A Beginner’s Guide to Ethereum Layers: Data Availability, Consensus, and Execution – Unchained – Unchained

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Ethereum’s architechture is built on three layers: the data availability layer, the consensus layer, and the execution layer.

Posted March 26, 2024 at 9:07 am EST.

Ethereum is the world’s leading Turing-complete smart contract blockchain. However, it faces challenges such as scalability, security, and usability. To overcome these challenges, Ethereum’s architecture is built in layers. 

Read on to learn about Ethereum layers, how they work, and their importance.

What Are Ethereum Layers?

Ethereum layers are different levels of the Ethereum tech stack that enable scalability, security, and functionality for the network and its applications. 

There are three main layers of Ethereum:

  • Layer 1: Data Availability Layer
  • Layer 2: Consensus Layer
  • Layer 3: Execution Layer

Each layer plays an essential role within the Ethereum ecosystem while working together to provide an efficient blockchain-powered system. 

Ethereum Layers Explained

Let’s dive deeper into each layer and see how they work. 

Layer 1: Data Availability Layer

The data availability layer of the Ethereum network ensures that all transactions are available and accessible to users, allowing network participants to verify transactions independently. This is crucial for maintaining the transparency and auditability of the network, which makes blockchain so appealing as a trustless, decentralized system. 

Ethereum’s data availability layer records all transactions and smart contract interactions. 

Smart contracts allow developers to create decentralized applications (dApps) –  P2P software with specific uses. These power different Ethereum functions, including protocols, decentralized finance (DeFi), and non-fungible tokens.

Acting as a ledger that keeps all this information readily accessible, the data availability layer’s role is vital in allowing anyone to verify the Ethereum blockchain’s current state to maintain the network’s integrity. 

Layer 2: Consensus Layer 

The consensus layer of the Ethereum ecosystem is where the distributed network agrees on the current state of the blockchain through the use of a consensus mechanism. It functions as the backbone of blockchain networks as it enables all participants of a distributed network to agree on what transactions should go into the next block. 

Ethereum uses Proof of Stake (PoS) as its consensus protocol, enabling network participants to stake ETH to become a network validator. Validators stake Ethereum (ETH) tokens to process transactions and add new blocks to the blockchain, ensuring network security and integrity remain intact. 

Ethereum’s consensus layer moved from Proof of Work (PoW) to Proof of Stake (PoS) in September 2022 to become a more scalable and energy-efficient blockchain. 

In addition to the move to PoS, further network upgrades are on Ethereum’s roadmap that will positively affect the consensus layer. For example, the introduction of sharding will help Ethereum become a scalable, high-throughput blockchain. 

Layer 3: Execution Layer 

The execution layer within the Ethereum network architecture handles the execution of smart contracts and transactions. It takes instructions from transactions and smart contract interactions, processes them, and applies these changes to the state of the blockchain. 

At the center of Ethereum’s execution layer, you find the Ethereum Virtual Machine (EVM), which interprets and processes code from smart contracts to enable the creation of decentralized applications (dApps) on the Ethereum network.  

Wrapping Up

Ethereum layers are different parts of the Ethereum architecture that enable scalability, security, and functionality for the network and its applications. They work together to make the blockchain a powerful and versatile platform supporting various applications and use cases.

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