Close Menu
  • Coins
    • Bitcoin
    • Ethereum
    • Altcoins
    • NFT
  • Blockchain
  • DeFi
  • Metaverse
  • Regulation
  • Other
    • Exchanges
    • ICO
    • GameFi
    • Mining
    • Legal
  • MarketCap
What's Hot

What Do Today’s Inflation Figures from the U.S. Mean for Bitcoin? Bullish or Bearish?

27/09/2026

Stablecoin cross-border flows surge 78%, defying crypto bear market

27/09/2026

Ripple CEO, Wall Street Heavyweights Head to Swell 2026: Agenda Revealed

27/09/2026
Facebook X (Twitter) Instagram
  • Back to NBTC homepage
  • Privacy Policy
  • Contact
X (Twitter) Telegram Facebook LinkedIn RSS
NBTC News
  • Coins
    1. Bitcoin
    2. Ethereum
    3. Altcoins
    4. NFT
    5. View All

    What Do Today’s Inflation Figures from the U.S. Mean for Bitcoin? Bullish or Bearish?

    27/09/2026

    Smarter Web to become UK’s first BTC firm to issue preferred shares

    27/09/2026

    Bitcoin Hit by Another Blockchain Reorg

    27/09/2026

    What Will Happen to the Price of Bitcoin If the Fed Raises Interest Rates Next Week?

    27/09/2026

    Where is Ethereum Heading on Exchanges? Supply Has Fallen to a Record Low! What Does This Mean for the ETH Price?

    27/09/2026

    Will Ethereum price rally as ETFs post 5 days of inflows?

    27/09/2026

    Here’s why Ethereum may crash to $2,500 despite $746M in ETF inflows

    27/09/2026

    Ethereum Draft Proposes Compliance Controls for Confidential RWA Tokens

    27/09/2026

    Ripple CEO, Wall Street Heavyweights Head to Swell 2026: Agenda Revealed

    27/09/2026

    Zcash (ZEC) 17% Pump Sends $1 Million Short Into Full Liquidation

    27/09/2026

    Whale Activity in Bitcoin and Altcoins After the FED Decision! Here are the Details and the Altcoins They Traded

    27/09/2026

    Crypto trader turns $2.4K into $680,000 on this coin

    27/09/2026

    The NFT party is over and everybody now owes storage rent

    27/09/2026

    How to reclaim your rescued NFTs after legacy Magic Eden approval exploit

    26/09/2026

    NFT sales rise 57.17% to $55.5M as Ethereum leads

    26/09/2026

    Whitehats rescue $5.7 million in NFTs after Limit Break Payment Processor exploit

    25/09/2026

    What Do Today’s Inflation Figures from the U.S. Mean for Bitcoin? Bullish or Bearish?

    27/09/2026

    Stablecoin cross-border flows surge 78%, defying crypto bear market

    27/09/2026

    Ripple CEO, Wall Street Heavyweights Head to Swell 2026: Agenda Revealed

    27/09/2026

    U.S. SEC’s steadiest crypto advocate, Hester Peirce, to depart next week

    27/09/2026
  • Blockchain

    Zano Inflation Bug Forces Blockchain to Wipe an Entire Day of History

    27/09/2026

    Solana Leads DApp Revenue as Bitcoin Integration Accelerates

    27/09/2026

    Arbitrum One Becomes First Blockchain to Reach 7,000 RWAs

    27/09/2026

    Solana Leads xStocks with $502.4M in Assets Issued

    27/09/2026

    Aeroxyz to Launch on Arbitrum

    27/09/2026
  • DeFi

    Coinbase tokenized stocks go live on Aave V4 on Base

    26/09/2026

    Aave V4 adds Coinbase tokenized stocks, will AAVE price respond?

    26/09/2026

    Zest Protocol caps its bitcoin backed USDC loans demo at 0.001 BTC

    26/09/2026

    PancakeSwap Introduces Infinity Pools and Pre-Access Portal

    26/09/2026

    EU targets $54B DeFi sector as Aave slams Morpho’s vault proposal as ‘self-serving’

    26/09/2026
  • Metaverse

    Is Solana Gaming Back? Kintara Activity Fuels Renewed Optimism in Onchain MMOs

    24/06/2026

    The Sandbox launches AI game engine ‘The Sandbox Studio’ for next-generation creators

    10/06/2026

    Meta commits $13M in funding for Oversight Board through 2028

    29/05/2026

    Why Animoca’s Yat Siu says the future is 100 billion AI agents

    07/05/2026

    ‘8,000 Jobs’—Polymarket Sees Tech Layoff Surge As Meta AI Push Bites

    18/04/2026
  • Regulation

    Stablecoin cross-border flows surge 78%, defying crypto bear market

    27/09/2026

    ESMA to prioritize EU-wide AI and tokenization supervision in 2027

    27/09/2026

    Trump reveals up to $100K Strategy stock purchase in ethics filing

    27/09/2026

    Venezuela doubles its crypto economy to $39.1 billion, outpacing Latin America’s largest markets

    27/09/2026

    Meta’s AI bond just hit a record low as its stock soared

    27/09/2026
  • Other
    1. Exchanges
    2. ICO
    3. GameFi
    4. Mining
    5. Legal
    6. View All

    BitGo Launches Comprehensive Stablecoin Infrastructure

    27/09/2026

    BitMart appoints A&M to review assets and withdrawals

    27/09/2026

    UAE retailers begin accepting DDSC stablecoin payments in new pilot

    27/09/2026

    Solana’s Ecosystem Grows as MeteoraAG Adds Launchpad Support

    27/09/2026

    ICO market slows sharply with only six completions in 2026

    30/04/2026

    South Korea Poised to Lift Ban on Domestic ICOs After 7 Years

    19/12/2025

    Why 2025’s Token Boom Looks Both Familiar and Dangerous

    31/10/2025

    ICO for bitcoin yield farming chain Corn screams we’re so back

    22/01/2025

    Top 12 NFT games every player should know about in August 2026

    19/08/2026

    GameShame Studios founder details Raijin Protocol’s roadmap in NeoPod’s sixth AMA

    13/08/2026

    How BC.GAME is turning players into stakeholders

    04/08/2026

    YGG Play Shuts Down Services as Yield Guild Pivots to AI Data

    01/08/2026

    Will Kazakhstan’s new Bitcoin mining strategy evolve into an AI compute playbook?

    27/09/2026

    Bitcoin Miner Hive Escalates Swedish VAT Dispute to European Commission

    26/09/2026

    CleanSpark closes $2.276 billion senior secured notes offering

    26/09/2026

    Hut 8 Wins $140M Bid for Poolin’s Two Texas Data Centers

    24/09/2026

    U.S. SEC’s steadiest crypto advocate, Hester Peirce, to depart next week

    27/09/2026

    CFTC Sues Cash FX Over Alleged $950M Crypto-Linked Forex Scheme

    27/09/2026

    Eleanor Terrett Discusses Crypto Regulation Post-Clarity Act

    27/09/2026

    Circle Exec Slams Germany’s Proposed 50% Crypto Tax Penalty

    27/09/2026

    What Do Today’s Inflation Figures from the U.S. Mean for Bitcoin? Bullish or Bearish?

    27/09/2026

    Stablecoin cross-border flows surge 78%, defying crypto bear market

    27/09/2026

    Ripple CEO, Wall Street Heavyweights Head to Swell 2026: Agenda Revealed

    27/09/2026

    U.S. SEC’s steadiest crypto advocate, Hester Peirce, to depart next week

    27/09/2026
  • MarketCap
NBTC News
Home»Blockchain»What are Layer 3 Networks? Improving Functionality and Interoperability
Blockchain

What are Layer 3 Networks? Improving Functionality and Interoperability

NBTCBy NBTC05/07/2024No Comments5 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email


Blockchain infrastructure has evolved to incorporate layer 1 and layer 2 networks. A more recent development is the emergence of so-called “layer 3” networks.

So what are layer 3 networks, and how do they differ from layer 1 and layer 2 networks?

What is a layer 3?

To understand what layer 3 networks are, we first need to look at the layer 1 and layer 2 networks that they sit atop.

Layer 1 networks are the base layer of blockchain infrastructure, and include blockchains such as Ethereum or Bitcoin. They provide the underlying framework for a blockchain network, validating transactions and achieving consensus.

However, layer 1 networks can face scalability bottlenecks caused by throughput and transaction costs.

That’s where layer 2 networks like Arbitrum, Optimism, and Blast come in. They are networks that live on top of the layer 1 blockchain and deploy a variety of scaling solutions to help improve their efficiency. These can include bundling transactions or processing transactions off-chain.

Layer 3 networks are one of the latest developments in the blockchain space, building atop the established infrastructure of layer 1 and layer 2 blockchains.

Their primary function is to host decentralized applications (dapps) so that they can perform at optimal levels without suffering from the network congestion of the layers below it.

Layer 3s also focus on scalability and efficiency, like the layer 2s they’re built on top of—but layer 3s do so in order to promote interoperability, and to improve the performance of complex dapps.

Layer 2s vs layer 3s

Layer 2s (also known as rollups) were first introduced as a blockchain layer on top of the layer 1 Ethereum network. They were intended to address the scalability issues found on Ethereum, and for the most part, they have done a pretty decent job at it.

Where layer 2s focused on improving the scalability and efficiency of the chain they were built on top of, layer 3s are intended to address issues in user-friendliness, efficiency and functionality, and typically focus on dapps as their primary use case.

The intended function of a layer 3 network is to improve the scalability and efficiency of decentralized applications (dapps) built on top of it. They typically only house one dapp, enabling it to perform at high speeds, without the congestion found on layer 1 and layer 2 networks.

For developers, layer 3s are an environment in which they can create much more advanced dapps, using complex smart contracts that might not be feasible on layer 1 or 2 networks due to scalability and cost restrictions. They can also be customized for specific application use cases in ways that layer 2s can’t—because they don’t have the same constraints.

Layer 3s aren’t exclusive to Ethereum; other layer 1 networks such as Cosmos and its IBC protocol also provide solutions for creating layer 3s.

Examples of layer 3 networks

If you’ve spent any time on crypto social network Farcaster, you’re probably familiar with DEGEN and Degen Chain. Originally a channel on Farcaster, the Degen community launched a token on layer 2 network Base called DEGEN, primarily used to tip people on Farcaster. The token quickly grew, and soon after, the pseudo-anonymous team launched its own L3, Degen Chain.

Degen Chain was built using Arbitrum’s Orbit layer 3 architecture, but was launched on top of the Coinbase-incubated Ethereum layer 2 network Base. Its purpose is to serve as an ultra low cost environment for degens and developers alike to create fun and user-focused applications, primarily based on speculation.

Another popular layer 3 is Xai—an Arbitrum layer 3 designed for gaming applications, offering reduced fees and a level of account abstraction not available on Layer 2s.

Account abstraction is important when it comes to consumer-facing dapps like video games, in order to smooth the onboarding process for mainstream users and remove the complicated series of steps that blockchain-based products often entail.

Xai retains the core functionality of Arbitrum’s Layer 2, but utilizes optimistic rollups to handle transactions—making it cheaper and faster than the layer it’s built atop.

The future of layer 3 networks

As layer 2s continue to grow and expand in count, the demand for more sophisticated and scalable solutions is set to grow alongside them. Layer 3s create a more flexible infrastructure for dapps, allowing for features like privacy, user friendliness (via account abstraction), and interoperability across layers.

When it comes to gaming, account abstraction is crucial. Complex dapps like video games need a more flexible environment to succeed—one that retains core elements of Web3’s decentralized ethos (such as players owning their own in-game items), but also provides the additional functionality that’s needed for dapps to go from “niche crypto products” to “mainstream.”

Similarly, in regards to privacy, complex cryptographic techniques needed to create on-chain privacy become much more feasible and cost effective to implement.

Offering genuine improvements for dapps and the developers trying to build on layer 1 and layer 2 networks, layer 3s are likely to proliferate over the coming years alongside layer 2s, as developers start building more complex products that transcend the current limitations of layer 1 blockchain rails.

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
NBTC

NBTC is the editorial account for NBTC News, covering Bitcoin, Ethereum, DeFi, blockchain infrastructure, exchanges, mining, regulation and digital asset markets. The editorial team focuses on clear sourcing, timely updates and practical context for crypto readers.

Related Posts

Zano Inflation Bug Forces Blockchain to Wipe an Entire Day of History

27/09/2026

Solana Leads DApp Revenue as Bitcoin Integration Accelerates

27/09/2026

Arbitrum One Becomes First Blockchain to Reach 7,000 RWAs

27/09/2026

Solana Leads xStocks with $502.4M in Assets Issued

27/09/2026
Add A Comment

Comments are closed.

Top Posts
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Your source for the serious news. This website is crafted specifically to for crazy and hot cryptonews. Visit our main page for more tons of news.

We're social. Connect with us:

Facebook X (Twitter) LinkedIn RSS
Top Insights

What Do Today’s Inflation Figures from the U.S. Mean for Bitcoin? Bullish or Bearish?

27/09/2026

Stablecoin cross-border flows surge 78%, defying crypto bear market

27/09/2026

Ripple CEO, Wall Street Heavyweights Head to Swell 2026: Agenda Revealed

27/09/2026
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Type above and press Enter to search. Press Esc to cancel.