In 2021, Ethereum fees were as high as $50 per transfer. Today it’s less than $0.01. How come? It’s because of the blockchain’s multiple layers. Layer 0 connects networks, Layer 2 speeds up transactions, and Layer 4 makes crypto convenient even for your grandmother. Let’s break down how it works - without the complicated terms.
Blockchain is not a road, but a multi-layered interchange
Imagine that blockchain is a multi-layer cake. Layer 1 (Bitcoin, Ethereum) is the sponge, the base of the flavor. Layer 2 (Arbitrum, Lightning Network) is the cream that makes the cake more tender. Layer 0 (Polkadot, Cosmos) is a plate on which you can put several cakes at once. And Layer 3 and 4 are the decorations and the fork, without which it is inconvenient to eat.
But metaphors are good, but facts are better. Why can’t Bitcoin process more than 7 transactions per second? How did Ethereum reduce commissions 100 times? And why do we need “add-ons” like The Graph? Let’s look at it in order.
Layer 0: Why can’t blockchains become friends without it?
The problem
Blockchains live in isolation.
Transferring tokens from Ethereum to Solana used to be nearly impossible - like sending a letter from one universe to another.
Solution
Layer 0 is the “internet for blockchains”.
It provides
- Cross-chain interoperability (bridges like Axelar).
- Shared security (Polkadot shares validators with parachains).
- Development flexibility (Cosmos SDK allows you to build your blockchain in days).
Examples
- Polkadot is “LEGO for blockchains”: projects rent slots to work in its ecosystem.
- Cosmos - “Google Translator” for networks: its IBC protocol connects 50+ blockchains.
- Avalanche Subnets - “private islands” for enterprise solutions.
The future: Layer 0 is blurring boundaries.
Soon we will see a single space where tokens and data flow freely between networks.
Layer 1: why are Bitcoin and Ethereum just the beginning?
The problem
The underlying blockchains are slow and expensive. Ethereum cost $50 per USDT transfer before moving to PoS.
Solution
Layer 1 is the foundation
Its main challenges
- Security (PoW in Bitcoin, PoS in Ethereum).
- Decentralization (thousands of nodes).
- Execution of smart contracts (EVM in Ethereum, Solana VM).
Examples
- Bitcoin - “digital gold” where immutability is more important than speed.
- Ethereum is the “world computer”, the leader of DeFi and NFT.
- Solana - “speed train”, 50,000 TPS thanks to parallel transactions.
Blockchain Trilemma
It is impossible to achieve decentralization, security and scalability at the same time. That’s why Layer 2 came into being.
Layer 2: how did Ethereum learn to “breathe”?
The problem
Core networks are overloaded. $50 commissions are killing micropayments.
Solution
Layer 2 processes transactions “side-by-side” with L1, then writes the total to the main blockchain.
L2 types
- Rollups (Optimism, Arbitrum) - “batch transfers”, reduce fees by a factor of 10.
- ZK-Rollups (zkSync, StarkNet) - “the magic of crypto”, privacy + speed.
- Sidechains (Polygon PoS) - “separate roads”, faster but less secure.
Example
- Lightning Network for Bitcoin allows you to pay for coffee without long confirmations.
Bottom line
L2s are the “ambulance” for scaling. Without them, DeFi and gaming would not be possible.
Layer 3: Why does blockchain need a “special forces”?
Issue
Even L2s aren’t ideal for narrow tasks - like gaming or private transactions.
Solution
Layer 3 is all about customization:
- dApps (Uniswap, Aave) - run on top of L1/L2.
- Infrastructure (The Graph, Chainlink) - “data delivery services”.
- Modular blockchains (Celestia) - allow you to assemble the network like a constructor.
Example
- Immutable X - L3 for NFT games with zero commissions.
Trend
In the future, L3s will become “virtual worlds” with unique rules.
Layer 4: how did MetaMask and Uniswap conquer the world?
The problem
Crypto is complicated. The average user won’t write code to translate tokens.
Solution
Layer 4 is about interfaces:
- Wallets (MetaMask, Phantom).
- Exchanges (Uniswap, dYdX).
- Web3 applications (Brave, STEPN).
Chip
Without L4, cryptocurrency would remain the domain of geeks.
Conclusion: the future is for the “layer cake”
Blockchain is evolving
🔹 Layer 0 connects networks.
🔹 Layer 1 ensures security.
🔹 Layer 2 speeds up transactions.
🔹 Layer 3 adds specialization.
🔹 Layer 4 makes cryptocurrency accessible.
What’s next. The emergence of Layer 5 (quantum stable solutions?) or a complete merger of layers. One thing is clear: layering is not a temporary phenomenon, but the foundation of Web3.
