Execution Layer

The protocol layer responsible for processing transactions and executing smart contracts in a blockchain network.

What is the Execution Layer?

The execution layer, formerly referred to as Ethereum 1.0 in the context of Ethereum, is the component of a blockchain network that handles the processing of transactions, execution of smart contracts, and management of the blockchain’s state. In Ethereum, the execution layer works in tandem with the consensus layer, introduced during the Ethereum 2.0 upgrade, to ensure the network operates efficiently. While the consensus layer focuses on achieving agreement among nodes, the execution layer is responsible for the computational work, such as validating transactions, updating account balances, and executing the logic of smart contracts.

In Ethereum, the execution layer is managed by execution clients, such as Geth, Nethermind, Besu, or Erigon. These clients maintain the Ethereum Virtual Machine (EVM), which processes smart contract code and updates the blockchain’s state based on transaction outcomes. The execution layer generates state data, including account balances, contract storage, and transaction receipts, which the consensus layer then validates to ensure network agreement. This separation of duties, formalized after Ethereum’s Merge in September 2022, allows for modular upgrades, improving scalability and enabling features like sharding and rollups.

The execution layer is critical for user interactions with decentralized applications (dApps) and digital asset transactions. It ensures that all computations are performed correctly and that the resulting state changes are propagated across the network, maintaining Ethereum’s functionality while the consensus layer secures the network through proof-of-stake (PoS).