Definition ∞ Layered architecture structures a system into distinct, hierarchical components, each performing specific functions. In blockchain and digital asset systems, this design separates core functionalities, such as transaction settlement Layer 1 from scaling solutions or application-specific operations Layer 2 and beyond. This separation permits specialized optimization at each level, enhancing scalability, security, and flexibility. It enables modular development and upgrades.
Context ∞ The scalability challenges of foundational blockchains have driven significant adoption of layered architectures, with Layer 2 solutions frequently appearing in crypto news. Debates often focus on the security assumptions and decentralization trade-offs inherent in different layering approaches, such as rollups or sidechains. Future developments aim to achieve seamless interoperability and efficient data flow between these layers, improving overall network performance and user experience.
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