What is Layer 3 and why is it key to blockchain’s future
In stark contrast to the past two years, 2023 has the opportunity to lay a new foundation for the development of blockchain. That’s because this year will be defined by the application layer of the blockchain that will open up a whole host of new scaling solutions. At this level, the Web3 community has an opportunity to focus on refining both the underlying technology that powers the blockchain and the way it approaches much-needed solutions to some of the most insidious problems facing the crypto industry. In this way, layer 3 is set to help drive new innovation and mass adoption.
What exactly is layer 3?
Layer 1s are characterized as the basic blockchains such as Bitcoin and Ethereum that have their own native cryptocurrency that is used to reward those who work to secure the network itself. L2s are protocols built on top of L1s designed to increase transaction speed and reduce scaling difficulties for layer 1s while leveraging the security of the base chain. For example, Arbitrum is an L2 created to improve Ethereum’s transaction processing speed as well as overall flexibility and scalability, and it has given birth to a wide range of DeFi protocols. Layer 3s, on the other hand, offer even higher levels of customization. At this layer, developers can perform custom designs that L2s cannot easily achieve, especially for lower-cost execution and privacy-preserving features.
How L3s can reduce costs and improve scalability
While L2s are currently used for general scaling, L3s enable custom scaling and realize important functions—such as privacy—that L2s cannot easily achieve on their own. L3s increase the computational speeds and scalability of single applications by not having to share ZK circuits with other applications on a single chain.
Ethereum multilayer architecture was first proposed by the StarkWare team in Ethereum multilayer architecture. The current L2 acts as a general scaling, while the L3 achieves custom scaling. For example, an L3, which adopts custom circuits depending on the demand of a specific decentralized application, can achieve better performance. Another example is Validium as L3. This design provides higher levels of throughput at a relatively low cost for decentralized apps by avoiding pushing compressed data to L1 and using validators to secure the digital asset. L3s can be used as low-cost, high-performance scaling solutions that allow projects to have more choices for potential solutions, depending on their particular use cases.
Current barriers to L3 adoption
Tier 3s are emerging now and as such there are more issues and barriers to overcome to bring them to the next level. One of the main challenges is the lack of standardized infrastructure for L3s. Since L3s are built on top of L2s, they require a standard infrastructure to function effectively. Without this standardization, L3s may not reach their full potential, making it more difficult for developers to build applications on top of them.
Another challenge is the need for more development in ZK rollup technology, which is the underlying technology for L3s. ZK rollups have the potential to significantly improve the efficiency and scalability of L3s, but more work needs to be done to optimize this technology and make it more accessible to developers.
The Web3 ecosystem is actively working to develop new and improved zero-knowledge technologies and infrastructure for Layer 3. By standardizing infrastructure and continuing to innovate in ZK technology, we can overcome these small challenges that L3s face and bring them to the forefront of blockchain scaling solutions, drive innovation and widespread use in all industries.
What does the future of L3s look like?
While L2s offer a general scaling platform today and serve as the most cost-effective solution for now, the future belongs to a multi-layer network – one that can provide even more cost optimization and efficiency across the board.
Today, L3s are still in a very early stage. As we know, the underlying technologies of L3s are closely related to ZK rollups. Therefore, exploring ZK technology will be crucial for the development of L3s. That means that as the Web3 ecosystem continues to focus on building out new and improved ZK technologies, more refined and elegant L3s will emerge.
These new solutions are uniquely poised to make scaling easier and more cost-effective than ever, while offering more customized features than ever before. As a result, L3s will enable the entire industry to drive innovation forward – which will help give blockchain more use cases across all industries, leading to an inevitable increase in widespread adoption.
