Protocol Layering is an architectural approach in blockchain design where different functionalities are separated into distinct, interconnected layers. This strategy typically involves a base Layer 1 blockchain handling core security and settlement, with Layer 2 solutions built atop it to manage scalability, transaction processing, or specific application logic. Each layer specializes in certain tasks, allowing for greater efficiency and modularity across the overall system. This modular design helps address the blockchain trilemma of security, scalability, and decentralization.
Context
Protocol layering has become the dominant paradigm for scaling public blockchains, particularly for networks like Ethereum. This modular approach allows for significant improvements in transaction throughput and reduced fees, without compromising the security of the underlying Layer 1. Challenges include ensuring seamless interoperability between layers and managing the complexity of multiple protocol stacks. The ongoing development of various Layer 2 solutions continues to validate the effectiveness of this architectural strategy.
FairFlow introduces a layered protocol using decentralized auctions and randomized ordering to mitigate MEV, ensuring equitable and private transaction execution.
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