Blockchain works great as it’s a single network with a shared ledger and everyone relying on the same source of truth. It’s decentralized, secure, and reliable.
However, as these chains became popular and started pushing thousands of transactions, confirmations started taking longer and transaction fees shot up. Developers tried to solve this by using larger blocks, higher throughput, and tighter timing. It worked for a while, but it also added strain to hardware and introduced decentralization trade-offs.
This led developers to rethink the underlying architecture and explore different blockchain scalability solutions. A layered or modular approach is what’s now allowing networks to grow without sacrificing safety.
Why scaling a single blockchain layer gets risky
Running everything on a single blockchain is clean and straightforward. The single network executes transactions, stores all data, and confirms transactions. It’s straightforward and secure, and it’s actually how the first major blockchains, Bitcoin and Ethereum, worked.
However, when demand increased significantly in late 2017, there was a lot of congestion and super-high fees, threatening the actual usability of the blockchains.
Scaling the network meant asking more from the participating machines as it needed bigger blocks and higher throughput, but that narrows it to just a few well-resourced operators. It threatens the decentralization that makes the system resilient.
Developers needed to come up with solutions that still protect decentralization and security to solve what became known as the blockchain scalability trilemma.
What layered execution means
Layered execution involves switching from the unified approach of handling everything within a single network. Instead of the base chain taking care of everything, roles like executing transactions, storing data, and settling results are split across different layers.
A new layer starts running the transactions, and another makes data available. The base layer, the original one, is now left to deal with security and final settlement only.
This modular approach makes everything more organized and easier to scale while still maintaining blockchain security and decentralization.
How rollups and execution layers reduce pressure on the main chain
The layered blockchain approach relies on technologies like rollups, sharding, and sidechains to reduce the workload on the main network.
Processing transactions off-chain
Instead of application execution taking place on the main chain, it’s given to a different one that’s interconnected. This chain is known as a Layer 2 chain, and it takes many transactions and processes them together. This way, the part of the transaction is super-fast, and the chain itself can be easily scaled without affecting the base chain.
Submitting summaries or proofs back to the main chain
After the processing, Layer 2 chains now send the transaction results (grouped together) to the main network. It validates all of them before they can be written to the blockchain, but the verification method varies depending on the Layer 2 chain.
Some send summaries of the transactions, sort of like submitting the final receipt instead of showing everything you did to create it. Transactions are then subjected to a challenge period of about 7 days. If there’s no dispute, finality is achieved.
Other networks use zero-knowledge (ZK) rollups, where they send cryptographic proof to show the validity of transactions.
Keeping security anchored to the main network
Layer 2 networks are responsible for speed and efficiency in a modular architecture, but trust still comes from the base layer. It remains the single source of truth, and the transactions from other layers only permanently join the main chain when they are verified.
This means that off-chain transactions still inherit the protections provided by popular base chains like Bitcoin and Ethereum. This contains the risk of introducing new chains and makes it easier to scale without sacrificing decentralization.
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