Layer 1 blockchains: foundation, function, and future impact

The article explains Layer 1 blockchains as the foundational settlement layer for crypto, stressing their central role in DeFi, smart contracts, and Web3. It highlights trade-offs in the blockchain trilemma (security, decentralization, scalability) and compares consensus models (PoW vs PoS) with implications for throughput and energy use. Market-relevant points: DeFi TVL across Layer 1s topped $100B (Ethereum ~$70B, Solana ~$9B), institutional investors use TVL and development activity to allocate capital, and protocol upgrades (e.g., Ethereum’s Merge, sharding, modular designs) materially affect network economics and adoption. The piece argues Layer 1 robustness will continue to underpin risk assumptions for applications and capital flows, so upgrades and decentralization metrics should influence investment and product decisions.