The whole conversation in the blockchain space in calling something L0, L1, L2, L3 and so on is rather interesting. To the best of my knowledge, it goes like this:
- A custom blockchain that has its own validator set and therefore Consensus Algorithm is usually called an L1. An L1 should not rely on any other chain for any part of its Consensus Algorithm.
- Contrary, a chain that uses an L1 for parts of Consensus Algorithm is called an L2.
- At some point, Polkadot started to position itself as an L0, being one of the first systems that allowed other L1 chains to be built and secured on top of it.
- This terminology broke apart once Ethereum doubled down on the rollup-centric roadmap. In this model, Ethereum was the L1, and the Rollups that are built on top of it are called an L2.
- I don’t know much about L3+, but supposedly people have tried to build a rollup on top of another rollup and so on.