Dismantling ZetaChain: Why is 2024 said to be a great year for the “chain abstraction” track?

Author: Hao Tian; Source: Chain View

Recently, cross-chain interoperability L1 public chain The airdrop released by @zetachain has attracted market attention on the "chain abstraction" track. What is chain abstraction, what are the difficulties in full-chain interoperability, and what are the core features of zetachain? In my opinion, if modularization is a "vertical integration" strategy, then chain abstraction is a "connection horizontal" strategy, which is one of the key tracks that must be paid attention to in 2024. Why, next, let me talk about my understanding:

Whether it is vertical or horizontal, it is an "alliance" strategy. Modularization is to turn idle The blockchain development capabilities are combined in the form of modular components to compete with monolithic comprehensive public chains, while the chain abstraction connects the liquidity scattered among chains in the form of interoperability integration to enhance the experience of developers and users.

What is chain abstraction? The co-founder of Near threw out the concept of "chain abstraction". Simple understanding: modularization separates the different functional layers of the blockchain into settlement layer, DA layer, execution layer, rollup layer, etc. This greatly stimulates the development of the chain construction market. Prosperity, but at the same time, it will make liquidity, applications, users, etc. between chains more dispersed, which will bring huge barriers to ordinary users and even developers.

Chain abstraction is to solve interoperability problems such as cross-chain communication, asset transfer, and cross-chain smart contract calls between different chains by building a universal all-purpose smart contract. .

There are two main common chain-wide interoperability problems:

1) Non- Communication issues between similar smart contract chains, for example, how to establish effective communication connections between UTXO non-smart contract platforms such as Bitcoin and account smart contract platforms such as Ethereum?

2) The problem of non-Wrap method transfer of cross-chain assets. The Wrap method is a common cross-chain bridge solution, but there are frictions such as handling fees in such solutions. The problem of huge capital loss is usually accompanied by greater centralization risk of asset multi-signature management.

So, can zetachain solve these two problems, and how?

zetachain is a proof-of-stake blockchain built on the Cosmos SDK and Tendermint PBFT consensus engine. It can be regarded as an application-specific zone for interoperability. The blockchain framework, commonly known as "chain within a chain", adopts a "blockchain of blockchains" (BOB) approach, in which specific chains are embedded into the full chain environment to provide data, network, consensus, incentives and contract layers. framework to achieve interoperability between blockchains.

The core architecture of zetachain is mainly divided into: verifiers, observers, and signers.

Verifiers can verify the consensus of the maintenance chain by pledging ZETA tokens. For example, the state transfer of other chains submitted by observers needs to be confirmed by the vote of the verifiers. Therefore, certain token incentives can be obtained; the observer's responsibility is to monitor the full nodes of the external chain to synchronize specific transaction logs, transfer events and status information, and synchronize the information to the verifier who determines the consensus; the signer is mainly responsible for external The chain performs identity verification. When it comes to asset circulation requests, signers can participate in asset signing to ensure safe cross-chain interoperability of assets.

Based on these basic frameworks, Zetachain can effectively solve the above-mentioned full-chain interoperability issues:

1) When it comes to asset circulation between the EVM chain and UTXO model chain, since the Bitcoin network does not have smart contracts, the only effective way is to deploy light nodes and perform MPC multi-party signature operations based on the ECDSA signature algorithm. Since ZetaChain can hold TSS private key and address, so you can use smart contracts on Zetachain to connect and manage local assets on the Bitcoin network. Throughout the process, ZetaChain observers must effectively track and manage UTXO on Bitcoin. The core logic is to use Bitcoin as an asset settlement layer to achieve effective control and circulation of assets through a multi-signature algorithm;

2) The current common cross-chain bridge solutions are based on the logic of locking assets in chain A and issuing additional assets in chain B. This interactive premise will not only lock the liquidity of a single chain, but also Asset loss occurs during the wrapping process, and it is often criticized for its asset loss when it comes to DeFi-related application scenarios. In response to this, ZetaChain built a full-chain Ominichain smart contract and created the ZRC20 token standard. This enables ZetaChain’s full-chain asset circulation to be based on non-Wrap status. Popular understanding: Zetachain is equivalent to the chain-in-chain settlement layer in a full-chain environment. Chain A initiates an asset transfer to chain B, which is equivalent to chain A first "settling" with Zetachain, and then the settlement status is synchronized to chain B, and chain B will receive This corresponds to the use rights of ZRC20 tokens, and there is no Wrap asset loss and friction in the entire process.

3) The atomic transaction feature based on smart contract management enables external links to use native assets. For example, a cross-chain AMM decentralized exchange can be implemented based on this feature. The assets on each chain are first paired with ZETA. If you want to exchange asset X on chain A and asset Y on chain B, you can first Use the fund pool on the A chain to exchange X for ZETA, then transfer the ZETA cross-chain information on the A chain to B, and then convert the ZETA on the B chain into Y through the Y/ZETA trading pair. This is very different from trading on different chains and then trading across chains again. It directly reduces transaction slippage and cross-chain losses, which is of great benefit to the cross-chain deployment and application of DeFi protocols.

The above

Through the technical analysis of ZetaChain, everyone can more or less understand To the significance of "chain abstraction" to the current blockchain ecology, for B-side developers, it can reduce the cost of deploying various protocols across chains and manage liquidity in a full-chain environment, which not only unifies market management but also reduces costs. Security risk exposure, especially in the multi-chain era of modular combination and assembly, the full-chain interactive operability solution will become a necessary supplement; for C-end users, chain abstraction will change the relationship between users and various back-end protocols Simplified into users and DApp applications, or even users interacting directly with the wallet can achieve a full-chain interactive experience. The wallet can serve as a solver processing center for the user's complex intent intent.