Blockchain 101 - Scaling Blockchains | Cool Web3 Opportunities | Issue 013
Hello, amazing person,
Glory Praise, here again, your paddy in this web3 space. In last week’s newsletter, we broke down blockchain layers 0 and 1. This week, we will be focusing on Layer 2 and Layer 3.
🌱 What’s New?
What is Layer 2?
Layer 2 refers to additional protocols built on top of the existing blockchains to improve transaction speed and scalability. Major cryptocurrencies like Bitcoin and Ethereum can't yet handle thousands of transactions per second, which limits their growth and widespread use.
Layer 2 solutions aim to increase this throughput, making these networks more practical for broader adoption.
Think of Layer 1 as a busy highway, and Layer 2 as a flyover that helps reduce traffic by taking some of the load off the main road.
Layer 2 solutions aim to improve the scalability and efficiency of Layer 1 blockchains by handling transactions off the main chain and then sending the results back. This helps to speed up transactions and reduce fees. Here are some key types of Layer 2 solutions:
Rollups
Rollups bundle multiple transactions together off-chain and then submit them to the main blockchain as a single transaction. There are two main types of rollups:
Optimistic Rollups: These assume transactions are valid and only check them if there's a dispute. This method is faster but can involve a delay if a dispute arises.
ZK-Rollups (Zero-Knowledge Rollups): These use cryptographic proofs to verify the validity of transactions. This method is more secure and efficient, as it compresses a large amount of transaction data into a small proof.
Sidechains
Sidechains are separate blockchains that run parallel to the main blockchain (Layer 1). They operate independently but are connected to the main chain, allowing assets to move between the two chains. Sidechains can be tailored to specific needs, offering flexibility and reducing congestion on the main chain.
Plasma
Plasma chains are smaller chains that branch off from the main blockchain. They handle a portion of the blockchain's work and periodically report back to the main chain. Plasma chains help reduce the load on the main chain and can process transactions more quickly and cheaply.
What is Layer 3?
Layer 3 is where the applications live. Think of it as the app store on your phone, where you can find various apps built on top of the operating system (in this case, the blockchain). Layer 3 includes decentralized applications (dApps) that provide specific services to users, such as games, financial services, and social media platforms. This layer makes blockchain technology accessible and useful for everyday tasks.
Examples of Layer 3:
Uniswap (on Ethereum): Uniswap is a decentralized exchange that allows users to trade cryptocurrencies directly without needing a central authority.
Aave (on Ethereum): Aave is a decentralized lending platform where users can borrow and lend cryptocurrencies without needing a traditional bank.
The next time you hear about Layer 2 or Layer 3 blockchains, I hope you get it! Layer 2 helps make transactions faster and cheaper, while Layer 3 is where all the cool apps are built, making blockchain technology useful for everyone.
Watch out for the next newsletter, where we will explore something else.
💡 Opportunity Finds
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OnlyDust: For developers, join OnlyDust and become part of a community dedicated to forging a legacy in decentralized development. Whether you're a seasoned developer or just starting, OnlyDust provides resources and projects to help you make your mark in the blockchain world. Forge your developer legacy now!
Devcon SEA Scholars Program: Apply for the Devcon SEA Scholars Program and secure a chance to attend Devcon in Southeast Asia. This scholarship is open for 100 Scholars divided across four categories including Ethereum Community Organizers, Artists & Sci-fi Writers, Law Students & Legal Professionals, and other Builders, looking to deepen their knowledge and network with industry leaders. Apply now and take the next step in your career!
The Seed Grant Program: is designed to provide teams with grants of up to $25,000 in USDC in non-dilutive funding to enhance the growth of the Starknet ecosystem. Check it out here
🎥 Latest YouTube Video
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📅 Upcoming Web3 Events
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📅 Date: 31st July, 2024
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Talk soon,
Glory Praise Emmanuel