Consensus & Mining
Beginner
Updated 1/15/2025
What is
Layer 1?
The base blockchain protocol that handles consensus, security, and transaction finality. Ergo is a Layer 1 blockchain with native smart contract capabilities.
Layer 1 (L1) refers to the base blockchain protocol - the foundational layer that provides consensus, security, data availability, and transaction finality. Examples include Bitcoin, Ethereum, and Ergo. Layer 1 blockchains are self-contained and don't rely on other networks for security. Ergo is a Layer 1 blockchain featuring Proof-of-Work consensus (Autolykos), the eUTXO model for smart contracts, and native token support. Layer 2 solutions (like Lightning Network or rollups) build on top of Layer 1 for additional scalability.
Key Points
- Base blockchain providing consensus and security
- Self-contained - doesn't rely on other networks
- Ergo is a Layer 1 with PoW and eUTXO
- Handles transaction finality and data availability
- Layer 2 solutions build on top for scaling
- Examples: Bitcoin, Ethereum, Ergo, Cardano
Use Cases
1
Understanding blockchain architecture
2
Comparing Ergo to other L1 blockchains
3
Evaluating Layer 1 vs Layer 2 tradeoffs
4
Understanding where transactions are finalized
Technical Details
Ergo's Layer 1 provides: 1) Autolykos PoW consensus for security, 2) eUTXO model for state management, 3) ErgoScript for smart contracts, 4) Native multi-asset support, 5) ~2 minute block times, 6) Adjustable parameters through miner voting. Layer 2 solutions on Ergo could include Plasma chains, state channels, or rollups, though the efficient L1 handles most use cases directly.
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Frequently Asked Questions
Questions about Layer 1
Common questions about this topic
How to provide liquidity on Ergo?
Providing liquidity on Ergo depends on the current active DEX or AMM venue. In general, you deposit equal value of two assets into a pool, receive LP tokens representing your share, and earn a portion of trading fees. Spectrum Finance is historical/frozen since February 2024, so verify the active venue, contracts, liquidity depth, and withdrawal process before depositing funds.
How-to
DeFi
How to get started with Ergo?
Start by getting a wallet (Nautilus for browser, Terminus for mobile). Back up your seed phrase securely offline. Get some ERG from a current exchange or verified venue, then make a small test transaction. After that, explore NFTs, mining, DeFi references, or the developer stack if you're a builder.
How-to
Getting Started
Is Ergo a good investment?
This is not financial advice. Ergo has strong fundamentals: fair launch (no VC dump risk), innovative technology (eUTXO, Sigma Protocols, NiPoPoWs), active development, and a cypherpunk ethos. It's a smaller market cap project with higher risk/reward than established chains. Research thoroughly, understand the technology, and never invest more than you can afford to lose.
Comparison
Getting Started
How do NFTs work on Ergo?
Ergo NFTs are native tokens with quantity of 1, making each unique. Unlike Ethereum where NFTs need smart contracts, Ergo NFTs are first-class protocol citizens. Mint for minimal fees (~0.001 ERG), trade on SkyHarbor marketplace, and enjoy full eUTXO security. NFTs can include rich metadata and royalties.
Explainer
Technology