What are layer-2 coins?

What Is a Layer-1 Blockchain? A layer-1 blockchain is a set of solutions that improve the base protocol itself to make the overall system a lot more scalable . There are two most common layer-1 solutions, and these are the consensus protocol changes as well as sharding.

Layer-2 blockchains are third-party protocols operating on layer-1 blockchains to help solve any of the blockchain trilemma- decentralisation, security, and scalability . They serve as add-ons for the parent blockchain. They can be sidechains, plasma chains, state channels, or rollups.

Bitcoin, Litecoin, and Ethereum, for example, are Layer-1 blockchains. Layer-1 scaling solutions augment the base layer of the blockchain protocol itself in order to improve scalability.

Several popular layer 1 cryptocurrencies including SOL, XTZ, and LUNA have enjoyed double-digit gains after a bearish month for the wider market.