Sidechain
An independent blockchain that runs parallel to a main chain (Layer 1) with its own consensus mechanism, connected via a two-way bridge that enables asset transfers between chains. Unlike Layer 2 solutions that inherit the security of the main chain, sidechains have their own security model with their own validators, making them faster but potentially less secure.
“Polygon PoS operates as a sidechain to Ethereum with its own set of validators. It offers much cheaper transactions but doesn't inherit Ethereum's full security the way a rollup like Arbitrum does.”
Layer 2
A secondary protocol built on top of a Layer 1 blockchain to improve scalability, reduce transaction costs, and increase throughput without sacrificing the security guarantees of the underlying chain. Layer 2 solutions process transactions off the main chain and periodically post compressed proofs or data back to Layer 1 for finality.
Bridge
A protocol that enables the transfer of assets and data between two different blockchains that cannot natively communicate with each other. Bridges typically lock assets on the source chain and mint equivalent wrapped tokens on the destination chain. They are critical infrastructure for multi-chain ecosystems but have been the target of major exploits due to their complexity.
Layer 1
The base blockchain network that provides the foundational infrastructure — consensus, security, and data availability — upon which applications and Layer 2 solutions are built. Layer 1 blockchains process and finalize transactions on their own mainnet and have their own native cryptocurrency for gas fees.
Consensus Mechanism
The method by which a decentralized blockchain network reaches agreement on the current state of the ledger and which transactions are valid. Consensus mechanisms solve the problem of coordinating untrusting parties without a central authority. Major types include Proof of Work, Proof of Stake, Delegated Proof of Stake, and Proof of Authority.