Understanding L0, L1, L2, L3 in Blockchain

Layers L0, L1, L2, and L3 are solutions proposed by the blockchain community to address fundamental issues: slow speed, lack of scalability, and difficulty in connecting between chains.

Imagine blockchain as a tower: L0 is the foundation, L1 is the body of the tower, L2 is the upper floors, and L3 is the decorative details at the top. Each floor relies on the one below it and has its own advantages.

L0: Data Transmission Layer

L0 is the lowest layer, acting as a “shipper” in the blockchain. It is responsible for transporting data between points on the network, using encryption and distributed storage to ensure that data is not altered or stolen. In addition, L0 also helps different blockchains “talk” to each other through technical protocols.

Practical example:

• IPFS: store files in a distributed manner
• Filecoin: a decentralized storage network based on IPFS
• ERC-20/721/1155: token standards on Ethereum
• TLS/HTTPS: encryption protocol protecting data

L1: Solutions for Layer 1 Expansion

L1 is the main body of the tower, corresponding to major blockchains such as Bitcoin and Ethereum. Instead of creating a subsidiary chain, L1 directly improves the original protocol to increase transaction processing speed and scalability.

Practical example:

• Bitcoin: uses PoW, secure but slow
• Ethereum: previously used PoW, now switched to PoS, more flexible
• BSC: uses PoSA, low fees, fast speed
• Avalanche: uses Avalanche consensus, processes transactions quickly

L2: Off-Chain Expansion Solutions

L2 operates as a “smart assistant”, handling part of the transactions off the main chain and then recording the results back to L1. This method helps to reduce the load on the mainchain and makes transactions cheaper and faster.

Practical example:

• State Channels: create private trading channels
• Sidechains: side chains parallel to the mainchain
• Lightning Network: instant payment network
• Optimistic Rollup: compress transactions by assuming validity
• ZkRollup: uses zero-knowledge proofs, both fast and secure

L3: Application Layer

L3 is where real users interact. These are decentralized applications (DApps) such as DeFi, NFT, Web3 social networks… where blockchain becomes a “tool” rather than just a “platform”.

Practical example:

• DApps: applications running on blockchain
• DeFi: decentralized financial services
• NFT: a digital asset with uniqueness
• Privacy tools: privacy protection tools

Summary: L0 is “railway”, L1 is “main train”, L2 is “shortcut”, and L3 is “destination” where everything happens.