ever reach $1 or even one cent! If you want to invest in SHIB, you must do it at your discretion, as the coin has a volatile history.

Can Shiba Inu reach 1 cent in 2025? ›

But the chance of Shiba Inu hitting $1 by 2025 is so microscopically small in my view that I'd call it virtually impossible. For starters, a $1 target on SHIB would produce a laughably high market value of $549 trillion, based on Shiba Inu's roughly 549 trillion outstanding tokens.

Does Shiba Inu have a future? ›

Most analysts believe that Shiba Inu could rebound in 2023 alongside the rest of the cryptocurrency market. If this happens, most analysts expect Shiba Inu to trade at an average price of $0.00004 in 2023. In the long term, analysts expect Shiba Inu to hit a high of $0.01 in 2025 if there is another major rally.

Is it worth buying a Shiba Inu 2022? ›

Besides these use cases, the number of organizations that accept Shiba Inu as payments is growing. Essentially, Shiba Inu is one of the cryptocurrencies that stand to do well in 2022 and the years to come. So, ultimately, Shiba Inu is a cryptocurrency worth investing in 2022.

Will Shiba Inu continue to drop? ›

Will Shiba Inu continue to drop? Shiba Inu's collapse is likely to continue while it is impossible to predict the future, Shiba Inu's weak fundamentals and concentrated ownership make it a high-risk asset. And the token's valuation is likely to continue collapsing in 2022.

Will SHIB hit. 001? ›

Hitting the price of $0.01 per token looks highly unlikely, but not impossible. New metaverse and burning initiatives could boost SHIB's price, but the token is still a high-risk investment.

Can Shiba Inu reach 1 cent in 2030? ›

Shiba Inu will not hit 1 cent in 2023. Even the highest predictions do not see SHIB hitting $0.01 by 2030. 1 cent is seen as a huge milestone for Shiba Inu to reach, a milestone many holders are waiting for.

What does Layer 2 mean in Crypto? ›

What is layer 2? Layer 2 (L2) is a collective term to describe a specific set of Ethereum scaling solutions. A layer 2 is a separate blockchain that extends Ethereum and inherits the security guarantees of Ethereum.

What is a Layer 2 device? ›

A Layer 2 switch is a device that operates according to the Layer 2 data communications protocol. A Layer 2 device decides how to forward data based on the MAC address. Ethernet hubs and network switches work at the data link layer, with a switch delivering greater performance than a hub.

What is a layer-1 solution? ›

Scaling Solutions in Layer-1

One solution is dividing the network nodes into smaller groups. These groups can then split all of the data stored between them. This allows the data to be processed simultaneously and in parallel with the network. This mechanism is called sharding.

What is layer-1 and Layer 2 crypto? ›

The main difference between layer-1 vs layer-2 scalability solutions lies in their role and focus on the blockchain. Layer-1 is here to improve the blockchain architecture, while layer-2 is here to build third-party networks on top of the main blockchain.

Is polkadot a Layer 2 solution? ›

Polkadot operates at a deeper level than a blockchain like Ethereum—think of it as providing a foundation on which others crypto projects can build. It calls itself a Layer 0 blockchain, whereas Ethereum and similar blockchains like Solana (SOL) and Cardano (ADA) are called Layer 1 blockchains.

Is polkadot a Layer 1 or 2? ›

Polkadot is a nominated proof-of-stake (nPoS) blockchain that allows layer 1 applications to interoperate with one another.

What are layer 2 examples? ›

Two major examples of layer 2 solutions are the Bitcoin Lightning Network and the Ethereum Plasma. Despite having their own working mechanisms and particularities, both solutions are striving to provide increased throughput to blockchain systems.

What are examples of layer 2 devices? ›

Devices used on a Layer 2 Ethernet network include network interface cards, hubs, bridges and switches.

What is the most common layer 2 device? ›

The Layer 2 protocol you're likely most familiar with is Ethernet. Devices in an Ethernet network are identified by a MAC (media access control) address, which is generally hardcoded to a particular device and doesn't normally change.

Why is Cardano called Cardano? ›

The platform is named after Italian mathematician Gerolamo Cardano, while the cryptocurrency itself is named after the English mathematician Ada Lovelace. The Ada sub-unit is the Lovelace; one Ada = 1,000,000 Lovelaces.

Is Matic a Layer 2? ›

Polygon, formerly known as MATIC network, is a layer-2 scaling solution created in 2019 to address several limitations in the Ethereum blockchain, such as transaction speed, throughput, and gas fees.

What is the 3 layer rule? ›

Three layers of clothing will keep you dry and warm: a base layer for removing moisture, a mid-layer to keep you warm, and an outer layer to protect you from the elements.

Is Dogecoin a Layer 1? ›

Dogecoin, on the other hand, is more scalable via its layer-one protocol without the need for an extra network. The latter is perceived as better blockchain technology which typically should not rely on a third-party solution. The term layer one is used to define the primary blockchain architecture.

What is Layer 2 Cardano? ›

Layer 2 scalability solutions in Cardano

EVM sidechains on Cardano include dcSpark's Milkomeda and IOG's EVM sidechain project. Hydra is the layer 2 scalability solution for Cardano, which aims to increase transaction speed through low latency and high throughput and minimize transaction cost.

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