Layer 1 and Layer 2 scaling refer to two different approaches to improving the scalability of blockchain networks.
Layer 1 scaling involves making changes to the underlying blockchain protocol itself to increase its capacity to process transactions. This typically involves making changes to the consensus algorithm, block size, block time, or other aspects of the protocol. Layer 1 scaling solutions aim to improve the capacity of the base layer of the blockchain, allowing it to handle more transactions per second and accommodate a larger number of users.
Layer 2 scaling, on the other hand, involves building additional protocols on top of the base blockchain layer to increase its capacity. These additional protocols can take many different forms, but the goal is always to move some of the processing off the main blockchain layer and onto a secondary layer. This can reduce the burden on the base layer, allowing it to handle more transactions without slowing down. Examples of Layer 2 scaling solutions include payment channels, sidechains, and state channels.
Both Layer 1 and Layer 2 scaling solutions are important for improving the scalability of blockchain networks. While Layer 1 scaling can increase the capacity of the base layer, it may not be enough to meet the needs of large-scale applications. Layer 2 scaling, on the other hand, can provide additional capacity and functionality without sacrificing the security and decentralization of the base layer.
