Layer 0, Layer 1, and Layer 2 in crypto/blockchain architecture

by Munim · August 30, 2025

What it is: The underlying infrastructure that makes blockchains possible.
Function: Provides the network, hardware, and protocol base that different blockchains (Layer 1s) can be built on.
Key Features:
- Focuses on interoperability (different blockchains communicating).
- Provides scalability and security frameworks for Layer 1s.
- Often includes SDKs or frameworks for building blockchains.
Examples: Polkadot (with its relay chain + parachains), Cosmos (with Tendermint + IBC), Avalanche Subnets.

What it is: The main blockchain itself — the protocol where transactions are validated, blocks are produced, and consensus is reached.
Function: Acts as the core ledger and consensus engine.
Key Features:
- Defines block structure, consensus (PoW, PoS, etc.), and tokenomics.
- Can host smart contracts and dApps (if designed for it).
- Limited scalability without extra help.
Examples: Bitcoin, Ethereum, Solana, Cardano, BNB Chain.

What it is: Built on top of a Layer 1 blockchain to improve speed, cost, and scalability while still relying on Layer 1 for security.
Function: Takes some of the load off Layer 1 by handling transactions off-chain or in parallel, then settling final states back on the base chain.
Key Features:
- Faster & cheaper transactions.
- Inherits the security of Layer 1.
- Uses techniques like rollups, sidechains, or payment channels.
Examples: Polygon (on Ethereum), Arbitrum, Optimism, Lightning Network (on Bitcoin).

✅ In simple terms:

Layer 0 = the internet cables + framework for building blockchains.
Layer 1 = the blockchain itself (Ethereum, Bitcoin, etc.).
Layer 2 = speed boosters built on top to make transactions cheaper and faster.

Feature	Layer 0	Layer 1	Layer 2
Definition	Foundational infrastructure for creating and connecting blockchains	Base blockchain protocol where transactions are validated and recorded	Scaling solutions built on top of Layer 1
Main Role	Provides interoperability, networking, and framework to build blockchains	Acts as the main ledger & consensus layer	Improves scalability, speed, and lowers transaction costs
Security	Provides framework but relies on Layer 1 chains for execution	Secures transactions through native consensus (PoW, PoS, etc.)	Inherits security from the underlying Layer 1
Scalability	Offers tools to build scalable Layer 1s	Limited by block size, throughput, and consensus	High scalability by offloading transactions
Examples	Polkadot, Cosmos, Avalanche Subnets	Bitcoin, Ethereum, Solana, Cardano	Lightning Network, Polygon, Arbitrum, Optimism
Users Interact With	Rarely directly (mostly for developers building chains)	Directly, via wallets, exchanges, dApps	Indirectly, usually via apps/wallets that integrate L2 (cheaper tx)