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2. Intermediate Course

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  1. 1. What is Layer 0 in Blockchain technology?
  2. 2. What is layer 1 in Blockchain?
  3. 3. Second layer (layer 2) - what is it? 
  4. 4. Blockchain and its layers - What is layer three in Blockchain (L3)?
  5. 5. Ethereum 2.0 - What is it? 
  6. 6. Ethereum Proof-of-Stake (PoS) - what should you know?
  7. 7. Ethereum London Hard Fork - what is it ? 
  8. 8. What is the Ethereum Name Service (ENS) and how does it work?
  9. 9. Arbitrum: Ethereum scaling solution - everything you need to know
  10. 10. Polygon 2.0 - the value layer for the Internet
  11. 11. Ethereum ERC-4337 - what is it and how does this standard work?
  12. 12. What is an ERC20 token and how is it created?
  13. 13. The ERC-721X VS ERC-721 Standard – Key Differences!
  14. 14. What is cryptocurrency burning?
  15. 15. Examples of the use of WEB3 on the blockchain
  16. 16. What is Web5? 
  17. 17. Blockchain Oracle - what are oracles? 
  18. 18. Polkadot - Decentralized blockchain and DOT cryptocurrency
  19. 19. Polkadot Parachain - Next-generation blockchain
  20. 20. Interoperability in the world of cryptocurrencies and blockchain
  21. 21. What is Blockchain sharding?
  22. 22. Mainnet versus Testnet on the Blockchain. The complete guide!
  23. 23. MINA Protocol: the lightest blockchain in the world!
  24. 24. Sustainable Blockchain - Proof of Useful Work & Flux
  25. 25. Cosmos SDK: Building the Blockchain Ecosystem
  26. 26. What is cross-chain interoperability in Blockchain technology?
  27. 27. Blockchain trilemma - explanation of the problem. What is the impact on cryptocurrency payments?
  28. 28. Non-fungible tokens and NFT exchanges
  29. 29. How to make money with NFT?
  30. 30. What is the NFT licence fee?
  31. 31. NFT Gas Fee - what is it? How can you reduce your gas fee?
  32. 32. The main differences between static NFT and dynamic NFT
  33. 33. What is minting an NFT?
  34. 34. What are NFT Ordinals? A guide to Bitcoin NFT.
  35. 35. What is KnowOrigin NFT, and how does it work?
  36. 36. ERC-6551 - the new NFT standard. What does it bring to the non-exchangeable token sector?
  37. 37. What is NFT Lending all about? An innovative solution in the world of cryptocurrencies!
  38. 38. The Metaverse – a new virtual world
  39. 39. Metaverse – TOP 15 virtual reality projects
  40. 40. Technical analysis – is it worth using?
  41. 41. Trading order types: stop loss, trailing stop loss, LIMIT
  42. 42. Market Cap versus Fully Diluted Market Cap - the most important differences you should know!
  43. 43. Set up of Stop Loss and Take Profit orders
  44. 44. What are DeFi liquidity pools?
  45. 45. Real Yield in DeFi - what is this trend? What does it consist of?
  46. 46. Vampire Attacks in Decentralized Finance (DeFi): Explanation and Examples
  47. 47. What are wrapped tokens 
  48. 48. What are security tokens?
  49. 49. What are Social Tokens? 
  50. 50. Liquidity Provider Tokens (LPs). What are they, and why are they so important?
  51. 51. What is the Lightning Network, and how does it work?
  52. 52. What is Play-to-Earn (P2E) and how does it work?
  53. 53. Cryptocurrency steps - What is move to earn M2E?
  54. 54. Segregated Witness - what is Segwit Bitcoin all about?
  55. 55. What are Decentralized Cryptocurrency DEX Exchanges?
  56. 56. What is Curve Finance?
  57. 57. What is GameFi and how does it work?
  58. 58. What is Proof of Reserves (PoR)? How does it work?
  59. 59. DAO Investment: A revolution in the world of finance and investment
  60. 60. What is MakerDAO and DAI Stablecoin?
  61. 61. What is the SubDAO protocol, and how does it work?
  62. 62. How to Create Your Own Decentralized Autonomous Organization (DAO)?
  63. 63. Atomic Swap: What is an atomic swap, and how does it work with cryptocurrencies?
  64. 64. What Is Cryptocurrency Vesting? What Are Its Advantages?
  65. 65. What Is the Metaplex Candy Machine Protocol? How Does It Work?
  66. 66. What Is the BNB Greenfield Ecosystem?
  67. 67. What Is Slashing in Cryptocurrencies?
  68. 68. Royalties – What Are They? How Does This Type of Licensing Fee Work?
  69. 69. What is TradFi? The importance for cryptocurrencies!
  70. 70. What is the Real World Asset (RWA) trend in cryptocurrencies? Explanation and examples!
  71. 71. Pyth Network: a powerful oracle harnessing the power of Solana!
  72. 72. What are stables in the world of cryptocurrencies?
  73. 73. What Is Binance Oracle?
  74. 74. Shibarium: A new era in the Shiba Inu ecosystem?
  75. 75. What is an ETF? How will an exchange-traded fund on bitcoin work?
  76. 76. Symmetric and asymmetric encryption - key cryptography techniques!
  77. 77. Hedging in cryptocurrencies - great portfolio protection against risk!
  78. 78. How to create your own cryptocurrency? 
  79. 79. What is a Dusting Attack in cryptocurrencies? How to protect against it?
  80. 80. What is a Black Swan?
2. Intermediate Course 4. Blockchain and its layers – What is layer three in Blockchain (L3)?
Lesson 4 of 80
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4. Blockchain and its layers – What is layer three in Blockchain (L3)?

Blockchain, due to the lack of a centralized authority, needs to be even more secure. At the same time – scalable to cope with the growing number of users, data, and transactions. In today’s lesson, we will discuss solutions and determine exactly what is the Layer 3 (L3)in Blockchain, which are supposed to provide greater scalability and maintain the highest level of protocol security.

What is layer three of blockchain technology?

These are basically unique solutions that enhance blockchain networks with cross-chain capabilities. Then blockchain achieves full interoperability. Imagine layer three protocols as a simplification of all layers. Someone, like a messenger between layer 1 and layer 2.

As a rule, Layer 1 and Layer 2 solutions are closely related. So creating interoperability protocols on another layer is a super idea. As a result, Layer 3 solutions were created.

Here it should be emphasized that the entire Tier 3 system does not rely on any custodian or intermediary.

Why does blockchain architecture need a third layer?

1. Blockchain trilemma

The three main elements of blockchain are decentralization, security, and stability. In practice, almost every blockchain-based project must sacrifice one of these elements to achieve better performance.

Let’s look at examples. Ethereum and Bitcoin focus mainly on security and decentralization. Solana – on stability and security.

The scalability trilemma is difficult to solve, relying wholly on layer 1. Therefore, a multilayer structure is better and achieves stability, security, and decentralization.

2. Blockchain interoperability

The multi-level structure of blockchain technology solves perfectly the problem of scalability. Recall – blockchain interoperability is cross-chain functionality. This means that two different blockchain networks with the same ecosystems can communicate with each other. With the others – no.

Layer 3 solutions of blockchain technology become a necessity when you think about popular DeFi applications. Aave and Serum run on different networks. As a result – access to services on these platforms are not possible for everyone. As a result, the lack of interoperability between blockchain, is the main reason for the introduction of Layer 3 solutions.

Examples of Layer 3 protocols

Many new projects using Layer 3 have emerged with protocols using interoperability. Here are some examples.

Interledger

Interledger or ILP by Ripple is one of the most popular protocols using Layer 3 solutions that exists on the market.

It features a multi-layered ecosystem with three distinct layers that have separate functions. Layer 1 acts as the blockchain’s highway ledger, while Layer 2 contains the local area network or LAN. Layer 3, on the other hand, provides faster and more profitable transactions on the blockchain Ripple.

IBC

Otherwise, known as the Inter-Blockchain Communication Protocol of Cosmos. The Layer 1 protocol is the well-known Tendermint Core. Cosmos SDK facilitates the functionality of Layer 2. Layer 3, or IBC protocol, helps applications communicate reliably and securely between modules of the blockchain. It transmits data, is responsible for authentication and works across multiple blockchain networks.

Quant

This is a great solution for blockchain networks of different companies. It helps connect public and private chains. It uses Overledger DLT to facilitate interoperability. Furthermore, it’s also a great Layer 3 solution.

Vitalik Buterin and his vision for Tier 3 solutions

The co-founder of Ethereum has his specific vision for Layer 3 solutions. Layer 2, and in fact its solutions based on Ethereum, focus on scaling the network.

Vitalik’s idea is for the layer 3 counterparts to have a different purpose and provide functionality to the protocols.  According to him, in the near future, this is what Layer 3, which is being worked on extensively, will be used for.

According to the co-founder of Ethereum, the emergence of a third layer in blockchain technology only makes sense if it provides much more functionality than the available layer 2.

Another suggestion for Layer 3 operations would be to scale down applications that do not want to use the Ethereum Virtual Machine (EVM)in their operations to perform complex calculations.

The Ethereum co-founder’s ideas are great, but nevertheless it is worth rethinking whether Layer 3 protocols will actually be more efficient than the proposed Layer 2 models.

Summary

Blockchain’s Layer 3 can change the way they operate in the market. The goal of Layer 3 is to achieve full interoperability, using uncomplicated and compatible blockchain systems. Layer 3 brings solutions, mass adoption of cryptocurrencies and blockchain.