Is narrative greater than application? Cross-chain interoperability is theoretically difficult to fully achieve, yet such projects are emerging one after another

Author: DeMan

In the world of blockchain, security, scalability, and decentralization are often mutually exclusive, which is a significant pain point for many Layer 1 projects. To overcome these limitations, multi-chain ecosystems have emerged, but they also bring new challenges, such as interoperability difficulties and high transaction fees. In this context, the emergence of ZetaChain is particularly important. By providing a cross-blockchain smart contract platform, ZetaChain aims to achieve seamless transfer of value and data between different blockchains. Below is an introduction to the ZetaChain project.

Annual data showcases some progress, ZetaChain aims to support a more decentralized ecosystem

Unlike previous cross-chain bridges and multi-chain products, ZetaChain adopts a decentralized strategy that allows users and developers to freely and securely transfer assets and data across different blockchains. This represents a new attempt by blockchain technology to solve interoperability issues, and its potential impact on the entire blockchain ecosystem cannot be ignored.

Curve Finance will integrate ZetaChain to provide native BTC support for cross-chain exchanges and full-chain asset pools.

Some annual data from ZetaChain demonstrates its activity in the industry. The monthly active users of its testnet dApp ecosystem exceed 780,000, with over 14,000,000 cross-chain transactions generated through dApps on the ZetaChain testnet. At the same time, more than 150 dApp partners have integrated on the testnet, and over 46,000 dApp contracts have been deployed by developers, with community members exceeding 1,800,000 from over 100 countries, covering all major crypto markets. ZetaChain has also achieved native BTC smart contract support for the first time, allowing users to perform DeFi operations using Bitcoin or directly from the Bitcoin network itself.

The ecological map of the ZetaChain project.

This data reflects ZetaChain's efforts and some achievements in blockchain interoperability, while also highlighting its potential role in the global blockchain ecosystem.

Reviewing the development history of ZetaChain: $27 million raised in the second round of financing

ZetaChain is an L1 blockchain platform dedicated to achieving interoperability between chains. Its notable features include approximately 5-second block times and transaction finality without the need for additional confirmations or reorganization. One of ZetaChain's main innovations is its ability to connect applications with any other application or blockchain, providing a Web3 access point for both new and existing users. This interoperability is achieved through full-chain smart contracts that can read and write data from any other blockchain, including those that do not natively support smart contracts. Additionally, developers can use ZetaChain's Connector feature to send data and value to any chain.

ZetaChain was launched by an anonymous team on December 15, 2021, with team members having backgrounds at Coinbase and Basic Attention Token (BAT). The advisory team includes several former Coinbase employees, such as the first HR head of Coinbase, Nathalie McGrath, and former internal advisor Juan Suarez. On March 9, 2022, the team released the ZetaChain white paper and DevNet, completing its initial seed financing, the specific amount of which was not disclosed. Investors in this round included several notable figures, such as Dan Romero, Sam Rosenblum, John Yi, JD Kanani, and HwiSang Kim.

In August 2023, ZetaChain completed its second round of financing, raising $27 million from investors including Blockchain.com, Human Capital, Vy Capital, Sky9Capital, Jane Street Capital, VistaLabs, CMT Digital, Foundation Capital, LingFeng Capital, and GSR.

ZetaChain's data performance.

ZetaChain's testnet was launched in August 2022 and quickly attracted a large number of users. Within the first month of launch, the user count reached 150,000. By March 2023, this number grew to one million, during which ZetaChain introduced incentives for validators. Although the testnet has seen significant user growth, ZetaChain has yet to announce an official launch date for the mainnet. These developments reflect ZetaChain's activity and influence in the blockchain space.

Detailed explanation of ZetaChain's technical logic and solutions: A series of innovations in cross-chain interoperability

In the development of blockchain technology, ZetaChain has demonstrated its technical architecture in cross-chain interoperability. Below is a detailed introduction to its core technologies:

zEVM: Supports interaction with Ethereum and allows interoperability of applications from external blockchains

The zEVM in ZetaChain is an execution layer compatible with the Ethereum Virtual Machine (EVM). This layer not only supports standard EVM functions, such as the creation and interaction of smart contracts but also allows external blockchains to call contracts built on it. The design of zEVM enables the generation of outbound transactions on blockchains connected to ZetaChain, providing developers on ZetaChain with the ability to create zEVM-based smart contracts, including standard Solidity contracts and contracts specifically designed for cross-chain messaging.

Full-chain contract architecture: Supports the transfer of digital assets and simplifies cross-chain operations

Full-chain contracts are a major feature of ZetaChain, which can establish connections with external blockchains once deployed on ZetaChain. These contracts support the transfer of digital assets and adhere to the ZRC-20 token standard. The design of full-chain contracts allows them to effectively deploy popular protocols on other blockchain platforms and integrate with chains that do not support smart contracts. Gas fees incurred on the target chain are paid with the native tokens of that chain, simplifying cross-chain operations.

Cross-chain messaging system: Achieves efficient interconnection of data information between various blockchains

ZetaChain also includes a cross-chain messaging (CCM) system, which complements full-chain contracts. CCM transmits data and value messages between blockchains, with ZetaChain acting as an intermediary. The contracts of CCM relay information between the source chain and the target chain through the ZetaChain Connector API, suitable for applications requiring unidirectional and asynchronous interactions. This mechanism enhances the cross-chain capabilities of existing applications on external chains by paying gas fees with the ZETA token.

To ensure the security of cross-chain asset transfers, ZetaChain employs a burn/mint mechanism. Under this mechanism, assets are destroyed on the source chain and regenerated on the target chain, providing a higher level of security than traditional bridging or wrapping methods.

The Messari report highlights the technical features of ZetaChain.

Through these technical characteristics, ZetaChain provides a practical technical framework for the development of blockchain interoperability, highlighting its efforts to simplify cross-chain interactions and enhance security.

Understanding ZetaChain's token economic model and application scenarios before the mainnet and token launch

ZetaChain is expected to launch its mainnet and native token ZETA in the future, although the specific release date has not yet been determined. In ZetaChain's token economy, the total supply of the native token ZETA is estimated to be 2.1 billion. This estimate is based on the airdrop information released by CoinList, which mentioned that 4,200,000 ZETA accounts for 0.2% of the total token supply. Although the official total supply has not been formally announced, this estimate provides a reference for understanding the scale of ZetaChain's token economy. The design of the ZETA token primarily focuses on paying network gas fees, executing smart contract operations, and serving as a staking mechanism for network security.

Application scenarios of the ZETA token:

In the ZetaChain network, the ZETA token will allow validators and token holders to earn rewards through staking, a mechanism aimed at promoting the security and stability of the network. Currently, specific details about staking have not been released, but there are basic requirements for the hardware needed to run validator nodes, reflecting a focus on maintaining network efficiency and stability.

Supply and distribution of the ZETA token:

Details regarding the total supply or distribution plan of ZETA have not been publicly disclosed. According to the project team, ZETA will become one of the multi-chain tokens issued across multiple chains and layers, demonstrating its applicability in a multi-chain environment.

Types of tokens in the ZetaChain testnet:

The ZetaChain Athens 3 testnet features various types of tokens, showcasing the diversity of its ecosystem:

1. Native ZETA token: The native token ZETA of ZetaChain is primarily used to pay transaction fees and serves as a staking token. ZetaChain nodes are built on the Cosmos SDK framework, emphasizing the efficiency and scalability of its network.

2. Wrapped ZETA (WZETA): ZETA can be converted into WZETA, a wrapped form of the token primarily used in liquidity pools within ZetaChain. These tokens can be paired with local GAS tokens from connected blockchains (e.g., gETH), increasing liquidity and transaction convenience.

3. Tokens from external blockchains: Local GAS tokens from connected blockchains (such as gETH, tMATIC, tBNB, and tBTC) are presented on ZetaChain in the form of ZRC-20 tokens. ZRC-20 is an extension of the ERC-20 standard, allowing users to deposit and withdraw tokens from ZetaChain.

Through this series of token economic structures and ecological diversity, ZetaChain aims to provide a comprehensive framework for cross-chain transactions and interoperability, promoting efficient and secure asset flow and collaboration between different blockchain systems.

ZetaChain will continue to enhance blockchain interoperability, but its future development status still needs attention

ZetaChain is at a critical juncture in accelerating its development in the field of blockchain interoperability, facing a complex and ever-changing market competitive environment. This competition arises not only from the rivalry between single chains and modular blockchains, such as the advantages of Ethereum's rollup solutions over cross-chain ecosystems in certain aspects, but also from various intrinsic market competitions. In this context, ZetaChain strives to establish its market position, especially in the seamless connectivity and accessibility of Web3 applications.

ZetaChain's infrastructure combines L1 blockchain, Cosmos SDK, and Tendermint consensus algorithm, aiming to provide developers with extensive blockchain connectivity and interaction capabilities through full-chain smart contracts and cross-chain messaging functionalities. This capability encompasses various platforms, including those that do not support smart contracts.

As a chain based on delegated proof of stake, ZetaChain promotes the decentralization process of the network through its native token ZETA. The functions of ZETA are not limited to securing the network and paying gas fees; it is also the primary medium for value transfer within the network. As ZetaChain gradually approaches the launch of its mainnet, it is expected to play an important role in promoting blockchain interoperability and enhancing the functionality of a broader ecosystem.

However, facing the challenges of mainstream adoption, ZetaChain, as a relatively new L1 project, has yet to launch its mainnet, which exposes it to many typical challenges encountered by blockchain projects. These challenges involve not only technical implementation and ecosystem building but also competition with existing strong competitors.

ZetaChain's development roadmap focuses on enhancing user and developer engagement, including improving chain integration, expanding interoperability among different dapps and asset types, and providing better support tools for full-chain dapp development. At the same time, the ZetaChain team is also working to improve the security and efficiency of the network to adapt to the ever-changing market demands.

In this competitive process, ZetaChain needs to highlight its uniqueness, such as its architecture, validation mechanisms, or transaction efficiency, to differentiate itself from other competitors like Axelar, LayerZero, and THORChain. The success of ZetaChain will depend on its ability to create unique value in the market to attract and retain users and developers.