To accommodate heterogeneous transmission conditions in a streaming scenario several multi-rate multicast solutions have been proposed, based on simulcasting or hierarchical layering. At present, most of these schemes follow a receiver-driven layered multicast approach, where the receivers join or leave a subset of the session’s fixed-rate layers in response to changing network conditions. Yet, recently fine-grained coding schemes are being developed, e.g., as proposed in MPEG-4. This will permit a sender to dynamically adapt the size of the layers according to the reported transmission conditions. In this paper, we briefly discuss a general multi-rate congestion control protocol based on dynamic layering and present the basic design challenges. Since adaptation involves the sender and makes dynamic layering fundamentally more complex than its static counterpart, we compare both approaches by extensive simulations in order to explore the theoretical benefit of dynamic over static la...