Introduction to Layer 2/3 Blockchains and Sidechains
What you’ll learn?
- The difference between layer 1, layer 2, and layer 3 blockchains
- Layer 1 examples: Bitcoin, Ethereum, Litecoin, Ripple
- Layer 2 examples: Polygon, Mantle, Immutable, Arbitrum, Optimism, Dgen chain
- Layer 3 examples: Ry chain, Orb 3
- How rollups (optimistic and zero-knowledge) work to aggregate transactions and improve scalability on layer 1 blockchains like Ethereum
- Resources to track blockchain adoption statistics and value locked in layer 2 protocols:
- com – tracks value locked in Ethereum layer 2 ecosystem
- DeFi Llama – tracks total value locked by blockchain and protocols
- Bridge TVL – shows total cumulative value bridged between layer 1 and layer 2
- How to analyze blockchain adoption metrics like daily transactions, unique addresses, average gas prices on platforms like Polygonscan and Etherscan
- Additional research tools:
- Hash rate divided by price chart to identify potential market tops/bottoms
- Blockcircle Research app with data on 18 blockchains and 1000+ assets
- DappRadar to see most actively used dapps by blockchain with metrics like unique users, transactions, NFT volume
Content Chapters
0:01 – Understanding the difference between layer 1 and layer 2 blockchains
0:08 – Bitcoin, Ethereum, Litecoin, and Ripple as examples of layer 1 blockchains
0:43 – Rollups (optimistic and zero-knowledge) used to aggregate transactions and improve scalability
2:00 – Examples of layer 2 and layer 3 blockchains
2:43 – Tracking blockchain adoption statistics of layer 1 and layer 2 to identify potential breakouts in demand
3:00 – Using L2beat to track value locked across the Ethereum-based layer 2 ecosystem
3:33 – Layer 3 projects: Dgen chain, Ry chain (gaming), and Orb 3 (social platforms)
4:20 – DeFi Llama for tracking total value locked by blockchain and protocols
4:51 – Bridge TVL for tracking total cumulative value bridged between layer 1 and layer 2
5:23 – Layer 2 blockchains as optimization solutions to bundle and roll up transactions
6:00 – Solana as a settlement, validating, and processing layer without the need for layer 2
6:27 – Bitcoin as the most decentralized blockchain
6:56 – Jumping into blockchain adoption statistics
7:00 – Analyzing Polygon scan for daily transactions, unique addresses, and average gas prices
8:25 – Comparing Etherscan statistics with Polygon
9:02 – Near Protocol as a potentially interesting layer 1 and layer 2 blockchain
9:37 – Using hash rate divided by price for the Bitcoin blockchain to identify market peaks and bottoms
10:54 – Blockcircle research app integrating data from 18 different blockchains
11:32 – DappRadar for tracking the most actively used decentralized applications by blockchain
12:48 – Being bullish on the Near blockchain due to its exploding number of active users, especially in gaming
13:43 – Using Solscan to track Solana blockchain statistics like transactions per second and number of blocks created
14:24 – Remembering to exclude transaction activity not related to actual user actions when analyzing blockchain adoption statistics