Layer 3 ethereum blockchain
Layer 3 ethereum blockchain

Layer 3 Explained

Layer-3 blockchains are layer-2s but instead of relying on the layer-1 for their security, they rely on a layer-2. The layer-3 adds extra functions, better raw performances for much cheaper costs.

Traditional businesses and projects are seeking to capitalize on the unique benefits of blockchain, such as enhanced security, transparency, and interoperability. The adoption from well established industry have long been awaited due to blockers like proper scaling solutions and onboarding problems. This is about to change and the trend is now very strong with initiatives such as real world asset tokenization and blockchain gaming.

Widespread adoption requires cheaper transaction cost both to properly process the throughput of larger scale business and to innovate in the onboarding of the layman. The Ethereum network (aka the layer 1) itself cannot process many transactions at once, leading to congestion and high transaction fees (or gas fees). Layer 2 rollups such as Optimistic Rollup and ZKRollups were introduced to tackle this problem. They reduce the computational effort by processing transactions off Ethereum and onto their own layer, thus significantly improving the throughput while reducing transaction costs. Layer 3 is the next evolution in the blockchain infrastructure, building upon the foundation of the layer 1 (Ethereum), and the scalability-focused layer 2 solutions.

What is Layer 3?

Layer 3 solution refers to an additional layer built on top of existing blockchain infrastructure (Layer 1 and Layer 2). It represents the latest tier in blockchain architecture, succeeding the base Layer 1—aka Ethereum—and Layer 2, which boosts transaction speeds and scalability while doing little to no compromise regarding the layer 1 security. Layer 3 solutions offer scaling options fitted for app-specific architectures and helps further decongest the Ethereum network. These solutions aim to address specific challenges, enhance functionalities, and further improve the scalability, interoperability, and capabilities of blockchain networks.

Here’s a breakdown of the layers:

  1. Layer 1: The base layer or the main blockchain protocol (Ethereum). It is responsible for the foundational elements of security and the consensus on the state of the blockchain.
  2. Layer 2: Built on top of Layer 1, Layer 2 solutions are scalability mechanisms that enable more transactions to be processed out of the Layer 1 or in a way that reduces the burden on the Layer 1 blockchain. Broad examples include sidechains, state channels, but usually Layer 2 refers to rollups.
  3. Layer 3: The next evolutionary step, Layer 3 solutions build upon the foundation laid by Layer 1 and scalability-focused Layer 2 solutions. Layer 3 introduces additional features, functionalities, or improvements to cater to specific use cases, making the blockchain infrastructure more versatile and capable.

Layer 3 solutions can vary in their focus and implementations. They may introduce new computational features, enhance smart contract capabilities, improve transaction throughput, or provide specialized solutions for specific applications or industries. The goal is to further optimize and extend the capabilities of the blockchain network to meet the evolving needs of decentralized applications and users.

Examples of Layer 3 solutions might include innovations like specialized virtual machines, advanced smart contract languages, or frameworks designed to enhance the overall performance and versatility of decentralized applications running on the blockchain. The aim is to strike a balance between efficiency, security, and flexibility as the blockchain ecosystem continues to evolve. This is the case for Arbitrum Stylus which exposes a WebAssembly virtual machine (WASM) running in parallel the Ethereum virtual machine (EVM).

While Layer 2 solutions focus on enhancing transaction throughput and reducing costs within a single blockchain framework. The state post computation of a Layer 2 is appended in the Layer 1 along with all the necessary inputs to verify this computation. The Layer 3 usually bring in new computational features to execute more complex program in the secure context of a blockchain.

The Layer 3 appends its post computation state on a Layer 2 and can post the necessary inputs to verify the computation either on the Layer 2 or on a cheaper network to lower its cost.

Muster, Arbitrum Stylus & Layer 3

Muster, our optimistic layer 3 rollup, is an Arbitrum Orbit Chain anchoring on Arbitrum One. It offers cheaper, faster transactions, greater flexibility and customization for blockchain projects, while leveraging the security and scalability of lower layers. The Arbitrum Stylus upgrade introduces a second virtual machine fully interoperable with the EVM running in parallel. This vastly improves smart contract development, it allows developers to use programming languages such as Rust, C, and C++ for creating smart contracts. WebAssembly execution runtime is much faster and can be leverage to address complex computation that would alternatively require a pre-compiled contract in the EVM. Typically we will use WebAssembly for digital signature verification on non-Ethereum supported curves. WebAssembly will also fit into the fully onchain game initiatives. Two virtual machines mean more things can be brought on chain and at a cheaper cost. Muster relies on a data availability committee to safe keep the transactional data instead of appending them in the lower layer, this technique highly save on transaction fees for little to no compromise on the overall security in a gaming use-case.

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