Various solutions to the scalability trilemma have been implemented. The Layer 1 solution is a solution that makes direct changes to the Layer 1 blockchain protocol itself. An example of this change is to increase the block size In order to pack more transaction data into each new block, The goal is to increase network scalability and transaction completion times. However, one of the disadvantages of increasing the overall block size is that each node must subsequently process more data-intensive blocks for finalization. It can be argued that in this example, the increased throughput may ultimately reduce decentralization because many network participants do not have the capacity to efficiently handle larger chunks. This, in turn, could make the barriers to entry too high for individuals and amateurs, while concentrating power in the hands of large and complex corporations.

The Layer 2 scale-out solution works by increasing network speeds without significantly increasing the burden on individual nodes. They do this by taking some of the required data processing out of the main blockchain network, thereby reducing the network liability of individual network nodes in the process. The Layer 2 solution does not change the protocols underlying the main blockchain, but rather improves operational efficiency by performing operations outside the main blockchain. Off-chain processes relieve the processing stress of the underlying blockchain protocol while still maintaining many of its security, decentralized, and transaction speed characteristics.

第 2 页 Layer solutions often exist as smart contracts built on top of the original blockchain . As smart contracts, they have the ability to interact with external third-party software where part of the network's processing operations are migrated. Tier 2 development also allows the creation of "sub-chains" or "side chains," which are secondary chains connected to the main blockchain. Side chains can handle complex processing tasks and even host entire DApps while interacting minimally with the base-layer blockchains they anchor. This is exactly the type of system Loom Network provides for developers building DApps on the Ethereum blockchain. Dapps built on the Loom Network platform are given a dedicated dAppChain, which becomes their own unique side chain built on the Ethereum blockchain.