In cryptocurrency, layers refer to the different levels of blockchain architecture, each with its own specific function and purpose. Here's a breakdown:

Layer 0 (L0)

- *Infrastructure layer*: Provides the underlying infrastructure for blockchain networks, enabling them to communicate and interact with each other.

- *Examples*: Polkadot, Cosmos.

Layer 1 (L1)

- *Base blockchain layer*: The foundation of a blockchain network, responsible for validating transactions, achieving consensus, and maintaining the integrity of the network.

- *Examples*: Bitcoin, Ethereum, Solana.

Layer 2 (L2)

- *Scaling layer*: Built on top of L1 blockchains, L2 solutions aim to improve scalability, reduce transaction costs, and increase transaction throughput.

- *Examples*: Polygon (formerly Matic), Optimism, Arbitrum.

Layer 3 (L3)

- *Application layer*: Enables the development of specific applications, such as decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming.

- *Examples*: Decentralized exchanges (DEXs), lending protocols, NFT marketplaces.

These layers work together to create a robust and scalable blockchain ecosystem, enabling a wide range of use cases and applications .