Layer 1 (L1) refers to the base blockchain protocol — the foundational network that handles all core functions: consensus (agreeing on which transactions are valid), transaction processing, data storage, and security. Bitcoin, Ethereum, Solana, Cardano, and Avalanche are all Layer 1 blockchains. The term became widely used as Layer 2 scaling solutions emerged, creating a need to distinguish the base chain from networks built on top of it. L1 is where the source of truth lives — all Layer 2 solutions ultimately derive their security guarantees from an underlying L1.
What Layer 1 Does
A Layer 1 blockchain must handle:
| Function | Description |
|---|---|
| Consensus | All nodes agree on which transactions are valid and in what order |
| Transaction execution | Processing and finalizing transactions |
| Data storage | Storing the permanent, immutable ledger |
| Security | Validators/miners providing Sybil resistance |
| Settlement | Final, irreversible confirmation of transaction outcomes |
The Scalability Trilemma
The term “Layer 1” is intrinsically linked to Vitalik Buterin’s Scalability Trilemma — the observation that a blockchain can only optimize for two of three properties simultaneously:
- Decentralization — No central authority; many nodes can participate
- Security — Resistant to attacks and manipulation
- Scalability — High transaction throughput / low fees
Design choices:
- Bitcoin: Prioritizes decentralization + security → 7 TPS, limited by design
- Ethereum: Decentralization + security → 15-20 TPS on L1 (pushes scaling to L2)
- Solana: Security + scalability → higher TPS (50,000+ theoretical), less decentralized (expensive validators)
- BNB Chain: Scalability + some security → lower decentralization (21 validators)
Major Layer 1 Blockchains
| Chain | Consensus | TPS (approx.) | Notable Trade-off |
|---|---|---|---|
| Bitcoin | Proof of Work | 7 | Max decentralization + security, minimal scalability |
| Ethereum | Proof of Stake | 15–30 (L1) | Security + decentralization; scales via L2 |
| Solana | Proof of History + PoS | ~65,000 theoretical, ~2,000–5,000 in practice | High throughput, higher hardware requirements |
| BNB Chain | PoSA (21 validators) | ~300 | Fast and cheap, centralized |
| Avalanche | Avalanche consensus | ~4,500 | Fast finality, subnet architecture |
| Cardano | Ouroboros PoS | ~250 | Rigorous academic approach, slower development |
| Near Protocol | Nightshade sharding | ~100,000 theoretical | Native sharding |
| Tron | DPoS (27 SR) | ~2,000 | Cheap, centralized, popular in Asia |
L1 vs. L2
| Layer 1 | Layer 2 | |
|---|---|---|
| Security | Self-sovereign (own consensus) | Derives from L1 |
| Finality | Settled on L1 directly | May need L1 for final settlement |
| Throughput | Limited by L1 design | Much higher (offloads to L2) |
| Cost | L1 gas fees | Much cheaper per transaction |
| Examples | Ethereum, Bitcoin, Solana | Arbitrum, Optimism, Base, Lightning Network |
L1 Competitive Landscape
The “Ethereum killers” narrative (2017–present) has driven waves of L1 launches, each promising superior throughput:
- 2017–2018: EOS, NEO, Tron, Cardano
- 2020–2021: Solana, Avalanche, Terra, Fantom
- 2022–2024: Aptos, Sui, Sei, Monad, MegaETH
None have displaced Ethereum’s developer ecosystem dominance, though Solana captured significant market share in retail trading and DeFi activity (2023–2025).
Related Terms
Sources
- Buterin, V. (2014). “A Next-Generation Smart Contract and Decentralized Application Platform.” Ethereum Foundation White Paper.
- Croman, K. et al. (2016). “On Scaling Decentralized Blockchains.” Financial Cryptography and Data Security.
- Zamfir, V. (2015). “Introducing Casper ‘the Friendly Ghost’.” Ethereum Foundation Blog.
- Kwon, J. & Buchman, E. (2019). “Cosmos: A Network of Distributed Ledgers.” Cosmos White Paper.
- Yakovenko, A. (2017). “Solana: A New Architecture for a High Performance Blockchain v0.8.13.” Solana Foundation White Paper.