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What Are Layer 1 and Layer 2 Blockchain Networks?




What Are Layer 1 and Layer 2 Blockchain Networks?

As the smart contract wars heat up, Layer 1 vs. Layer 2 blockchains are differentiating. 

From Proof-of-Work to Proof-of-Stake blockchains, each has its own way to scale to accommodate transaction volume. 

All computer networks rely on bandwidth to relay data, including blockchain networks. However, the latter are more susceptible to a bandwidth scaling problem than highly centralized networks:

What Is the Blockchain Scalability Problem?

  • Blockchain networks are decentralized, composed of nodes (computers in a network holding the entire ledger). This means that each node has to exert considerable computing, bandwidth, and storage resources to provide and maintain access to the ledger.
  • The more decentralized a blockchain is, the more nodes it will have. While this redundancy is great for the network’s security, it is not good for its speed. That’s because more nodes are contributing to transaction verification. 

This balancing act between security, decentralization, and scalability is known as the Blockchain Trilemma. Simply put, if a blockchain network is highly centralized, it is less secure and more scalable. The low node count would make transactions faster because the computing power would be less distributed. 

In turn, the low node count would increase the network’s vulnerability. After all, it takes control of 51% of nodes to be compromised by hackers.

In such a scenario, it would then be possible to block new transactions from being added to the blockchain. Moreover, the transactions could be re-ordered or even reversed. The latter would then lead to the double-spending problem, in which the same amount of digital cash is spent more than once.

Needless to say, the looming threat of the 51% attack would render all cryptocurrencies valueless. For this reason, it is not a coincidence that the most decentralized blockchain networks are the ones that are the most popular: Ethereum (ETH) with 4,457 nodes and Bitcoin (BTC) with 15,733 nodes. Out of thousands of cryptocurrencies, the pair have a market capitalization of $503B, or 57% of the total value of all cryptocurrencies.  

However, because they are so decentralized and secure, they are less scalable. In practice, this translates to high transaction fees and long transaction confirmation times.

So the more decentralized the blockchain the more popular it is, yet it becomes less affordable and slower. That’s quite the conundrum.

How Is the Blockchain Trilemma Addressed?

What do you do with a safe but congested highway? It’s quite simple — you connect a road to it in order to offload the traffic. This is exactly the difference between Layer 1 and Layer 2 blockchain networks.

Layer 1 is the main blockchain network in charge of on-chain transactions, while Layer 2 is the connected network in charge of off-chain transactions. The Bitcoin network is Layer 1. 

It offers an abysmal speed of five to seven transactions per second (tps). This resulted in transactions that sometimes took hours to complete. Suffice it to say, such a network could never enable Bitcoin to be used as a cryptocurrency in regular daily shopping.

Bitcoin’s Lightning Network is a Layer 2 scalability solution making  Bitcoin transactions with negligible fees and near-instant transaction time.  

Since May 2021, the number of LN channels has more than doubled. Its channels facilitate off-chain transactions, which are then bundled and brought back to be recorded on Bitcoin’s Layer 1 mainchain.

On a technical level, Lightning Network is a peer-to-peer (P2P) system that opens channels between parties, such as a customer and a shop. Although the amount of transactions is unlimited and nearly instant, one does have to lock a certain Bitcoin amount first. Once locked in, recipients effectively invoice the locked amount as needed and as long the channel remains open and funded.

Most importantly, because there are no Layer 1 confirmations needed on an LN channel. When the transactions on a channel are completed, the channel is closed, and its payment record is consolidated as a single transaction. As such, it is then added to Bitcoin’s Layer 1.

The end result is bundling multiple transactions off-chain (on Layer 2) and adding them in a compact form to Layer 1. Likewise, the same principle of bundling off-chain data to feed back to Layer 1 works with Ethereum and its many Layer 2 scalability solutions.

Top 10 Layer 2 scalability solutions for Ethereum. Image credit:

Although serving the same purpose, Layer 2 scalability solutions can further be divided into:

  • State channels, such as Lightning Network, which employ two-way channel communication without submitting transactions to miners. Aside from LN, state channels are employed by Celer, Ethereum’s Raiden Network, and Liquid Network. 
  • Nested blockchains, such as Ethereum’s OMG Plasma Network, in which the two act in a parent-child relationship. While Layer 2 executes transactions, Layer 1 issues and verifies them. 
  • Rollups, as the most common Layer 2 scalability solutions. They rollup and run multiple transactions off-chain and bring them back to Layer 1 for permanent record.
  • Sidechains, a hybrid between channels and nested blockchains. They link to Layer 1 mainchain via “bridges” and have their own consensus mechanisms, which alleviates the mainchain from having to validate transactions. Sidechains are commonly used to batch a large number of transactions. For example, the largest blockchain game, Axie Infinity, has its Ronin sidechain connected to Ethereum. 

However, there are blockchain Layer 1 networks that don’t rely on external Layer 2 networks of any type. They were designed from the get-go to internally deal with scalability as layer 1 networks.

Layer 1 Blockchains and Scalability Solutions

Although Ethereum relies on external L2 scalability networks, it, too, has some Layer 1 scalability tricks up its sleeve. However, they are most likely to be implemented later in 2023 as a part of the overall ETH 2.0 upgrade from Proof-of-Work to Proof-of-Stake consensus.

The main one is sharding. Even before blockchain technology became popular, sharding has been a popular database management method. This Layer 1 scaling solution breaks the network into chunks called shards. Each shard processes and validates transactions in parallel.

Furthermore, nodes assigned to shards don’t have to hold the entire blockchain record. Instead, they share data (balances, addresses) between each other and feed proofs to the mainchain. Alongside Ethereum, blockchains that are using or exploring sharding are Tezos, Zilliqa, and Qtum.

Here are some PoS blockchains that are Layer 1s:

Algorand (ALGO)

Algorand has its modified Pure Proof-of-Stake (PPoS) consensus. Simply put, it means that all ALGO holders with just one token gain network rewards when people use the blockchain. In contrast, Ethereum has a rather high barrier to entry at a 32 ETH (~$90k) stake.

When it comes to scalability, Algorand has an integrated two-tier architecture in which more complex transactions reserved for DeFi protocols are handled by one chain, while simple transactions (token transfers) are handled by another. This way, Algorand can inherently achieve tps up to 1,000, drastically outperforming Ethereum’s Layer 1 at 14–17 tps.

However, considering that Algorand has under 100 dApps available, compared to Ethereum’s nearly 3,000, it remains to be seen if it is truly scalable. One could make a case that a low barrier to staking could make the network more vulnerable to malicious actors. Likewise, Algorand doesn’t have a slashing mechanism to punish bad actors, unlike Ethereum.

Elrond (EGLD)

Elrond uses sharding as its main Layer 1 scalability solution. Theoretically, it can process up to 100,000 tps thanks to the combination of secure proof-of-stake (SPoS) consensus protocol and Adaptive State Sharding (ASS).

ASS is dynamic sharding, in which shards either split or merge, depending on the network’s traffic load. Furthermore, not only is the network sharded, but so are transactions themselves. The security is boosted by the fact that validators are distributed across shards, making it less likely for a malicious shard takeover to happen.

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Celo (CELO)

Celo is a hard fork from Go Ethereum (Geth), which happened in 2017. After forking, it implemented proof-of-stake and a brand-new address system. This makes it possible to use a phone number as a public key, pushing Celo as the global mobile payment solution.

Celo has its own stablecoin. In fact, three of them: cEUR, cUSD, and cREAL. Because Celo uses PBFT (Practical Byzantine Fault Tolerance) for its PoS consensus, it can tolerate malicious nodes even when there is a small number of them. In other words, an extra node added increases the network’s communication overhead exponentially.

Harmony (ONE)

Another blockchain with its own tweaked PoS, Harmony uses effective proof-of-stake (EPoS). Its mainchain consists of four shards that simultaneously verify and add new transactions. Not only does each one have separate validators, but each one can execute transactions at different speeds, resulting in different block heights.

Block height is critical for blockchain security because it differentiates between the blocks. With both sharding and block height randomization, Harmony strikes a balance between scalability and security. This is further boosted by Harmony’s cross-chain Horizon bridge, allowing the network to connect to Ethereum’s Layer 2 scalability solutions.

Will Self-Contained Layer 1 Blockchains Prevail?

There are many more layer 1 networks to consider: Cardano (ADA), Solana (SOL), THORChain (RUNE), Polkadot (DOT), Avalanche (AVAX), Fantom (FTM), Binance Smart Chain (BNB), Tron (TRX), Kava (KAVA) Radix (DLT), and others.

However, none of them have been stress-tested in real-world conditions as much as Ethereum has been, with its large portfolio of dApps. On paper, each L1 network makes a claim to solve the Blockchain Trilemma in some way.

The most realistic and practical way seems to be to offload the bottleneck to Layer 2 networks. This bridging does introduce some level of complexity for the end-user, but so does cross-chain bridging as well.

In the end, the blockchain ecosystem will be diversified with many Layer 1 vs. Layer 2 solutions working together as a meta-blockchain network.

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PrivaCrip to Power a Blockchain Network That Could Follow Cardano & XRP




PrivaCrip to Power a Blockchain Network That Could Follow Cardano & XRP




When the first decentralised blockchain was popularised in 2008 by Satoshi Nakamoto, the door was open for people across the globe to transact more securely and seamlessly. Many blockchain networks have been built and powered by native crypto tokens, including PrivaCrip (PRCR).

Native tokens exist for several reasons. Aside from acting as digital currencies, they perform various functions. Helping blockchains improve data traceability, security, transparency, and trustworthiness shared throughout the network. They also assist in reducing costs through their ever-evolving efficient methods.

Cardano (ADA) and Ripple (XRP) are among the best blockchain-based cryptos that this article will discuss. We will also look at how PrivaCrip (PRCR) will power a blockchain network set to launch into the crypto space.

Top Tier Crypto Makes its Mark – Cardano (ADA)

Cardano (ADA) has been around in the crypto space since 2017. The Proof-of-Stake (PoS), Ouroborous Cardano (ADA), was established using a research-based methodology.

Research is the backbone of Cardano (ADA) and is integral to its success in the cryptocurrency market. Cardano (ADA) uses an evidence-driven mechanism and peer-reviewed research to run its ecosystem to drive its evolution.




Among many things, Cardano (ADA) helps establish DeFi products and provides a suite of financial solutions. Crypto enthusiasts can stake Cardano (ADA) for a chance to earn rewards for their holdings.

With 2022 providing challenges in cryptocurrencies across the globe, Cardano (ADA) is one of the few cryptos to see a surge in on-chain trading volume this year. CoinMarketCap lists Cardano (ADA) as the 7th largest crypto by market capitalization at the time of writing.

Making Waves – Ripple (XRP)

Launched in 2012, Ripple (XRP) is a leading provider of crypto solutions for businesses. Ripple (XRP) provides developers with a solid open-source foundation for executing demanding projects. It is fast, energy-efficient, cost-effective, and reliable.

The solutions provided by Ripple (XRP) enable developers to solve inefficiencies, including asset tokenization and remittance. Therefore, individuals and businesses may apply Ripple (XRP) for DeFi, payments, tokenization, and more.

Crypto enthusiasts with a long-term focus may find Ripple (XRP) a valuable investing tool. Token holders can use Ripple (XRP) for staking its mainnet platform for a chance to grow their earnings and maximise profit.

At the time of writing, it ranks number 6 on CoinMarketCap, making it a cryptocurrency to buy now.

The New Face Of Privacy – PrivaCrip (PRCR)

The soon-to-launch PrivaCrip (PRCR) is a cryptocurrency built for Web3 data privacy. It will allow users to develop and use permissionless and privacy-preserving applications. This unique feature of PrivaCrip (PRCR) secures apps, protects users, and fosters the creation of many new Web3 uses.

PrivaCrip (PRCR) will drive a blockchain that creates a more empowering and inclusive internet. It will enable developers to build secure dApps using private contracts based on original privacy research (OPR) to revolutionise Web3.

PrivaCrip (PRCR) will begin pre-sale soon and has an initial token price of 0.10 USD. According to the whitepaper, there will be a total supply of 190 million tokens, of which 40% of the total supply will go to the pre-sale.

Crypto enthusiasts who purchase PrivaCrip (PRCR) during the pre-sale will receive the most significant long-term rewards and bonuses. Those who buy with Bitcoin (BTC) will receive a 10% bonus. Also, those using Ethereum (ETH) to purchase will receive 15% of the total PrivaCrip (PRCR) they purchase as a bonus.

10% of PrivaCrip’s (PRCR) total supply is up for distribution as staking rewards, meaning that token holders who stake will receive rewards for their contribution to the crypto’s advancement.

The Bottomline 

Blockchain networks are continuously evolving, and so are the crypto tokens that power them. Cardano (ADA) and Ripple (XRP) have contributed tremendously to the success of their blockchain networks, gathering mass appeal.

PrivaCrip (PRCR), for its part, will drive a security-enabled blockchain and scalability in private DeFi, empower data tokenization, and bring together a fast-growing community. Acting on its promise, it has the potential to become the next big mover in cryptocurrency.

For more on PrivaCrip (PRCR), check below:





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Cardano (ADA) Withdrawal Fees Waved by Bitrue Exchange




Cardano Reaches “Important Milestone” on Road to Vasil Upgrade

Alex Dovbnya

Singapore-based cryptocurrency exchange made Cardano one of its base trading pairs earlier this year

Singapore-based cryptocurrency exchange Bitrue announced that it had temporarily waived withdrawal fees for the Cardano (ADA) cryptocurrency.

The trading platform says that the move is meant to celebrate the support it received from the community behind the cryptocurrency.

Users will be able to withdraw ADA without paying any fees until mid-September.

Bitrue has stressed that it wants users to have “as much choice as possible” when it comes to custody options. Those who want to hold their ADA tokens will not be able to do so without paying an additional commission.

At the same time, Bitrue has touted its “Power Piggy” yield-farm investment program for those who want to earn passive income with ADA.

As reported by U.Today, Bitrue introduced the token as its base currency back in February.

In June 2021, it also became the first cryptocurrency trading platform to add support for Cardano-based native tokens.

Last month, Bitrue also announced a staking initiative with the ADA cryptocurrency. It decided to contribute a million tokens to some of the top Cardano staking pools in an effort to boost the level of decentralization.

Earlier this year, SundaeSwap (SUNDAE), the native token of the SundaeSwap exchange, also became available on Bitrue.

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WingRiders Losses 59% Of Its Total Value Locked, Plunges Cardano TVL Below $100M




Cardano Founder Charles Hoskinson Criticize SEC Cracking Down on Companies Outside Its Jurisdiction

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Popular Cardano-based decentralized exchange WingRiders has lost its position as the most valuable DEX on Cardano. 

WingRiders slumped from the first position to third after losing more than 59% of the total value locked (TVL) on the platform in the past 30 days. 

At the time of writing this line, WingRiders is now the third-largest DEX by total value locked, with a TVL of $19.66 million. It is noteworthy that WingRiders maintained the top spot for more than two months, claiming  42% of TVL On Cardano. However, the DEX has fallen from glory ever since. 

Minswap Is Now Cardano’s Most Valuable DEX

The development also affected the total value locked on Cardano. The total value locked on Cardano has fallen below $100 million in the last 30 days after the WingRiders TVL slumped. 

cardano total value locked
Cardano total value locked

Interestingly, Minswap has taken the lead to become the most valuable decentralized exchange on Cardano after the massive decline of WingRiders’ TVL. 

At press time, Minswap is leading, with a $49.09 million total value locked on the platform. The DEX hit the milestone after recording a massive growth of 30.9% in its TVL in the past 30 days. Minswap accounts for 51.82% of the total value locked on Cardano. 

SundaeSwap, the first decentralized exchange on Cardano, is now the second most valuable DEX in the ecosystem. SundaeSwap is second in the ranking, with $19.72 million in TVL. 

Like WingRiders, SundaeSwap has also lost a significant amount of its TVL over the past 30 days. In the past month, SundaeSwap has lost nearly 10% of the funds locked on the platform.

Commenting on the development, Cardano Daily, a platform that shares new developments about Cardano, said: 

“After the major decline of @wingriderscom, the TVL scenario of the Cardano ecosystem has stabilized back to normal as we have seen in the past few weeks. @MinswapDEX still led the ecosystem with $51M TVL, contributing 50% of the ecosystem.” 

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