Blockchain Layers Explained

Blockchain is a decentralized as well as immutable database which makes it easier for us in tracking assets and transactions over the network.
Riddhi D.
12:40 5th Dec, 2022

On a Blockchain Network, practically anything of value may be recorded and traded, lowering risk and increasing efficiency for all parties. This innovation of the 21st century has become a very essential part of the internet today.

In this Blog, we will be discussing everything from head to toe about the blockchains and how it works in the combination of different layers. These layers as well as the structure of the blockchain help it in becoming one of the most trusted networks for users.

It is also famous because of its principle of not having a single entity owner i.e. it is distributed among various users who are part of the transaction. This distributed owner principle protects the blockchain from getting hacked or failing as there is no particular root or origin for them.

But what basically are these layers? Let’s take a look and dive deep into the structure of Blockchain. These layers are:-

Layer 0 Blockchain

Layer 0 Blockchain Zelta
Credits to Tsecrypto
  • Layer 0 is the basic layer of the blockchain or is considered to be the Blockchain itself. This layer-0 acts as the network architecture for the blockchain and is made up of the hardware, protocols, connections, and other elements that make up a blockchain ecosystem.
  • You could also refer to this layer as a "network of blockchains."
  • Layer zero blockchain is the earliest step of the blockchain that enables numerous networks, like Bitcoin, Ethereum, and many more, to operate.
  • In addition, Layer 0 gives the blockchain the capacity to communicate across chains from the top to lower layers. Blockchain's supporting structure is provided at Layer 0.
  • Layer 0 also helps you with interchain functionalities and communication between different networks.
  • You can see many demonstrations for layer 0, some of which are Avalanche, Cosmos, etc.

Layer 1 Blockchain

Layer 1 Blockchain Zelta
Credits to Sharedum
  • Layer 1 is an advancement to Layer 0 in the form of handling all the bulk functionalities which help in maintaining the functionality of the Blockchain network. This layer is also referred to as the Implementation Layer.
  • It contains a large number of jobs from dispute resolution to protocol management. These large numbers of jobs lead to a lot of problems with the scalability of these jobs.
  • These scalability problems result in higher processing fees and time as if there occurs a problem in layer 0 it will affect the functionality of Layer 1.
  • There are many features like the Proof-Of-Stake as well as the sharding technique which are being used for resolving this scaling problem. But, they are only able to control it up to a point.
  • A few illustrations for the application of layer 1 are Solana, Ethereum, etc.

Layer 2 Blockchain

Layer 2 Blockchain Zelta
Credits to Zebpay
  • There was a need for extra nodes for increasing the processing power of the blockchain network in total but these additional nodes were leading to clogging of the network.
  • Though for keeping the network decentralised these nodes were needed, but layer 1 was already packed with the jobs assigned that it was not possible for it to enlarge and accommodate the changes.
  • Hence, layer 2 was found and aligned on the top of layer 1 which as result made the network feasible by allowing third-party interactions in case of all the transactions.
  • This advanced layer manages all the transactions being held and constantly transfers information with layer 1.
  • For example purposes, you can readily refer to Lighting Network deployed on Blockchain as it is like an application of Layer 2.

Layer 3 Blockchain

Layer 3 blockchain Zelta
Credits to CryptoAdventure
  • This is the last layer of the Blockchain network. This readily visible layer is also known as the application layer.
  • This layer enables user interaction as well as is visible to the human eyes.
  • Apart from giving you a better UI experience, it also focuses on improving the inter-chain as well as the intra-communication between the layers.
  • It tends to provide hosting for the DAapps as well as the other supporting apps.
  • For better understanding, we can take a look into the example of decentralised apps which tend to provide real-world applications for blockchain.

The development of layer three apps is crucial for creating real-world blockchain use cases. In contrast to conventional networks, they won't be able to extract quite so much value as the underlying blockchain.


Scalability is one of the factors preventing mainstream crypto adoption in the blockchain industry today. As demand for cryptocurrencies increases, so will the drive to build blockchain technology. Building a scalable system is the only way to solve the scalability trilemma since every level of the network has its own set of limitations.

The first layer is essential for the blockchain ecosystem since it forms the basis for all decentralised systems. The scaling issues with the underlying blockchain are resolved by layer two protocols. Unfortunately, the majority of layer three protocols (DApps) now only operate on layer one and ignore layer two. Therefore, it makes sense if these systems aren't living up to our expectations.

Blockchain technology is now quite advanced and in its infancy. As a result, the development of the blockchain will take years. To better understand the idea, it would be helpful to divide the numerous underlying elements that make up a blockchain into technical levels.