Layer 1, often referred to as L1, forms the bedrock of the entire cryptocurrency ecosystem, serving as the primary network capable of independently processing and completing transactions. In this article, Coincu will delve into the details of the best Layer 1 crypto, providing a comprehensive overview of its role, importance, and impact on the blockchain space.
What is Layer 1 crypto?
At its core, Layer 1 is the foundational blockchain protocol that underpins an entire network. It functions as a distributed ledger technology (DLT) designed to securely record transactions on a public, immutable, and trustless ledger.
One of the defining characteristics of Layer 1 blockchains is their ownership of native tokens, which are used to pay transaction fees. Additionally, they serve as the infrastructure upon which other applications, protocols, and networks, including Layer 2 and decentralized applications (dApps), are constructed.
Consensus Mechanisms: Heart of the Best Layer 1 Crypto
Perhaps the most critical feature of Layer 1 is its consensus mechanism. Different blockchains employ various consensus mechanisms, each offering distinct advantages and drawbacks in terms of speed, security, and transaction throughput. These consensus mechanisms are pivotal in ensuring the integrity and reliability of the ledger.
Common consensus mechanisms found in Layer 1 blockchains include:
- Proof-of-Work (PoW): This mechanism, famously used by Bitcoin, requires network participants (miners) to solve complex mathematical puzzles to validate transactions and create new blocks. While PoW is known for its security, it consumes substantial computational power.
- Proof-of-Stake (PoS): In contrast to PoW, PoS relies on validators who are chosen to create blocks based on the amount of cryptocurrency they hold and “stake” as collateral. PoS is often viewed as a more energy-efficient alternative to PoW.
- Delegated Proof-of-Stake (DPoS): DPoS introduces a democratic element where token holders vote for delegates who are responsible for validating transactions and maintaining the network. It prioritizes efficiency and scalability.
The solution that Layer 1 provides
One solution that Layer 1 blockchains provide is the ability to achieve high levels of security and decentralization. By utilizing consensus mechanisms such as PoW or PoS, Layer 1 blockchains enable a distributed network of nodes to validate transactions and maintain the integrity of the ledger. This ensures that no single entity has control over the network, making it resistant to censorship and attacks.
Blockchain engineers work to boost the processing throughput of the blockchain by extending these Layer 1s in an effort to prepare for the potential of cryptocurrencies entering the commercial sector. As a result, developers can offer a larger user base, while customers benefit from reduced prices and quicker transactions.
Layer 1 blockchains are the cornerstone of the blockchain ecosystem, often referred to as the “core” or “foundation” of the network. They bear the crucial responsibility of maintaining the distributed ledger, validating transactions, and safeguarding the network against malicious actors. Without their robust infrastructure, the entire ecosystem would lack the necessary stability and trustworthiness.
Compare Layer 1 with Layer 2 blockchains
Layer 2, often referred to as “L2,” represents a family of solutions designed to tackle the scalability limitations inherent in Layer 1 blockchains. One of the defining characteristics of Layer 2 is that they are built atop Layer 1, inheriting the robust security and data availability of the underlying blockchain. This inheritance of security ensures that Layer 2 transactions remain reliable and trustworthy.
One of the primary objectives of Layer 2 solutions is to process a significantly higher volume of transactions than Layer 1. This increased throughput not only helps alleviate congestion but also reduces transaction fees and enhances confirmation speeds. As a result, Layer 2 solutions contribute to a more efficient and user-friendly blockchain experience.
Layer 2 solutions offer increased transaction processing capabilities, reduced costs, and accelerated confirmation speeds while building upon the security and data availability of Layer 1. In this article, we explore the significance of Layer 2 blockchains and highlight notable examples, including the Lightning Network as a Layer 2 solution for Bitcoin.
Best Layer 1 Crypto Projects
- BNB Smart Chain
- Near Protocol
- Sui Network
Bitcoin, the world’s decentralized electronic currency, has transformed the financial landscape and is also one of the best Layer 1 crypto projects. Released as open-source software, it operates beyond the control of any central authority, ushering in a new era of digital finance.
The story of Bitcoin begins in 2009 when an enigmatic figure or group using the pseudonym “Satoshi Nakamoto” introduced this revolutionary digital currency to the world. Satoshi Nakamoto’s true identity remains shrouded in mystery, adding to the intrigue surrounding Bitcoin’s origins. Still, the creation of Bitcoin marked a watershed moment in the history of electronic money and laid the groundwork for the burgeoning cryptocurrency market.
- Decentralization: Perhaps the most fundamental characteristic of Bitcoin is its decentralized nature. Unlike traditional currencies, which are subject to government control and regulation, Bitcoin operates on a decentralized network of computers.
- Open Source: Bitcoin’s software is open source, meaning that its underlying code is publicly available for anyone to inspect, modify, and contribute to.
- Limited Supply: Bitcoin’s supply is capped at 21 million coins, a design choice made by its creators. This limited supply is programmed into the protocol and ensures that Bitcoin is deflationary in nature, as there will never be more than the predetermined number of coins in circulation.
- Security: Bitcoin’s security is underpinned by its robust blockchain technology. Transactions on the Bitcoin network are cryptographically secured, making them tamper-resistant and highly secure.
- Ownership and Control: Bitcoin provides users with full ownership and control of their funds. Users are issued private keys that grant access to their Bitcoin holdings, and transactions can be made directly from user to user without the need for intermediaries.
- Global Accessibility: Bitcoin transcends geographical boundaries, offering global accessibility to anyone with an internet connection.
- Store of Value: Many proponents consider Bitcoin as a digital store of value, akin to digital gold. Its limited supply and scarcity properties have led to comparisons with precious metals, attracting investors seeking a hedge against inflation and economic uncertainty.
The 2nd position in the list of the best Layer 1 crypto projects definitely belongs to Ethereum. It is a trailblazing open-source and permissionless blockchain platform, that has revolutionized the landscape of dApps. With its extensive network of interconnected devices across the globe, Ethereum serves as a powerful supercomputer, facilitating the execution of a diverse array of decentralized applications.
- Decentralized Application Support: At its core, Ethereum is designed to be a robust ecosystem for the development and deployment of dApps. It offers developers a versatile platform to create a wide range of blockchain-based applications, from financial services and gaming to supply chain management and more.
- Smart Contracts: Ethereum introduced the concept of smart contracts, self-executing contracts with the terms of the agreement directly written into code.
- Permissionless: Ethereum is permissionless, meaning that anyone can participate in its network as a user, miner, or developer without requiring prior authorization.
- Ethereum Virtual Machine (EVM): Ethereum employs the Ethereum Virtual Machine, a decentralized, Turing-complete virtual machine that enables the execution of smart contracts and dApps.
- Decentralization: Ethereum’s decentralized network is maintained by a global community of miners and nodes.
- Interoperability: Ethereum is known for its interoperability with other blockchain networks. This interoperability fosters collaboration between different blockchain ecosystems.
Polkadot, a groundbreaking multi-chain and scalable blockchain network, has emerged as a pivotal technology in the blockchain landscape. By seamlessly connecting diverse blockchain chains, Polkadot facilitates cross-chain data exchange, optimizing the utilization of resources across the entire ecosystem.
- Interoperability: Polkadot’s primary feature is its capacity to bridge disparate blockchains, creating a network of interconnected chains.
- Heterogeneity: Polkadot embraces heterogeneity, meaning that it accommodates a diverse array of specialized parachains. Each parachain can have its unique features and consensus mechanisms, tailored to specific use cases.
- Scalability: Polkadot’s architecture is designed to address the scalability challenges faced by many blockchain networks.
- Shared Security Model: Polkadot introduces a unique approach to security called the “shared security model.”
- DOT Token: The native cryptocurrency of the Polkadot network is DOT. DOT tokens serve various functions within the ecosystem, including staking for validators, bonding parachains, and governance participation.
- Nominated Proof-of-Stake (NPoS): Polkadot employs a Nominated Proof-of-Stake consensus mechanism to secure the network. NPoS involves validators and nominators who participate in block production and validation.
- Cross-Chain Governance: Polkadot embraces decentralized governance, enabling stakeholders to propose and vote on protocol upgrades and changes. The on-chain governance system ensures that the network evolves in a transparent and community-driven manner.
Cardano, a groundbreaking proof-of-stake (PoS) blockchain platform, stands as a testament to the power of peer-reviewed research and evidence-based development. By combining cutting-edge technologies, Cardano offers unmatched security and sustainability to decentralized applications, systems, and societies.
- Ouroboros Consensus Protocol: Cardano’s PoS system is built on the Ouroboros consensus protocol, a meticulously designed and academically verified algorithm.
- Layered Architecture: Cardano features a layered architecture that separates the settlement layer (where ADA transactions occur) from the computation layer (where smart contracts run).
- Multi-Asset Support: Cardano enables the creation and management of custom tokens and assets, fostering interoperability within the ecosystem.
- Treasury and Governance: Cardano features a treasury system, where a portion of transaction fees is allocated to fund future development and improvements.
- Smart Contracts and dApps: Cardano’s smart contract capabilities enable the development of decentralized applications (dApps) across various sectors, including finance, supply chain, and healthcare.
BNB Smart Chain
BNB Smart Chain, a pioneering addition to the BNB Beacon Chain ecosystem, represents a significant stride in bringing programmability and interoperability to the Binance Smart Chain (BNB). The reason it is on the list of the best Layer 1 crypto projects is because this blockchain is backed by Binance, a giant in the crypto industry.
Leveraging a unique Proof of Staked Authority (PoSA) consensus mechanism and a limited set of validators, BNB Smart Chain is designed to support rapid block times and reduce transaction fees.
- Proof of Staked Authority (PoSA): BNB Smart Chain relies on a PoSA consensus mechanism, a variant of PoS. This consensus model combines the authority of staked validators with the efficiency of PoS, enabling faster transaction validation and greater scalability.
- Limited Validator Set: The BNB Smart Chain operates with a system of 50 validators. These validators are carefully selected, and they play a pivotal role in block production and network security.
- Validator Selection: Validators are chosen based on their bond amount, with the most bonded validator candidates gaining the privilege of becoming validators.
- Double-Sign Detection: BNB Smart Chain incorporates a double-sign detection mechanism to prevent validators from signing conflicting transactions.
- Malicious Vote Detection: The platform employs advanced malicious vote detection algorithms to identify and penalize validators engaging in harmful activities.
- Slashing Logic: BNB Smart Chain includes slashing logic, a mechanism that penalizes validators for misbehavior or network disruptions.
As it was developed to compete with other top Layer 1 crypto projects like Solana, Near Protocol, Mina Protocol, and others, Aptos is a recent blockchain that is considered to be among the finest. Nonetheless, Aptos continues to use monolithic blockchain, despite a progressive movement in the industry that views modular blockchain as the new shape for the future.
Aptos enables developers to create Protocols and DApps on its platform for a variety of sectors, including DeFi, NFT, gaming, etc.
- High Transaction Throughput and Low Costs: Aptos leverages a parallel execution engine called Block-STM, enabling the network to process over 130,000 transactions per second.
- Simultaneous Transaction Processing: Aptos differs from many other blockchains by processing all transactions simultaneously, without being hampered by a single failed transaction.
- Streamlined Execution: Aptos’ smart contract execution model focuses on cloud infrastructure as a scalable and cost-efficient platform for building widely-used applications.
- DeFi Integration: Aptos actively encourages the development of DeFi projects on its blockchain. With over 30 DeFi projects already in its ecosystem, it offers a diverse range of decentralized exchanges, lending protocols, and liquid staking solutions.
Ripple, a blockchain-based digital payment network and protocol, has carved a distinct niche in the world of digital finance. Driven by its native cryptocurrency, XRP, Ripple has emerged as a formidable contender in the realm of payment settlement, asset exchange, and remittance systems.
Similar to the SWIFT system for international money and security transfers used by banks and financial intermediaries trading across currencies, Ripple’s primary emphasis is as a payment settlement, asset exchange, and remittance system. This is what makes it among the best Layer 1 crypto projects.
- Consensus Without Mining: Ripple departs from the traditional blockchain mining approach and employs a consensus mechanism. Rapid Transaction Confirmation: Ripple boasts transaction confirmation times that are measured in seconds, a stark contrast to the longer confirmation times associated with some other blockchain networks like Bitcoin.
- Minimal Transaction Costs: The cost of executing transactions on the Ripple network is significantly lower compared to networks like Bitcoin. Energy Efficiency: Ripple’s consensus mechanism consumes significantly less energy than the energy-intensive PoW mechanism used by Bitcoin.
- Financial Institution Focus: Ripple primarily positions itself as a payment settlement and remittance system designed for financial institutions.
- Individual Investor Speculation: While Ripple’s primary focus is on financial institutions, individual investors can also participate in the Ripple ecosystem by speculating on the price of XRP.
NEAR Protocol, a decentralized application (dApp) platform, is quickly gaining attention as a formidable competitor to Ethereum. With a strong emphasis on developer and user friendliness, NEAR offers a unique ecosystem for blockchain enthusiasts.
The native token of this platform, aptly named “NEAR,” serves multiple purposes, primarily as a means to cover transaction fees and storage costs on the NEAR cryptocurrency platform. Thanks to that, it is also considered one of the best potential Layer 1 crypto projects.
- Carbon Neutrality: In a world where blockchain’s carbon footprint often raises concerns, NEAR stands as a beacon of responsibility. The platform has undergone a rigorous carbon audit conducted by South Pole, a renowned climate solutions provider.
- High Speed and Throughput: NEAR transactions achieve finality within a mere one-second timeframe, outpacing Ethereum’s 14-second and Bitcoin’s 10-minute confirmation times.
- Low Fees: NEAR prioritizes accessibility by maintaining minimal transaction fees.
- Interoperability: This interoperability is made possible through integrations like the Aurora EVM and the Octopus Network, ensuring frictionless cross-chain transactions.
- Human-Readable Names: NEAR simplifies user experiences by allowing the creation of easily memorable account IDs.
Sui Network is a PoS-powered Layer 1 blockchain with a mission to redefine transaction settlement and scalability. While offering rapid settlement and remarkable throughput, Sui also sets the stage for a new era of latency-sensitive decentralized applications. Developers can harness its capabilities to usher in a wave of next-generation Web3 projects poised to serve a burgeoning community of Web3 users.
- Parallel Execution: Thanks to this parallel transaction execution system, Sui has achieved an astonishing throughput of up to 120,000 transactions per second (TPS).
- Stable Gas Fees with Epochs: Sui introduces stability into the equation through the concept of “epochs.” Sui operates in sequences of 24-hour epochs, each governed by a committee of validators.
- Empowering Users through Delegation and Security: Sui blockchain places great emphasis on user empowerment and network security. Users have the option to delegate their stakes to validators, thus increasing their voting power and receiving a share of the network’s fees.
Avalanche, an open-source platform, is revolutionizing the world of decentralized applications (DApps) with its unique and highly scalable ecosystem. Unlike other blockchain networks, Avalanche offers an interoperable and decentralized environment that has caught the attention of developers and crypto enthusiasts worldwide.
With a groundbreaking consensus mechanism, Avalanche is positioned as the first ecosystem capable of accommodating the scale of global finance while delivering near-instant transaction finality. This is also one of the best Layer 1 crypto projects with long-term development potential.
- Sub-chains: Serve specific purposes in the Avalanche ecosystem, contributing to its overall functionality.
- Customize Blockchain Launches Using Subnets: Developers can create virtual machines and dictate precisely how the blockchain should operate.
- AVAX staking: The staking rewards can reach up to 11%, and validators have the flexibility to set their fees for accepting delegations to their nodes.
- Mint ERC-20 Tokens: Users can create ERC-20 tokens and mint them to any address on the Avalanche network.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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