Continuing from the previous post in this series...
We look at what is meant by base layer and layer 2 by learning from what Hive has.
To start with, the easiest example is to compare the Ethereum network with its layer 2 networks. Ethereum is known as the base layer. But as you may know, transaction fees on Etheruem is charged every time transaction is done. The fees is known to be expensive.
Layer 2 are what extends the base layer and cost less to transact on. You can read about Ethereum's layer 2 here.
Suffice to note, base layer is directly on the blockchain, kind of like the roads on the ground. When the road gets congested, a kind of highway can be built and used on top of it. This is what can be thought of as layer 2. Loopring is one example of layer 2 or L2 of Ethereum that facilitates cheaper transaction when trading. But of course, it costs to send the asset from the base layer to layer 2, and back to base layer.
Let's see how things are like in Hive with regards to base layer and layer 2 by checking out the HivePay site.
The Liquid.Hive refers to the assets at the base layer. Currently, this account holds 4.252 Hive. The base layer of Hive only has 2 assets: Hive and HBD.
The SWAP.Hive is the Hive equivalent at Hive's layer 2, in this case, Hive-Engine. The Liquid.Hive can be shifted to the layer 2 and it will be called SWAP.Hive.
Once we are in the layer 2 of Hive, or Hive-Engine, we can use SWAP.Hive to swap for the layer 2 tokens.
You can access it by going to one of the DEX, such as https://leodex.io/tokens.
Or you can access your Hive Engine layer 2 from Leo Finance wallet site.
Once you are in layer 2, you can stake your tokens and earn additional curation rewards accordingly. The principle is just like in the Hive base layer.
So to round it off, in Hive, you can earn rewards on the base layer and on the Hive Engine layer 2.
Hope this is clear for new comers to Hive who might be wondering why there are so many tokens.
In summary, the base layer can become too crowded even in Hive and therefore we have the Hive Engine layer for the other tokens and projects.