Understanding the architecture of blockchain technology is essential for grasping how digital assets and information traverse the diverse landscape of distributed ledgers.

At their core, blockchain layers are foundational elements that categorize the functionalities and scalability solutions within the network.

Layer 1 blockchains, also known as the base layer, are the underlying protocols of decentralized networks. These include prominent blockchains like Bitcoin and Ethereum — responsible for the network's security and consensus mechanisms.

Layer 2 solutions were conceptualized to address the limitations in scalability and transaction throughput that Layer 1 blockchains face. Operating atop the base layer, these solutions aim to enhance the network's capacity without …