What is Blockchain Layer 1? The "Backbone" of the Ecosystem

Blockchain Layer 1 (also known as the Base Layer) is regarded as the "backbone" and core foundation of a blockchain network. It is an independent blockchain architecture capable of self-operating, validating, and finalizing transactions directly on the main chain without depending on any other system.

The role of Layer 1 includes executing consensus mechanisms (such as Bitcoin's Proof-of-Work or Ethereum's Proof-of-Stake), creating and adding new blocks to the distributed ledger, and maintaining the integrity and immutability of data. Layer 1 blockchains such as Bitcoin, Ethereum, Solana, and Cardano are designed to maximize strong security and a high degree of decentralization. However, because every transaction must go through an independent verification process by multiple nodes, these networks often face scalability challenges, resulting in low transaction throughput (TPS) and rising gas fees during demand surges.

🔑 Read more: What is Blockchain Layer 1? Operating Mechanisms and Key Roles in the Blockchain Ecosystem

What is Blockchain Layer 2? The "Extended Arm" for Scalability

Blockchain Layer 2 (also known as the Execution Layer) is the general term for solutions developed on top of a Layer 1 blockchain in order to solve the most challenging problem of blockchain technology: scalability—improving processing performance without altering the original characteristics of the base chain.

Essentially, Layer 2 executes transactions off-chain, then aggregates multiple transactions into a data summary or validity proof to be sent back to the Layer 1 main chain for final confirmation. This mechanism allows Layer 2 to achieve high transaction throughput (TPS) and low costs, helping to resolve the congestion and expensive gas fees that Layer 1s often encounter when there are too many users.

The most important characteristic of Layer 2 is its inherited security: instead of building its own security network from scratch, Layer 2 relies on the security infrastructure and decentralization of Layer 1 to ensure the safety of assets and data. Common Layer 2 solutions today include Rollups (Optimistic and Zero-Knowledge), State Channels (such as Bitcoin's Lightning Network), Sidechains, and Plasma. These are seen as the key to bringing blockchain technology closer to everyday real-world applications such as GameFi, DeFi, and micropayments.

Comparing Blockchain Layer 1 and Layer 2

Blockchain Layer 1 and Layer 2 are two complementary layers within the same system, each addressing different needs. Layer 1 is the foundational base where data is recorded directly and accuracy and transparency are guaranteed. However, because all transactions must be processed within a single system, speed is often limited. For example, some popular blockchains can only process from a few to a few dozen transactions per second.

Meanwhile, Layer 2 is built to help the system operate faster and more cost-effectively. Instead of processing everything on the main platform, Layer 2 handles a portion of activity externally and then sends the results back for confirmation. As a result, speed can increase significantly—even reaching thousands of transactions per second—while costs can be reduced by 90–99% in many cases.

Therefore, Layer 1 is suitable for systems that require high reliability, such as digital identity or critical data, while Layer 2 is suitable for applications that need speed and flexibility. In practice, the two layers are often combined to ensure both reliability and optimal performance.

Why Is Blockchain Layer 1 the Strategic Choice at the National Level?

Vietnam is entering a phase of comprehensive digital transformation, where data is becoming the core asset of the economy. Today's digital systems serve not only administration but are also directly tied to commerce, finance, real estate, and logistics. The scale of operations is enormous: more than 100 million citizens, connections across 34 provinces and centrally-run cities, 17 ministries and agencies, and the processing of tens of billions of transactions each year. This creates an urgent demand for an infrastructure capable of authentication, security, and data interoperability at the national scale.

🔑 Read more: Why Is Layer 1 Called the 'Backbone' of Blockchain?

The legal corridor for this process is also being clearly finalized. Decision 749/QĐ-TTg laid the groundwork for the National Digital Transformation Program, while Resolution 175/NQ-CP and the operational launch of the National Data Center starting in February 2025 demonstrate a direction toward data centralization and standardization. At the same time, the Law on Electronic Transactions 2023 (effective July 1, 2024) and the Law on Digital Technology Industry (effective January 1, 2026) are progressively establishing the legal framework for digital data, digital identity, and digital assets.

In this context, building a Layer 1 blockchain platform is no longer a technical matter but a strategic decision concerning digital sovereignty and technological self-reliance.

1. Technological Sovereignty and Data Control

A national blockchain must ensure independent operating capability without depending on foreign infrastructure. If built on Layer 2, the system would depend on the Layer 1 of a third party—from operating mechanisms and costs to technical changes.

Meanwhile, a Layer 1 blockchain enables:

• Proactive design of operating mechanisms aligned with Vietnamese law

• Full control over infrastructure and data

• Assurance against dependence on external platforms

This aligns with the direction set in Notice 171/TB-VPCP (2025), in which the Government assigned the Ministry of Public Security to research and deploy a national blockchain platform, as well as Decision 1131/QĐ-TTg, which identifies blockchain as a strategic technology.

2. Data Security and Immutability

In national systems, data must be guaranteed to be unalterable and always verifiable. Blockchain Layer 1 meets this requirement, as data is recorded directly and reaches the final authenticated state on the system.

By comparison, many Layer 2 solutions only store data temporarily or process it outside the main system—an approach that may suit high-speed applications but is not optimal for critical data.

With Layer 1, data is:

• Stored long-term with clear timestamps

• Unmodifiable after confirmation

• Easily traceable and auditable

This aligns with the direction set in the National Digital Architecture Framework (Decision 3090/QĐ-BKHCN), in which the national blockchain is classified as part of the shared infrastructure spanning from central to local levels.

3. The Foundation for National Digital Identity and Digital Assets

Critical systems such as citizen digital identity, product origin tracing, digital assets, and digital transactions all require an infrastructure layer with high reliability and independent verifiability.

Blockchain Layer 1 serves as the final confirmation layer, where every transaction is recorded and can be used as a legal basis. This is the essential foundation for deploying models such as asset tokenization, origin tracing, or decentralized identity systems.

NDAChain – The Layer 1 Blockchain for Vietnam's Digital Infrastructure

Within the orientation of building national digital infrastructure, NDAChain has been developed as a Layer 1 blockchain, serving as the Trust Layer for the entire data ecosystem. The platform focuses on solving core challenges such as digital identity, data authentication, origin tracing, and transparent data sharing across systems.

On NDAChain, two important application layers have been deployed:

• NDAKey – a self-sovereign identity management solution that empowers citizens to control their own data.

• NDATrace – an identification, authentication, and product origin tracing platform that helps monitor and verify product data throughout the supply chain.

🔑 Read more: The EU Digital Product Passport and the Role of National Blockchain in Origin Tracing  

Technically, NDAChain is built with a distributed network of nodes that store the ledger, in which data is recorded in the form of hash, timestamp, and metadata to ensure integrity. The system uses the Proof-of-Authority (PoA) consensus mechanism with a block time of approximately 2 seconds and a performance of around 1,200 transactions per second, meeting the demand for large-scale processing. At the same time, smart contracts are integrated to manage decentralized identifiers (DIDs), as well as data issuance, authentication, and retrieval.

As a trusted infrastructure layer, NDAChain is not merely a technological platform but also a bridge that enables data systems to operate in synchronization, transparency, and verifiability—contributing to the advancement of Digital Government, the Digital Economy, and Digital Society in Vietnam.

Layer 1 – The Foundation for a Sustainable Digital Ecosystem

Both Blockchain Layer 1 and Layer 2 play important roles in the blockchain ecosystem, but for national-scale systems, Layer 1 remains the irreplaceable core foundation. It is the infrastructure layer that ensures data authenticity, transparency, and verifiability—the key elements in building digital trust.

🔑 Read more: NDAChain: Vietnam's Layer 1 Blockchain Infrastructure  

In the context where Vietnam is finalizing its legal framework and rolling out comprehensive digital transformation programs, mastering a Layer 1 blockchain is not only a technological choice but also a strategic step to safeguard data sovereignty and national technological self-reliance.

With this orientation, NDAChain—together with its application layers such as NDAKey and NDATrace—is contributing to the formation of a trusted data infrastructure, where information is authenticated, connected, and effectively leveraged. This is the very foundation for advancing Digital Government, the Digital Economy, and Digital Society in the next phase of development.