Layer 1 protocols like Ethereum and Bitcoin provide a strong foundation with robust security and decentralization but often struggle with scalability. Layer 2 solutions, such as the Lightning Network and Optimistic Rollups, aim to enhance scalability by processing transactions off-chain while relying on Layer 1 for security. Layer 1 ensures robustness but can be slow and costly, whereas Layer 2 improves speed and reduces fees, though it introduces additional complexity. Networks with BlockDAG architecture, like the new Waterfall Network for example, address scalability and security directly on Layer 1, offering an alternative to traditional blockchain limitations.