A Layer 1 is the base blockchain that settles its own transactions, runs its own consensus, and secures its own ledger without depending on another chain. Bitcoin, Ethereum, Solana, Avalanche, and Cardano are all Layer 1 networks. The term contrasts with Layer 2 protocols, which post proofs back to Layer 1 instead of running their own consensus.
Key Takeaways
- A Layer 1 settles and secures transactions on its own ledger, with consensus, execution, and data availability handled by the base chain itself.
- Bitcoin’s base layer sustains roughly 4 to 7 transactions per second, while Ethereum’s base layer sustains between 12 and 20 transactions per second in practice.
- Visa’s VisaNet is capable of handling more than 65,000 transaction messages per second, which shows why Layer 1s trade throughput for decentralisation.
- CoinGecko tracks more than 200 Layer 1 cryptocurrencies, with Bitcoin and Ethereum holding roughly two-thirds of the category market cap.
- Ethereum reduced its energy consumption by an estimated 99.95% after switching off proof-of-work consensus in September 2022.
How Does a Layer 1 Work?
A Layer 1 blockchain combines three jobs that every base chain has to perform on its own: consensus (agreeing on the order of blocks), execution (running transactions and updating state), and data availability (publishing block contents so anyone can verify them). Think of the Layer 1 as the highway itself, the asphalt, lane markings, and traffic laws, not the on-ramps or express lanes bolted on top.
1. Block production and consensus
The network’s validators or miners take turns proposing blocks on a fixed schedule. Bitcoin produces a new block on average every 10 minutes, with each block capped at roughly 4 megabytes of effective data after the SegWit witness discount. Ethereum picks a validator every 12 seconds. Bitcoin’s proof-of-work design is essentially one-CPU-one-vote, with the majority decision represented by the longest chain that has the greatest proof-of-work effort invested in it.
2. Transaction execution and gas
Every transaction runs against the chain’s state. Ethereum targets 15 million gas per block (up to a 30 million gas limit), and simple transfers use 21,000 gas, so a target block fits about 700 simple transfers. Compute-heavy contract calls burn more gas and crowd out cheap transfers, which is why base-layer throughput stays well below payment-network capacity.
3. Data availability and finality
Full nodes download and replay every block, so the state of the chain is reproducible from genesis. Finality varies by consensus: Bitcoin treats a block as “safely final” after roughly six confirmations, while Ethereum’s proof-of-stake design finalises blocks after two epochs (about 13 minutes).
| Layer 1 | Consensus | Block time | Typical base-layer TPS | Finality |
| Bitcoin | Proof of Work | ~10 minutes | 4-7 | ~60 minutes (6 confirmations) |
| Ethereum | Proof of Stake | ~12 seconds | 12-20 | ~13 minutes (2 epochs) |
| Solana | Proof of History + PoS | ~400 milliseconds | 2,500-4,500 observed | ~12.8 seconds |
| Avalanche (C-Chain) | Snowman (BFT) | ~2 seconds | ~100-500 observed | ~1-2 seconds |
| Cardano | Ouroboros PoS | ~20 seconds | ~10-50 | Probabilistic |
Sources: bitcoin.org developer docs, ethereum.org developer docs, Solana Foundation docs
Why Does Layer 1 Matter?
Every higher-layer product, a DeFi lender, a stablecoin, a rollup, inherits the security and decentralisation of the Layer 1 it settles on. If the base chain is easy to attack, the applications stacked on it are easy to attack, too. The scalability trilemma, articulated by Vitalik Buterin, argues that a blockchain using only simple techniques can optimise for at most two of three properties: scalability, decentralisation, and security. That trade-off is the single most important thing to understand about any Layer 1.
Energy footprint is a separate trilemma axis that rarely shows up on slide decks but matters for regulators. Cambridge’s CBECI dashboard currently estimates the Bitcoin network’s annualised electricity consumption at roughly 150 TWh per year, about 0.5% of total global electricity generation. Ethereum’s Merge, which switched consensus from proof of work to proof of stake on September 15, 2022, cut the network’s annual energy use to about 2.6 megawatt hours, down from roughly 23 million megawatt hours before the upgrade. Solana, a newer proof-of-stake chain, reports annualised network consumption of about 4,851.9 megawatt hours, with a single transaction drawing roughly the energy of two Google searches. Across CoinLaw’s 300-plus Bitcoin and Layer-1 cluster, the pattern is consistent: chains that chase throughput usually give up validator count and hardware accessibility in the process, and readers should weigh that trade-off before treating TPS headlines as a pure win.
Advantages, Trade-offs, and Risks
A Layer 1 does work that no application chain, rollup, or sidechain can replicate on its own, but the design choices that make one chain decentralised make another chain slow.
Advantages
- Trustless settlement: Bitcoin’s original design target was an electronic payment system based on cryptographic proof instead of trust, allowing two parties to transact directly without a trusted third party.
- Open access: any actor that meets the hardware requirements can run a full node, validate blocks, and hold a copy of the ledger, with no permission required.
- Censorship resistance: a well-decentralised L1 cannot be shut off by any single government or company, because no single entity controls block production.
- Composability: smart-contract L1s let protocols call each other atomically, which is why DeFi lending, DEX trading, and stablecoins cluster on the same base chains.
Trade-offs and Risks
- Low base-layer throughput: even Ethereum‘s current design sustains less than 1% of Visa’s per-second capacity on its base layer.
- Hardware cost rises with TPS: high-throughput L1s require much more powerful validator hardware, which raises the barrier to running a node and reduces the number of independent operators.
- Validator concentration: Solana has approximately 1,500 validators distributed globally, far fewer than Ethereum’s validator set, which concentrates staking power and increases coordination risk.
- 51% attack risk on smaller L1s: a chain with low hashrate or low staked value can be reorganised by a single attacker, which is how Ethereum Classic and Bitcoin Gold were hit.
- Chain splits and governance disputes: hard forks like the 2016 Ethereum/Ethereum Classic split show that an L1 is ultimately a social system, not just a protocol.
Layer 1 vs Layer 2
Layer 1 and Layer 2 sit in a parent-child relationship. The Layer 1 runs consensus and settles finality; the Layer 2 processes transactions off-chain and periodically posts proofs or state updates back to the L1. A rollup like Arbitrum or Optimism is a Layer 2 because it inherits Ethereum’s security rather than running its own.
| Property | Layer 1 | Layer 2 |
| Runs its own consensus | Yes | No (inherits L1 consensus) |
| Settles own transactions | Yes | Settles on the L1 |
| Typical throughput | Tens to low thousands TPS | Thousands to tens of thousands TPS |
| Security source | Native validators/miners | Borrowed from the underlying L1 |
| Fees | Paid to L1 validators | Paid to L2 sequencer plus an L1 data-availability cost |
Sources: Vitalik Buterin, ethereum.org developer docs
The payoff: L1s offer stronger guarantees but less throughput; L2s offer higher throughput but only as much security as the L1 they post to. This is why the industry has converged on a “rollup-centric roadmap” where L1s specialise in settlement and data availability, and L2s handle high-volume execution.
Examples of Major Layer 1 Blockchains
Five Layer 1s currently dominate user activity, total value locked, and developer mindshare: Bitcoin, Ethereum, Solana, Avalanche, and Cardano. CoinGecko’s Layer 1 category includes independent base-layer chains such as Bitcoin, Ethereum, Solana, BNB Chain, TRON, Cardano, Avalanche, and Near. Each sits on a different point of the trilemma triangle.
The table below is a CoinLaw trilemma heatmap. Each axis is scored 1-5 based on primary-source data captured in this research: decentralisation from validator or full-node count and hardware cost, security from economic cost to attack (hashrate for PoW, staked value for PoS), and scalability from observed base-layer throughput.
| Layer 1 | Launched | Consensus | Decentralisation | Security | Scalability |
| Bitcoin | Jan 2009 | Proof of Work | 5/5 | 5/5 | 1/5 |
| Ethereum | Jul 2015 | Proof of Stake | 4/5 | 5/5 | 2/5 |
| Solana | Mar 2020 | PoH + PoS | 2/5 | 3/5 | 5/5 |
| Avalanche | Sep 2020 | Snowman (BFT) | 3/5 | 3/5 | 4/5 |
| Cardano | Sep 2017 | Ouroboros PoS | 4/5 | 4/5 | 2/5 |
Sources: bitcoin.org, ethereum.org, Solana Foundation, Cardano Foundation, Ava Labs
A few data anchors behind those scores: Ethereum’s consensus layer has over 1 million active validators, with more than 33 million ETH staked, roughly 27% of total ETH supply, which is why its decentralisation and security both rank high. Solana reports a theoretical peak of 65,000 transactions per second, with observed mainnet throughput typically between 2,500 and 4,500 TPS, which is why its scalability score leads the table while decentralisation lags. Ethereum launched its Frontier mainnet on July 30, 2015, following Vitalik Buterin’s 2013 proposal and the Yellow Paper formalisation in April 2014, and that history (plus a PoW phase through the Merge) is why the chain has deep validator distribution.
Real-World Applications
Base-layer chains are where the highest-value and most sensitive activity settles. Applications pick an L1 for the security, liquidity, and regulatory profile of the underlying ledger.
Settlement for DeFi
Layer 1s host the smart contracts that power decentralised exchanges, lending protocols, and yield strategies. Readers tracking sector-level numbers can follow our DeFi market statistics coverage for total value locked, protocol counts, and yield trends.
Stablecoin issuance and rails
Most dollar stablecoins (USDT, USDC) are issued on several Layer 1s at once. The base chain determines settlement finality, which matters for corporate treasurers and exchanges clearing large volumes.
Institutional custody and tokenised assets
Regulated custodians, tokenisation platforms, and spot ETF providers interact directly with L1s for custody and proof of reserves. Fee behaviour on these chains, tracked in depth in our Ethereum gas fee history coverage, directly affects institutional operating costs.
Frequently Asked Questions (FAQs)
A Layer 1 blockchain is the base chain that runs its own consensus, settles its own transactions, and secures its own ledger without relying on another network. The Layer 1 category tracked by CoinGecko includes more than 200 such chains, with Bitcoin, Ethereum, Solana, BNB Chain, TRON, Cardano, Avalanche, and Near among the largest by market capitalisation.
A Layer 1 settles transactions on its own ledger; a Layer 2 processes transactions off-chain and posts proofs or state data back to a Layer 1. Arbitrum and Optimism are Layer 2s because they inherit Ethereum’s security rather than running their own validators. The Layer 1 absorbs final settlement; the Layer 2 absorbs throughput.
Bitcoin is widely considered the most secure Layer 1 by economic cost to attack. Cambridge’s CBECI estimates Bitcoin’s annualised electricity consumption at roughly 150 TWh per year, about 0.5% of global electricity, and that hashrate translates directly into attack cost. Bitcoin’s design, with an average 10-minute block time and proof-of-work consensus, prioritises settlement security over throughput. Ethereum is a close second on economic security via its staked ETH base.
CoinGecko’s Layer 1 (L1) category currently tracks more than 200 Layer 1 cryptocurrencies, with a combined market capitalisation measured in trillions of US dollars. Only a few dozen carry meaningful liquidity, active-address counts, and developer activity. The rest are long-tail chains, forks, or early-stage networks with limited use.
Conclusion
A Layer 1 is the base chain that settles its own transactions, enforces its own consensus, and carries the security of everything built on top of it. The scalability trilemma forces every Layer 1 to pick a point on the triangle: Bitcoin optimises for decentralisation and security at the cost of throughput, Solana optimises for throughput at the cost of validator count, and Ethereum sits in the middle and pushes scaling to Layer 2 rollups. The modular trend across crypto infrastructure today, rollup-centric L1s, dedicated data-availability layers, and app-specific rollups, is the industry’s honest admission that no single chain will win on all three axes at once. Track our crypto adoption data to see which trade-offs users are actually rewarding.
