How Layer-1 Blockchains are Scaling While Layer-2s Rise

It can feel like layer-2 chains are the most important paradigm in blockchain development, since big names like the Ethereum Foundation have been pouring resources into the concept.

While there is active development taking place in layer-2-assisted ecosystems, layer-1 projects are reconsidering their design and becoming more scalable by the day.

Layer-1 blockchains

Layer-1 is regarded as the foundation of a decentralized system that acts as the core network. Every transaction on a layer1 chain is processed locally, and there is no need for additional micro-management.

The best examples of layer-1 blockchains are Ethereum, Solana, BNB, Bitcoin, and similar. Being layer-1 blockchains on top of which a series of concepts can be implemented by dApp and protocol developers, these blockchains happen to be some of the biggest and most influential in the world of crypto.

Even since the early days of Bitcoin, there has been criticism towards the scalability problems that come with layer-1 blockchains that arise from transaction queues and limited speed within the network.

However, the rise of projects like Solana and Polygon have increased both transaction speed and volume capacity, as well as improved other parameters like gas fee cost. The way the aforementioned, newer layer-1s have handled scalability problems is making changes to the base protocol — whether it’s increasing block sizes or restructuring consensus mechanisms.

This article will act as a reference to why layer-2s might not be as necessary as the cryptocurrency media makes us believe.

There have already been numerous forks of large networks like Bitcoin with the aim to reduce scalability issues that resulted in the creation of BitcoinSV and Bitcoin Cash. They still haven’t become popular solutions as networks.

Layer-2 blockchains

A layer-2 chain is simply a secondary blockchain architecture connected to a layer-1 that handles transactions that would otherwise be processed inefficiently.

The idea of a secondary blockchain layer might sound highly appealing, but since it is only connected to a layer-1, it is as good as having transaction computations made off-chain.

There is little locality in layer-2-assisted systems, which makes this artificial expansion of a blockchain less secure and uncertain. Layer-2s can bring the issue of layer-1 data unavailability, which can create bigger access problems like the butterfly effect.

Layer-2 chains may, in many cases, improve speed, cost, and scalability on the surface level, but the fundamental issues of blockchains remain unsolved. Ethereum 2.0 is likely the most popular layer-2 solution available today, but it also has its fair share of criticism because of the exact reasons mentioned earlier.

Simply put, secondary chain layers create more steps in transaction processing, which can make systems riskier for different users involved.

Layer-1 vs Layer-2

The above descriptions have already highlighted the problems with both types of blockchains, but the topic is worth a more in-depth look. Layer 2s have been idealized because users have had a very hard time dealing with high gas and low speed.

As it turned out, skilled technologists and researchers have already been working on more efficient first-layer solutions that could make the concept of layer-2s redundant. The redundancy of layer-2s is still non-existent in most ecosystems, but if core developers continue to progress at today’s rate, this might change.

The following is a short outline of problems and benefits of both L1 and L2 networks.

Problems with layer-1s:

- The fundamental scaling issue. Locally speaking, every transaction must have individual verification that must go through a series of nodes. Every one of the transactions must be logged and recorded, so if issues arise — either from malicious actors or the protocol itself — risks increase.

- High gas. This isn’t the case with most of the new layer-1s like Solana or BNB, but the room for improvement in general is very spacious.

- Low speed. Like with gas fees, newer L1s have already improved transaction finalization times, but the biggest chains like Bitcoin and Ethereum are still problematic.

Benefits of layer-1s:

- Transaction locality

- Users stay on the base network

- Data retrieval is less risky

Problems with layer-2s:

- Lack of interconnectivity. L1s and L2s are connected only on the surface level, and technically the network is fundamentally changed.

- Data collisions and other errors. Just like in general computing where the OSI model powers most communication systems, secondary layers can cause validity errors.

- Potential data unavailability. The more steps have to be completed per transaction, the more risk for data loss is involved.

Benefits of layer-2s:

- Increase in transaction speed

- Less queues — less gas to be paid

- Wider selection of transaction parameters, depending on a network

Concluding the potential solutions to scalability issues

Layer-2s have helped introduce concepts like side chains, state channels, nested chains, and rollups, all of which are assisting numerous networks in handling high transaction volumes.

However, more fundamentalist creators like we at BlockX have found it more valuable to build faster, cheaper, more compatible and interoperable networks from ground up, because the idea of secondary networks has already let many projects down.

Data access and transaction completion could be direct in every ecosystem, and, if more customization or use of other chains is needed, the cross-chain compatibility of the BlockX network is available.

In many ecosystems, layer-2s are used exclusively for additional parts like DAOs, NFT marketplaces, or Metaverse worlds, but the BlockX network will be able to welcome developers of these products on the base network — a layer-1 chain.

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