The blockchain industry has seen rapid progress, with developers constantly looking to improve scalability, security, and efficiency. A significant advancement is the introduction of Layer 3 (L3) blockchains, which were designed to address some of the limitations of Layer 2 (L2) solutions. PAW Channel leads this evolution with its new L3 blockchain.
Understanding the different layers of blockchain
- Layer 1 (L1): The base layer or main blockchain, like Bitcoin or Ethereum, handles core functions like consensus, security, and data storage.
- Layer 2 (L2): Built on L1 to improve scalability and transaction speed. L2 protocols, such as Lightning Network for Bitcoin or Optimistic Rollups for Ethereum, operate off-chain and interact with L1 only when needed.
- Layer 3 (L3): L3 is on top of L2 and L1, providing additional abstraction and specialization. L3 is designed to optimize specific features such as privacy, interoperability, and specialized use cases that L2 solutions cannot adequately address.
Role and limits of layer 2
L2 blockchains were developed to solve the problems of L1 blockchains. As networks like Ethereum grew, they became congested, leading to slower transactions and higher fees. L2s reduce this burden by processing transactions off-chain.
- Scalability:By moving transactions off-chain, L2 solutions can handle more transactions per second (TPS), improving scalability.
- Reduced costs:Since L2 solutions reduce the number of transactions that need to be processed on-chain, they reduce transaction fees.
- Faster transactions:L2 solutions enable near-instantaneous transactions because they bypass the slower L1 consensus mechanisms.
However, Layer 2 solutions still rely on Layer 1 for final resolution and may not address issues such as interoperability or specialized functionality.
PAW Chain Layer 3: The Next Step
Layer 3 Blockchainslike PAW Chain, go beyond L2. They offer more efficient task management, better interoperability between blockchains, and enhanced privacy features.
Main differences between L2 and L3:
- Specialization: L3 blockchains are tailored to specific industries and offer customized features. For example, a L3 blockchain for video games can be optimized for fast microtransactions.
- Interoperability: L3 blockchains can connect multiple L1 and L2 networks, facilitating seamless communication and transfers between different blockchains.
- Confidentiality: L3 blockchains can implement advanced privacy features, crucial for industries where data privacy is critical.
Benefits of PAW Chain Layer 3 Blockchain
While Layer 3 blockchains help manage transactions off the main chain, they still need to rely on Layer 1 to complete those transactions. PAW Chain’s Layer 3 goes a step further by focusing on specific tasks, reducing the need to go back to the main chain. This makes transactions cheaper and faster, which is perfect for applications that need to process a lot of data quickly. In fact, PAW recently recorded an incredibly fast block time of just 0.004 milliseconds, making it one of the fastest networks out there.
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Greater interoperability:
One of the problems with blockchains is that they don’t easily communicate with each other. PAW Chain’s Layer 3 solves this problem by acting as a bridge between different networks, making it easier to move assets and data between chains. Developers can also easily scale their projects to multiple chains with PAW, using a single liquidity pool that runs on networks like BASE, Polygon, and BNB. This setup reduces the cost and time typically required to run on multiple chains.
Privacy is always a concern in blockchain, especially for businesses and individuals who need to keep their transactions private. PAW Chain’s L3 uses advanced encryption to enhance privacy, allowing users to transact without exposing sensitive information.
Most Layer 3 solutions are designed to be flexible and adapt to various uses. But with Layer 3 blockchains like PAW Chain, you can tailor the system to specific industries or needs. For example, a gaming-focused L3 blockchain could be optimized for fast, small transaction sizes and integrate seamlessly with existing gaming platforms.
Preventing Multi-Chain Hacking: How PAW Chain’s Layer 3 Could Have Made a Difference:
Having highlighted the features of PAW Chain’s Layer 3, it is essential to consider the impact this technology could have had on real-world events. A good example is the Multichain hack in July 2024, where over $120 million in assets were stolen due to vulnerabilities in the bridge’s smart contracts.
PAW’s L3 registry could have played a crucial role in preventing such an incident through its advanced verification processes, multi-signature protocolsand automated audit trails. As one of CertiK’s top 10 most audited projects, and unlike traditional L1 and L2 solutions, PAW’s L3 introduces an additional layer of security by isolating high-risk transactions and applying advanced cryptographic techniques to ensure that each transaction is carefully verified before execution.
Preventing Uniswap v3 MEV Bot Exploitation: How PAW Chain Layer 3 Could Have Made a Difference:
In June 2024, Uniswap v3 was hit by a Maximum Extractable Value (MEV) bot exploit. The bot took advantage of the mempool to preempt transactions, taking advantage of price differences and causing significant losses. The bot monitored pending transactions and strategically placed its own, exploiting Uniswap’s reliance on gas fees to determine transaction order.
How PAW Chain’s L3 could have prevented this:
Private mempool
PAW Chain’s Layer 3 architecture hides transaction details, making them visible only to the sender until completion. MEV bots cannot access or manipulate pending transactions, stopping front-end attacks and keeping transactions secure.
Cross-chain operability
PAW Chain allows smart contracts to run on multiple blockchains. By reducing reliance on multiple liquidity pools, the system makes it harder for bots to mine transactions on individual networks, improving overall security.
Triple Ledger and Cross Stitch Methodology
PAW Chain records each transaction on three separate ledgers to ensure data accuracy. The cross-stitch methodology links the blocks together, making unauthorized manipulation extremely difficult. These techniques ensure the integrity and security of the blockchain.
In summary
PAW’s new Layer 3 blockchain is a significant step forward, offering improved scalability, interoperability, privacy, and specialization. As the industry grows, PAW will play a key role in addressing the limitations of previous layers and opening up new possibilities.
Visit the PAW Channel Websiteand their social networks.
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