Seven Layer-3 Protocols Pushing the Boundaries of Blockchain Utility

Blockchain is a layer cake. And as every baker knows, you have to start with the bottom layer and build upwards before you get to add all the fun stuff on the app layer – like sprinkles and frosting. Layer-1s like Ethereum and Bitcoin have laid a strong foundation to support the weight of the cake. Layer-2s like Optimism and zkSync have then added lightness – “scalability” in blockchain terms.

We’re now in the Layer-3 era in which the blockchain stack is extended to its full height through custom app environments, off-chain logic, and omnichain liquidity. The following seven protocols fall into this bracket: they’re Layer-3 to their core, which means they’ve been optimized to do a specific task extremely well. Let's explore how these protocols are expanding blockchain utility while dropping a few more baking metaphors in the mix.

1. ZK Chains

ZK Chains, powered by zkSync’s zero-knowledge technology, allow developers to launch interoperable app chains where they get to choose the recipe. A little more throughput? A dash of consensus? With ZK Chains, you can have your blockchain served just the way you like it. Designed for enterprises and web3 dapps requiring bespoke blockchains, ZK Chains are perfect for use cases like supply chain tracking or gaming. ZK Chains fuse flexibility with Ethereum’s robust security, while trustless bridges enable assets to move seamlessly between rollups and other ZK-based networks. 

2. StarkEx Appchains

StarkEx Appchains, born from StarkWare’s STARK-proof wizardry, form app-specific Layer-3 rollups. (Technically they’re something of a hybrid L2/L3 but let’s not get into that right now.) This setup allows decentralized applications to operate with tailored logic and high efficiency. Optimized for rapid transaction processing and specialized functionality, StarkEx Appchains address the needs of performance-intensive dapps.

Their ability to scale operations for trading, gaming, and other onchain sectors while maintaining Ethereum-grade security makes them a cornerstone for developers aiming to push decentralized applications to new heights. If you wanna create a web3 application that looks and feels like web2 when it comes to performance, StarkEx Appchains are where you go.

3. Arbitrum Orbit

Arbitrum Orbit provides a framework for building custom Layer-3 chains utilizing Arbitrum Nitro and Stylus technologies. Teams can deploy either permissioned or open blockchains, configuring governance and fee structures to suit their tastes. This approach empowers creators to design systems tailored to unique requirements, from private enterprise networks to web3 games.

The value of Arbitrum Orbit lies in its adaptability and scalability. Developers can construct chains for gaming and financial services, for example, with the flexibility to adjust rules and costs as needed. The range of projects that have elected to build with Arbitrum Orbit so far is diverse to put it mildly, ranging from ApeChain to trading exchange Kinto. The use cases Orbit is good for are uncapped, with each project that takes the plunge benefiting from technical support and potentially grants courtesy of Arbitrum.

4. Cartesi

Cartesi blends Layer-2 and 3 to run complex computations off-chain in Linux-based environments. This approach preserves blockchain’s core properties, not least in terms of security, while unleashing a torrent of possibilities for gaming and data-heavy dapps. This hybrid model allows developers to use familiar tools and programming languages to build sophisticated applications without burdening the main chain.

Cartesi allows dapps to spin up their own rollup complete with dedicated compute, ensuring they have an environment in which everything is predictable and controllable. If we were to attempt a tenuous cake-making analogy here, it would be to assert that Cartesi gives you a private oven in which to bake. That way, you don’t have to risk your housemate opening the oven door before your cake’s fully risen and wrecking all your hard work.

5. Orbs

Orbs doesn’t want to host your dapp on its Layer-3 – there are plenty of other protocols willing to do that. Instead, it wants to back the truck up and dump all the liquidity you could ever wish for into your spot or perps DEX. If liquidity is the butter that keeps DeFi greased like a cake tin, Orbs is the dairy queen delivering it on-tap.

Orbs effectively serves as the back-end for DeFi protocols, delivering the trading solutions and liquidity they need to thrive. While its Liquidity Hub takes care of business, its dLIMIT and dTWAP trading tools allow DEXs to make like CEXs by introducing limit orders and DCA-style price averaging. It’s all routed through Orbs’ L3 and delivered to the Layer-1 and 2 chains you use every day.

6. Fuel VM

Fuel VM integrates a custom virtual machine with rollup technology to create a modular execution layer focused on high-throughput, application-specific chains. Yep, that’s a lot to digest so let’s break it down as best we can. Fuel is an Ethereum-native layer designed to offer unparalleled speed, flexibility, and scalability for developers. 

Unusually, it uses a UTXO-based model as pioneered by Bitcoin, and is capable of supporting a wide range of assets. The FuelVM that powers it all doesn’t just give developers greater speed: it enables them to create highly sophisticated smart contracts that are capable of reacting to an array of on- and off-chain events. From gaming to DeFi, the FuelVM provides an Ethereum-native experience that looks and feels nothing like Ethereum.

7. EigenLayer

We don’t typically envisage EigenLayer in Layer-3 terms, but make no mistake, when you’re securing some new Ethereum L3 through restaking, it’s thanks to EigenLayer. It’s the primitive that makes the rest of the EVM stack work as one. EigenLayer introduces restaking and shared security to Layer-3 primitives, allowing developers to leverage Ethereum’s security for new protocols and services. This approach enables the creation of secure, innovative systems by “renting” Ethereum’s established trust network for validation and consensus.

EigenLayer supports a range of applications, from cross-chain bridges to novel staking models, by providing a shared security framework. Its ability to extend Ethereum’s reliability to new projects makes it a foundational tool for developers seeking to build trustworthy, decentralized solutions on whatever layer happens to be in vogue at the time.

The Last Layer of the Blockchain Cake

There’s a reason why most cake-makers stop at three layers: things tend to get unwieldy after that. While only a fool would predict that there will never be an attempt to engineer another web3 layer, any more than they’d venture that Gillette will never add another blade to their razor, L3 seems to be the top. The highest point of the blockchain layer cake that crowns everything that’s come before.

As we’ve seen, there’s more than one use case for Layer 3, but if there’s a shared similarity between all the L3s profiled here, it’s that they’re narrowly optimized for a specific task. That might be hosting a single application or solving a specific onchain problem, like liquidity provision. And, to squeeze in a final cake analogy, what happens on Layer-3 doesn’t stay on Layer-3: it drips down onto the lower layers, creating a moist and flavorsome blockchain ecosystem for everyone.

This might be the last time you hear blockchain described as “moist” – but it’s not the last you’ll be hearing about Layer-3. It’s a highly versatile web3 tech whose time has come.