Layer 1 refers to the foundational layer of a blockchain network. It includes the core protocol and infrastructure that enables the network to function. This layer is responsible for the basic operations, such as transaction validation, consensus mechanisms, and data storage. Examples of Layer 1 blockchains include Bitcoin and Ethereum. Layer 1 is crucial for the overall security and performance of a blockchain. It determines how transactions are processed and how nodes communicate with each other. Enhancements or upgrades to Layer 1 can improve scalability and efficiency, impacting the entire ecosystem built on top of it.