Layer 1

Layer 1 refers to the base blockchain protocol, the foundational network that provides security, consensus, and settlement finality. Bitcoin and Ethereum are Layer 1 networks. All transactions ultimately settle on the Layer 1, which is the source of truth. The security properties of Layer 1 come from its consensus mechanism and the economic value securing it. Ethereum's Layer 1 is secured by hundreds of billions of dollars in staked ETH, attacking it would require acquiring a majority of that stake, which is economically impractical. The trade-off is scalability. Ethereum Layer 1 processes roughly 15 transactions per second. Bitcoin handles about 7. These constraints exist because every validator must process every transaction to maintain decentralization. Increasing throughput on Layer 1 requires trade-offs: either larger blocks that fewer nodes can process, or faster consensus that increases centralization. This trilemma, security, decentralization, scalability, is why Layer 2 solutions emerged. Rather than changing Layer 1 properties and compromising its security, faster layers are built on top that inherit Layer 1 security for final settlement.