What are Layer 1 and Layer 2 Blockchain Networks?

To solve these problems and support real use cases, many networks are proposed with various approaches.

There are two main categories, Layer 1 (L1) blockchains and Layer 2 (L2).

L1 refers to a base network, such as Bitcoin and Ethereum, that validates and finalizes transactions on its own.

There are a lot of L1 blockchains out there, the popular ones include the BNB Chain, Solana, Avalanche, etc.

We talked about the scalability issue of L1 networks, thus developers create Layer 2 blockchains. L2s rely on L1s for security and stability but allow users to make transactions at a vast scale and lower cost.

Here is a high-level explanation of how it works: a large amount of transactions are first pre-processed and packed on L2 before they are eventually finalized on L1.

To further clarify this, let’s look at Ethereum, since many popular L2 chains are built on Ethereum, including Polygon, Optimism, Arbitrum, etc. These chains are also referred to as EVM (Ethereum Virtual Machine) chains.

Imagine 1,000 transactions on Ethereum, which would take a lot of network space and power to process.

Now these 1,000 transactions are pre-packed into 1 transaction on a L2, reducing processing power by 1000% for the L1 Ethereum network, but with the same stability and security at much lower cost.


The hottest new chain in Web3 is Base, an Ethereum L2 incubated by Coinbase.

With the mission to make Ethereum accessible to everyone, Base provides the stability and security of the EVM environment at much lower cost.

Here’s how they do it:

Base is built on Optimism’s open-source OP Stack. Also a Ethereum L2, Optimism’s core initiative is funding public goods, and the OP Stack is a public good available to everyone. Base will join force to ensure that.

Incubated by the largest CEX Coinbase, Base offers the best scalability solutions leveraging Coinbase’s products and seamless integrations with the Coinbase ecosystem.