What is a Layer 3?

In the context of cryptocurrency, Layer 3 refers to an additional layer built on top of a blockchain network's Layer 2 to provide additional scalability and customization for decentralized applications. Layer 3 enhances the capabilities of Layer 2 by offering features such as hyper-scalability, improved privacy, and better control for app designers.

It also provides easier and more cost-effective interoperability between different layers and networks. According to Vitalik Buterin's recent paper on Layer 3's, the ultimate goal of Layer 3 is to provide a more efficient and user-friendly experience for decentralized applications and transactions on blockchain networks.

‍

Layer 2 vs Layer 3

Layer 2 and Layer 3 are technical terms used in the cryptocurrency space to describe different levels of the technology stack.

Layer 2 refers to scaling solutions that operate on top of the base layer or Layer 1 (e.g., the Ethereum blockchain). The goal of Layer 2 solutions is to increase the transaction capacity of the base layer by offloading some of its work to the Layer 2.

Layer 3 refers to solutions that build on top of Layer 2, offering additional functionality and customization for specific use cases. These solutions can be designed for privacy, app-specific performance, or other purposes. For example, a Layer 3 solution could offer privacy-preserving transactions without including them in public Layer 2 solutions.

According to Starkware, a company of cryptographers working on zero knoweldge proofs, Layer 3 solutions are more sophisticated than just adding more scalability on top of Layer 2. Instead, they advocate for a layered approach where Layer 2 is for general-purpose scaling and Layer 3 is for customized functionality. The specific form of customization, such as specialized data compression or privacy systems, will depend on the use case.

‍

What are the Best Layer 3 Cryptos?

Currently, there are no widely-adopted Layer 3 cryptocurrencies, as the concept is still in its early stages of development. However, Starkware is one of the leading companies working on developing Layer 3 solutions and fractal scaling, and their work is highly regarded in the crypto community. They have yet to release a token or any real-world implementations of their L3 technology, but their efforts are seen as some of the most promising in the space.

‍

Bottom Line

In conclusion, Layer 3 (L3) is a promising new layer in the world of blockchain technology that offers advanced scalability, privacy, and customization for decentralized applications. Layer 3 enhances the capabilities of Layer 2 by offering additional functionality, and can be designed to meet specific use cases such as privacy and app-specific performance. The ultimate goal of L3 is to provide a more efficient and user-friendly experience for decentralized applications and transactions on blockchain networks.