The difference between layer-1, layer-2 and Layer and Layer-3 Blockchains (2025)

This comprehensive guide details the differences between first layer blockchains (base networks such as Bitcoin (BTC) and Ethereum (ETH)), second layer solutions (built on top of the first layer to enhance scalability), and third layer frameworks (specific application layers).

By 2025, significant progress includes: breakthroughs in Layer 1 efficiency, with sharding technology reducing costs by 80%; integration of Layer 2, with cross-layer transfers now taking less than 5 seconds; and expansion of Layer 3, now hosting over 12,000 applications. The transaction speeds across all layers have significantly improved, with Layer 1 network increasing by 900% (now at 100-500 TPS), Layer 2 solutions reaching over 10,000 TPS, and Layer 3 frameworks exceeding 50,000 TPS. The modular Blockchain approach has become mainstream, enabling platforms to overcome the Blockchain trilemma while providing security, decentralization, and scalability.

Latest developments in 2025

The landscape of the Blockchain layer underwent significant changes in 2025, with major advancements including:

• Layer 1 Efficiency Breakthrough: The main Layer 1 network has implemented a sharding mechanism, reducing transaction costs by 80% while maintaining security protocols.
• Second-layer integration: Cross-layer compatibility has become the standard, and seamless asset transfers between first-layer and second-layer solutions now average less than 5 seconds.
• Third-layer application expansion: The DApp ecosystem is growing exponentially, with over 12,000 applications now running on various third-layer infrastructures.

Modular blockchain approaches have become mainstream, with dedicated layers handling different functions, rather than trying to solve all blockchain challenges on a single layer. This architectural shift allows platforms to overcome the blockchain trilemma, providing solutions that simultaneously possess security, decentralization, and high scalability.

Gate (Gate.io) provides comprehensive support for all layer solutions, ensuring an optimized trading experience regardless of the blockchain infrastructure preferred by users.

What are the differences between Layer-1, Layer-2, and Layer-3 Blockchains?

• Layer-1 Blockchain is the foundational protocol that possesses most of the main functionalities.
• The main function of Layer-2 Blockchain is to increase the scalability of the Blockchain and improve efficiency.
• Layer-3 Blockchain is the infrastructure that supports decentralized applications and facilitates communication between networks.
• Layer-1 Blockchain includes Bitcoin, Binance Chain, and Ethereum, etc.

Introduction

When people use Blockchain, they often face some challenges, such as slow transaction speeds and high gas fees. Most networks perform differently in these key areas. Some of these functions depend on the architecture of the Blockchain, including the type of consensus mechanism used by the Blockchain. As part of the infrastructure, most major Blockchains consist of different layers, such as Layer-1, Layer-2, and Layer-3. This article will explore the relevant concepts of Layer-1, Layer-2, and Layer-3 with you, as well as how these three complement each other.

Layer-1 Blockchain

Layer-1 Blockchain is the foundation of the entire web3 infrastructure. In other words, it is the Blockchain upon which all other components exist. Some key components of the Layer-1 architecture include hardware, consensus layer, network layer, application layer, and data layer, among others.

These basic blockchain components have different functions such as enhanced security, compatibility, and communication. For example, the consensus layer determines the speed and efficiency of transactions. Ethereum, Binance Chain, and Bitcoin all belong to Layer-1 blockchains.

In addition, Layer-1 Blockchain provides security for decentralized applications that exist on it. In most cases, they also support transactions conducted on Layer-2 Blockchain. Furthermore, developers build decentralized applications on Layer-1 Blockchain.

What problems will Layer-1 Blockchain encounter?

Currently, Layer-1 Blockchains face some issues, such as scalability problems. Because in most cases, such Blockchains do not have the capability to handle a large number of transactions at once. This is also why many of these Blockchains have slow transaction speeds, and transaction fees are often extremely high.

In addition, Layer-1 Blockchain also faces the three major challenges of Blockchain, namely that such Blockchain networks can only simultaneously satisfy one or two key aspects: security, speed, and scalability. This indicates that a Blockchain with good scalability either has slow transaction speeds or poor security, or both. This is where Layer-2 and Layer-3 Blockchains come into play, as they help address the issues of scalability, security, speed, and interoperability.

Layer-2 Blockchain

Layer-2 Blockchain provides scalability solutions for the entire network system. Essentially, Layer-2 networks operate on top of the main Blockchain, optimizing and enhancing the scalability and efficiency of the entire system.

Layer-2 blockchains transfer transactions from the main blockchain, thereby reducing network congestion and increasing throughput during the process. They are like small blockchains that connect to the central chain. Although there are many types of Layer-2 systems in blockchain, their functions are all aimed at a clear goal - optimizing the entire network ecosystem.

It is important to note that most Layer-2 solutions typically use off-chain mechanisms to improve speed and operational efficiency. For example, some Layer-2 blockchains execute batch transactions, which batch the transactions into the main blockchain.

Lightning, which exists on the Bitcoin 区块链, belongs to the Layer-2 network. In fact, Lightning is a scaling solution that supports fast transactions and low-cost transactions.

Polygon, which exists on the Ethereum Blockchain, is also a Layer-2 solution. Similar to the Lightning Network, Polygon optimizes the speed and transaction output of the network. It also supports many decentralized applications (dApps). Therefore, Layer-2 Blockchains create a new role of “division of labor” in the network ecosystem.

Different Layer-2 Solutions

The network can utilize different types of Layer-2 solutions, such as state channels, sidechains, and rollups.

State Chain: A State Chain is a small blockchain that exists on the Layer-1 network infrastructure to facilitate bidirectional communication between the blockchain and off-chain transaction substructures, enhancing transaction volume and speed. Liquid Network, Bitcoin Lightning, and Ethereum’s Raiden Network are all part of State Chains.

Sidechain: A sidechain is a subnetwork of a Layer-1 blockchain that can handle large volumes of transactions offline and send them to the main chain. Therefore, they help to increase the speed and transaction volume of the blockchain. However, the main blockchain is responsible for maintaining network security and resolving related conflicts.

Rollup: Rollup is a small Blockchain that executes transactions outside of the main Blockchain and relays them back to the main structure.

Layer-3 Blockchain

Layer-3 Blockchain is a substructure that supports decentralized applications. This is also why it is referred to as the application layer. First, the Layer-3 chain enhances interoperability between the main protocol and various other chains.

What we are talking about are decentralized applications, such as gaming applications, which run on this layer. Blockchains like Ethereum and Solana host many decentralized finance (DeFi) applications. However, there are some blockchains, such as Bitcoin, that do not host decentralized applications.

Currently, there are various initiatives integrating some applications on the Bitcoin Blockchain. CakeFi is developed on a fork of DeFiChain and provides lending, staking, and liquidity mining functions for the Bitcoin Blockchain. However, CakeFi is completely independent of the Bitcoin Blockchain.

Ethereum is the blockchain that hosts the most decentralized applications. Currently, it has over 3,000 decentralized applications with a total market cap of over $185 billion.

Solana belongs to Layer-3 Blockchain, which hosts hundreds of decentralized applications. As of now, more than 500 programs are running on this Blockchain, with a total market value exceeding 15 billion dollars. The fact that the Bitcoin network does not host decentralized applications also makes the breadth and depth of Ethereum’s applications comparatively higher.

Conclusion

During various activities, the Blockchain has faced many difficulties such as slow transaction speeds and poor throughput. Therefore, developers have come up with a series of methods to address these fundamental issues. They introduced additional solutions in the form of Layer-2 and Layer-3 solutions. Layer-2 Blockchains optimize the scalability of the network, while Layer-3 Blockchains enhance the interoperability of the network.