Layer 1 blockchains like Solana, the Bitcoin Network, and Ethereum (until the merge is fully complete) are all monolithic blockchains. They have a single chain structure based on a distributed network of nodes—the hardware layer of a blockchain—that are responsible for the following:
- Ensuring the availability of block data
- The execution and settlement of transactions
Monolithic blockchain architecture entails that all nodes function together as a monolith to manage the above network activity while simultaneously providing a foundation for decentralized applications (DApps) to build on.
It is simply too much responsibility for L1 nodes to handle. This results in the stagnation of network activity and reduced expansion as nodes cannot maintain their necessary functions efficiently.
Limitations of Layer 2 Blockchains
Layer 2 blockchains are primarily designed as scaling solutions to solve the network congestion of monolithic L1s by increasing transaction throughput and providing space for DApp development. However, L2 nodes are not designed to secure the blockchain as they rely on the L1 main chain for block finality and cannot ensure the availability of block data until it has been published onto an L1 network.
L2 nodes are also not designed to execute, settle, or reach consensus on network transactions. The primary purpose of an L2 blockchain is to offload transactions from the mainchain onto the L2 via rollups to be stored temporarily, where they will later be published onto the L1 or serve as DApp platforms.
The Solution of Layer 0 Modularity
Layer 0 blockchains specifically provide a basis for L1 blockchains to build on so that multiple L1 chains can operate off the L0 protocol. The architecture of L0 blockchains is modular, which means that their node structure is decentralized to allow for a variety of node types in a network; each node type in an L0 ecosystem is responsible for a different task. For example, there are:
- Full Nodes contain a ledger of each block hash and information about all validated user transactions to ensure data availability. The hardware devices powering full nodes can operate anonymously.
- Consensus Nodes operate to reach consensus (obviously) on the legitimacy of either a user transaction, executed smart contract or agree on which block signature to sign. Once consensus is achieved, the information stored on a proposed block is validated, and the block itself is added to the chain.
- Light Nodes use less computational power than full nodes as they only store a portion of block records and focus on executing and settling user transactions. Despite only storing a portion of all block records, light nodes can index enough data to request evidence on individual blocks when needed.
- Super Nodes are full nodes that operate publicly with identifying information about their hardware devices being visible to the entire network. Supernodes can also communicate with and connect to any other node in the network. This type of node is used to set and maintain the parameters of an L0 and also secure the network.
By virtue of how the nodes that make up an L0 blockchain are modular, which again means that there are different types for handling specific tasks such as data provision, consensus achievement, and transaction execution and settlement, attached L1 chains are enabled to prioritize growing their subnetworks. L0 blockchains enable L1s to build off them by providing open-source software development kits (SDK) to the L1s, which can be used as platforms for growth. L0 blockchains drastically increase the potential for L1 scalability.
The modularity of L0 blockchain architecture alleviates node responsibility by delegating tasks to different node types. This relieves on-chain congestion because of how DApps receive their own layer to build on; this also increases transaction throughput as specific nodes can consistently focus on data validation.
Examples of L0’s
Polkadot: A modular Layer 0 blockchain, called the Relay Chain, enables other L1s, known as parachains, to build on top of it. Being the core of the Polkadot ecosystem, the Relay Chain is heterogeneous, meaning that permission is required for users to participate in or contribute towards its network but that all its attached parachains (which run parallel to the Relay Chain) are public and permissionless. The Polkadot SDK that developers of parachains build on is called Substrate.
Cosmos: The Cosmos SDK that the L1s in its ecosystem build on is called the Cosmos Hub; all L1s attached to the Cosmos Hub are called zones. Cosmos is a modular Layer 0 inter-blockchain communication protocol whose hardware layer allows varying blockchains to communicate data to one another.
Avalanche: Avalanche’s structure provides three Layer 0 blockchains for other L1s to build on. These three L0 chains are called the X-Chain, P-Chain, and C-Chain. The X or Exchange Chain , which features the Avalanche Virtual Machine (AVM), is used for creating and trading AVAX native assets. The P or Platform Chain coordinates validators to establish additional subnetworks built on the P Chain. The C or Contract Chain is dedicated to the deployment and execution of smart contracts and DApp development; the C Chain also enables the execution of Ethereum Virtual Machine (EVM) compatible smart contracts.
Horizen: The core of the Horizen Layer 0 protocol is the Zendoo SDK, which provides a base for constructing modular L1s. L1s built off Zendoo are referred to as sidechains, and Horizen claims that it is an L0 network that provides a side-chain growth platform. Horizen maintains its network through a combination of proprietary ZenNodes—which secure the network by storing block data, Super Nodes (which were covered already), and Secure Nodes, which reliably enhance network security through point-to-point decentralization and encryption.
The Future of L0’s
Further adoption of DLT will lead to network stress as L1 blockchains will have to process increased amounts of data and provide further space for DApp development. Layer 0 blockchains provide an additional layer of hardware infrastructure for L1s to build on and expand. The modularity of L0 blockchains is revolutionary for distributed network scalability and will become more prominent with time.