Understanding blockchain layers is crucial for Nigerian crypto investors looking to optimize transaction costs and speed. As gas fees on Ethereum can reach several dollars per transaction, knowing the difference between Layer 1 and Layer 2 solutions can save you significant money.
This guide breaks down the key differences between Layer 1 blockchains like Ethereum and Solana, and Layer 2 solutions like Arbitrum—helping you make informed investment decisions in Nigeria's growing crypto ecosystem.
Layer 1 (L1) blockchains are the base networks where all transactions occur. They process and validate transactions independently without relying on other chains. Bitcoin, Ethereum, and Solana are all Layer 1 blockchains.
Layer 1 networks provide complete security, decentralization, and consensus mechanisms. However, they often face scalability challenges that result in network congestion and high transaction fees.
Ethereum processes approximately 15-30 transactions per second (TPS) on its base layer. As of 2025, average gas fees range from $1.50 to $2.93 per transaction, though these can spike during network congestion.
The Dencun upgrade has improved Ethereum's throughput from around 15 TPS to approximately 1,000 TPS through proto-danksharding. However, for everyday Nigerian users sending remittances or trading, these fees remain prohibitive.
Solana can handle up to 65,000 transactions per second with an average block time of just 400 milliseconds. Transaction fees average $0.00025—making it over 10,000 times cheaper than Ethereum.
Solana achieves these low costs through its unique Proof of History (PoH) consensus mechanism combined with parallel transaction processing. This makes Solana ideal for Nigerian traders who execute frequent transactions or participate in DeFi protocols.
💡 Quick Take:
Secure and decentralized
Slower (Ethereum) vs ultra-fast (Solana)
Ideal for high-value transactions or frequent trades
Layer 2 (L2) networks are built on top of Layer 1 blockchains to improve scalability. They process transactions off the main chain, then submit batched results back to Layer 1, inheriting its security while offering faster speeds and lower costs.
Arbitrum processes approximately 2,000-4,000 transactions per second with average fees between $0.15 and $0.30. It holds over $15 billion in Total Value Locked (TVL), commanding 40% market share among Ethereum Layer 2 networks.
Arbitrum uses Optimistic Rollup technology to process transactions off-chain while anchoring security on the Ethereum mainnet, offering significantly lower fees without compromising decentralization.
💡 Quick Take:
Built on Ethereum
Low-cost, fast, and secure
Great for cost-conscious DeFi users
|
Feature |
Ethereum (L1) |
Solana (L1) |
Arbitrum (L2) |
|
Transaction Speed |
15-30 TPS |
65,000 TPS |
2,000-4,000 TPS |
|
Average Fees |
$1.50-$2.93 |
$0.00025 |
$0.15-$0.30 |
|
Block Time |
12 seconds |
0.4 seconds |
0.25 seconds |
|
Security Model |
Independent |
Independent |
Inherits from Ethereum |
|
Best For |
High-value DeFi |
High-frequency trading |
Cost-conscious Ethereum users |
When investing in these altcoins, consider transaction costs against your investment size. For a ₦50,000 investment, paying $2 in Ethereum gas fees represents a 4% loss before you even start trading.
With Arbitrum holding $18 billion in TVL and supporting over 560 DApps, it offers a middle ground between Ethereum's security and Solana's speed. This makes it attractive for Nigerian investors seeking balance.
For crypto trading platforms that work with Nigerian bank accounts, many now support multiple Layer 1 and Layer 2 networks, giving you flexibility in choosing your preferred blockchain.
Start Small: Test transactions on each network before moving large amounts.
Track Fees: Use tools like Etherscan Gas Tracker to monitor prices.
Trade Smart: Frequent traders benefit more from Solana or Arbitrum.
Bridge Safely: Always use official bridges when moving between Layer 1 and Layer 2.
Compare Rates: Check current crypto prices on nairaCompare before investing.
Check current crypto rates on nairaCompare to compare prices across different blockchains before making investment decisions.
Layer 1 blockchains like Solana aim to scale directly at the base layer, while others like Ethereum rely on Layer 2s to boost performance and reduce congestion.
Both approaches have a place in the evolving crypto ecosystem.
For Nigerian investors, understanding these differences helps optimize fees, enhance transaction speed, and choose the right network for your crypto strategy.
Q1. What is the main difference between Layer 1 and Layer 2 blockchains?
Layer 1 blockchains handle transactions directly on their base chain, while Layer 2 solutions process transactions off-chain to improve speed and reduce fees.
Q2. Is Solana better than Ethereum for Nigerian crypto traders?
Solana offers faster and cheaper transactions, making it ideal for frequent traders, but Ethereum remains more secure and widely supported across DeFi platforms.
Q3. How can I avoid high gas fees in Nigeria?
Use Layer 2 networks like Arbitrum, or compare real-time transaction fees on nairaCompare before making transfers.
Q4. Which Layer 2 network is most popular in 2025?
Arbitrum leads with more than 40% market share and over $15 billion in Total Value Locked (TVL).
Compare exchange rates and find the best platforms for buying Bitcoin and altcoins on nairaCompare today.