Zetachain- blockchain enables omnichain interoperability of any value or data

Zetachain

6 min readNov 26, 2022

Introduce

After the recent volatility of the cryptocurrency market, I think this period has many people quite confused. From personal experience I feel this is always one of the risks we face in this market, but overall such purification is necessary to provide a cleaner space for all. Today when many platforms do not meet the needs of users and only a few shows the ability in the market. So in the content of this article I want to share a project that has stood out recently as well as a lot of information around the ongoing project, which is Zetachain.

What is ZetaChain?

ZetaChain is a platform, public blockchain using omnichain technology — a complete crosschain solution that helps us complete all the steps in just one process. The project is a Layer 1 blockchain using the Proof of Stake consensus mechanism, capable of interoperability among many other blockchains.

It solves the problems of “cross-chain”, “multi-chain”, aiming to open up a cryptocurrency ecosystem that anyone can access and use. ZetaChain supports a multi-chain cryptocurrency ecosystem and is very flexible. With ZetaChain, users and developers can move between any blockchain and use DeFi projects in any sector. ZetaChain the only public blockchain with smart contracts that can access and manage assets, data, and liquidity on any chain. In this post, we review key takeaways about the upgrade and what it means for web3 developers and users.

Omnichain Smart Contracts

With Omnichain Smart Contracts, developers are now able to write and deploy EVM-compatible smart contracts on ZetaChain that have access to ZetaChain’s universal connectivity. This means developers can leverage the existing robust Ethereum smart contract ecosystem to build truly interoperable applications on top of ZetaChain — as if everything were on a single chain. Omnichain Smart Contracts enable a new paradigm of application building as ZetaChain easily manages and orchestrates native assets on all connected chains in a single place.

ZetaEVM (zEVM) and the ZRC-20 Standard

ZetaEVM (zEVM) is a module on top of the ZetaChain network that allows users to create and deploy EVM-compatible Omnichain Smart Contracts, which can read, write, or manage data and liquidity on any connected chain from a single place. We also introduce a new standard called ZRC-20, which enables these Omnichain Smart Contracts to manage native assets on connected chains. With ZRC-20, developers can build applications that use and transact native fungible tokens such as Bitcoin, ERC-20s, and Gas Assets, all on a single chain.

Bitcoin Smart Contracts

One trailblazing advancement made possible by Omnichain Smart Contracts and ZRC-20 is the ability for developers to deploy contracts on ZetaChain that control Bitcoin natively. In other words, ZetaChain gives Bitcoin, a largely untapped ecosystem, smart contract capabilities. These smart contracts orchestrate not only Bitcoin, but also Bitcoin together with assets and data from other chains. So users can now trade and use Bitcoin with any assets in the DeFi world without wrapping, thereby avoiding the risk of bridge/vault hacks. We expect this feature to boost growth in DeFi by orders of magnitude.

How Does ZetaChain Work?

When it comes to engaging with multiple blockchains, one common approach to dApp development is to build an app for each chain. This has the potential to become fairly impractical to maintain, particularly as the number of heavily used blockchains continues to grow. ZetaChain proposes that app developers can create a single “omnichain” app that interfaces with all other blockchains via ZetaChain. The diagram below, from the whitepaper, provides an example of what this might look like.

One Contract For All Chains:

Omnichain Smart Contracts significantly lower omnichain development overhead and have a simpler security profile compared to pure messaging. With messaging, developers must deploy individual contracts to every single chain and handle timing and race conditions, which result in substantially more attack surface and development time. With Omnichain Smart Contracts, developers can deploy a single contract that manages assets everywhere. This allows for less code (less smart contract attack surface), fewer deployments (less operational security attack surface and fragmentation), stronger transaction atomicity, and a central place to manage the state of omnichain applications.

Less Fees:

Users experience reduced gas fees because the single contract you use for transactions manages multiple native tokens. Complex logic in contracts on ZetaChain will orchestrate assets across all connected external chains through simple transfers, which minimizes total gas expenditure and slippage. On the other hand, messaging requires substantially more gas on external chains because verification and parsing of data happens on both inbound and outbound. With ZRC-20, inbound and outbound transactions on external chains are simple transfers which use minimal gas (like doing a simple Send to another address in your wallet). All real logic occurs in ZetaChain where fees are bundled for users in a single step.

Better, Safer User Experience:

Elevated volatility, slippage, and additional security risk are common pitfalls of messaging and asynchronous cross-chain development due to added timing and complexity. Instead of waiting for different messages to pass and sync between separate chains via messages, ZetaChain’s Omnichain Smart Contracts enable atomic transaction logic. Outputs like the amount received for a trade, the transfer of an asset from one address to another, etc. are immediately settled on chain as if everything were on a single chain. The result for users is lower slippage/volatility, stronger transaction guarantees, reduced attack surface, and faster completion with single-step transactions (and fees).

Theoretically, ZetaChain addresses one of the core issues that plagues bridging, by eliminating stored value being tied up in wrapped currency that can fall victim to infinite minting scams, like the $300 million Wormhole exploit that managed to draw attention even in the mainstream financial press like CNBC. There is no wrapped currency waiting to be stolen in the ZetaChain approach. They also seem to have thought through the risk of 51% attacks (explained in more detail in the shared security article linked above) and have a smart contract in place that controls ZetaChain supply. What’s less clear is how ZetaChain is going to build trust in its model of acting as an intermediary. In their model, you need to trust the blockchain you built your dApp on, the blockchain you’re connecting to, and ZetaChain as the layer in the middle that’s making it possible.

What is the ZETA token?

ZETA is the native asset, used to pay gas fees for ZetaChain smart contracts and also used to secure the PoS blockchain by bonding/staking/slashing. ZETA is also at the core of ZetaChain’s cross-chain transfers, swaps, messaging, and security. ZETA is one of the first multi-chain coins to be released natively on multiple chains and layers.

Users can directly transfer ZETA from chain A to chain B without going through bridges or other intermediaries. The mechanism that ZetaChain uses is called one-way peg.

Conclusion

When I was originally asked to keep the ZetaChain team anonymous, my initial reaction was that they must be up to something unscrupulous. Having met them, I no longer suspect that’s the case and they seem to have other reasons for remaining behind the scenes. It also lends some credibility that they’ve received funding from some key players behind Coinbase and Binance. I do think this is one of those areas where decision-makers who are building in Web3 are going to need a paradigm shift in thinking, since most of us want to know who is behind the technology we spend our IT budgets on.