L1

L1 refers to “Layer 1” in the context of blockchain and cryptocurrency technologies.

Layer 1 is the foundational layer, the underlying blockchain technology where transactions are recorded. Examples of Layer 1 blockchains include Bitcoin, Ethereum, and many other blockchain networks.

In these systems, Layer 1 is responsible for maintaining the distributed ledger and achieving consensus on the state of the network. It provides the base level of security and decentralization, but it also often suffers from scalability issues as transaction volumes increase.

To overcome these limitations, additional “layers” may be added on top of the base blockchain. These are known as Layer 2 solutions and include technologies like the Lightning Network for Bitcoin and Optimism or zk-Sync for Ethereum. They are designed to process transactions off-chain before recording the final state to the Layer 1 blockchain, thus enhancing the system’s scalability.