Layer-1 Protocol

Definition ∞ A Layer-1 Protocol is the foundational blockchain network upon which other decentralized applications and protocols are built. These are the primary blockchains like Bitcoin or Ethereum, responsible for processing and finalizing transactions directly on their own ledger. They establish the core security, decentralization, and scalability properties of the entire ecosystem. Any improvements to a Layer-1 protocol directly impact all applications operating on it.
Context ∞ The state of Layer-1 Protocols is marked by continuous innovation focused on improving scalability, security, and decentralization to accommodate increasing user demand. A key discussion involves the “blockchain trilemma,” where developers strive to optimize these three properties simultaneously, often making trade-offs. Future developments include significant upgrades like Ethereum’s transition to Proof of Stake and the emergence of new high-throughput Layer-1 networks. News frequently covers these developments, as they determine the fundamental capabilities and future direction of the digital asset space.