What is Layer0 blockchain? Layer0 application and project introduction

What is Layer 0?

Layer 0 (Layer 0 blockchain) is the underlying infrastructure built below Layer 1. The goal of Layer 0 is to increase scalability, interoperability, and specialization between different blockchains.

There are currently some multi-chain applications trying to use different architectures to achieve this Layer 0 goal. This article will introduce three practical examples of Layer 0, as well as two actual constructions on Layer 0. Enjoy Layer 0 0 project with ecosystem benefits.

Review Layer 1 - Layer 3

The first layer: Layer 1 is the basic blockchain that can interact and distribute data, such as Bitcoin, Ethereum, BNB chain, etc.

Layer 2: Layer 2 is a protocol built on top of Layer 1 and is designed to improve the performance and output of the blockchain. Layer 1 transactions can be processed by additional Layer 2, and the results after processing are sent back to the base layer of Layer 1 for permanent recording. The Layer 2 expansion solution aims to reduce the load on the base layer blockchain, increase processing speed, and solve scalability issues. Through the interaction between Layer 1 and Layer 2, blockchain can achieve scalability without compromising security. To learn more about Layer 2, please refer to previous articles published on Gate Learn.

The third layer: Layer 3 is built on Layer 2 and can provide stronger scalability and customizability. It is currently more commonly used by projects that require frequent on-chain interaction, allowing developers to customize according to their needs. Deploy the game chain on Layer 3 to run specific Dapp game projects to adapt to high-frequency on-chain interactions or improve the user's wallet experience. If you want to know more about Layer 3, you can refer to the articles previously published on Gate Learn.

Application of Layer 0: Taking Polkadot as an example

We use Polkadot as an example to examine how Layer 0 infrastructure operates and what advantages it has. Polkadot's Layer 0 works like this: a relay chain (Relay-chain) is used as the main chain to be responsible for the security of the parallel chain (Parachain); there are many parallel chains running on the relay chain, which are used for specific Layer 1 side chain of the application; in addition, there is a network layer protocol that allows the transmission of cross-consensus messages (XCM), allowing communication between consensus systems and greater interoperability.

Source: Polkadot Blog

Advantages of Polkadot Parachain Design

According to Polkadot official documentation, the main advantages of parachain design are ：

1. Scalability:

The relay chain on Polkadot focuses on messaging and security, which allows the parachain to only serve as a scalable solution and does not require Responsible for the execution of smart contracts; this structure also provides parachains with greater flexibility and scalability, as they can be customized and optimized for specific applications or use cases without being restricted by smart contracts .

2. Specialization:

Polkadot itself only focuses on its basic work as Layer 0. Other L1 blockchains have to juggle their security and scale with DApps, but Polkadot and its dedicated blockchains (parachains) can work together.

3. Interoperability:

Since all parachains are built on a framework called Substrate and connected to Polkadot’s architecture, they can communicate and trade natively assets and form rich cross-chain interactions and connections. The Polkadot XCM message format also mentioned above allows parachains to interact with each other without going through a relay chain, such as sharing assets.

Polkadot Ecological Layer 1 Projects

The more representative Layer 1 parachain projects in the Polkadot ecology are all projects that won the first round of slot auctions in the early days and have developed relatively quickly. For a long time, the consensus in the community is relatively strong. The following is an introduction to the three Layer 1 projects in order of the current TVL size.

Astar
Astar Network (formerly Plasm) is the most popular smart contract platform in Japan. As Polkadot is L0, the relay chain does not support the development and deployment of smart contracts, and Astar just fills this position. Astar supports two smart contract solutions: Wasm (WebAssembly) and EVM. It is the first parachain in the Polkadot ecosystem to support the Ethereum ecosystem, and includes Layer 2 extension solutions, such as OVM (Optimistic Vitual Machine).

In order to attract developers to build in the Astar ecosystem, Astar Network also launched a dApp staking plan. In the Astar network, for each block generated, a portion of the inflation tokens will be allocated to dApp pledges; the rewards generated by these pledges will be distributed to dApp developers and stakers.

Astar is built on Polkadot in this way: the relay chain using Polkadot is responsible for cross-chain interoperability, data storage and transaction verification; while the EVM layer is responsible for executing smart contracts and is compatible with Ethereum, allowing Developers build and deploy dApps.

Moonbeam
Moonbeam is an Ethereum bridge. It is mainly used to connect smart contracts written in Solidity on Ethereum to the Moonbeam chain with some changes, so that projects in the relay chain and the entire Polkadot ecosystem can be connected. Cross-chain interoperability. In 2020, the well-known DeFi service SushiSwap deployed a fork on Moonbeam; in 2022, Polkadot's native USDT was launched on Moonbeam.

The test network of the Polkadot network is Kusama. The general developer's usage process is as follows: first use Moonriver on the Kusama test network (Moonriver has roughly the same function as Moonbeam and is a pilot project on Kusama) to test and verify The smart contract is then sent to Moonbeam on Polkadot; Moonbeam can execute EVM instances on the Polkadot chain and also supports the ERC-20 standard and DOT protocol.

Acala
Acala is a financial service platform built on the Polkadot network, providing three main services: AcalaSwap (is an AMM used to exchange coins, LPs can also open a pool to inject liquidity and charge handling fees ), Honzon (is a stablecoin protocol), Homa (is a liquidity staking protocol). Acala is considered Polkadot’s DeFi hub and is compatible with Ethereum, allowing developers to easily move DeFi projects from Ethereum to the Acala network. It has a dual-token system, including a local decentralized stablecoin (aUSD) and ACA (the governance token of the Acala network). The above three main services can meet the needs of parachain mortgage, cross-chain liquidity creation, and multi-chain asset mortgage. , the issuance of algorithmic stable currency aUSD and other needs.

Polkadot’s Delivery Progress and Limitations

With the release of the final version of Polkadot 1.0 in July 2023, it marks that the functionality of the Polkadot Relay Chain has been delivered. In the long term, what Polkadot wants to become is a more general ecosystem that generates, utilizes, and sells block space (i.e., Polkadot's Coretime).

The following are some current data of the Polkadot ecosystem: 1.580 ecosystem projects: including 90 parachains, 300 Dapps, and 190 Substrate-based blockchains; 2. The most important parachain at present The project is related to the launch and deployment of centralized stablecoins Tether (USDT) and Circle (USDC). There is up to US$250 million USDC in Polkadot’s Asset Hub; 3. There are nearly 2,000 monthly active developers in the entire ecosystem and 83,000 monthly active users.

In addition, in terms of interoperability and cross-chain bridge applications, Bridge Hub and Identity chain, Asset Hub and Collectives chain are all noteworthy infrastructure in the Polkadot ecosystem. In December 2023, the trustless bridge Snowbridge, which has been deployed to the production environments of Asset Hub and Bridge Hub after a security audit, is expected to be enabled shortly after the new year. The underlying encryption method of the trustless cross-chain bridge adopts special-purpose encryption protocols developed internally by the Web3 Foundation research team. They are integrated with XCM and allow arbitrary contract interaction. In the future, they can be used for various solutions with Ethereum and Moonbeam networks. . Trustless provides better scalability and efficiency, with the limitation that the underlying network security is weak.

Layer 0 projects with similar goals: Cosmos

Similar to Polkadot, Cosmos is also one of the first projects to propose building a cross-chain ecosystem and has a similar Layer 0 vision. According to the Cosmos official white paper, the Cosmos ecosystem can achieve interoperability between blockchains. Assets can be issued and controlled by different validators, but can be moved and exchanged seamlessly between blockchains without relying on trust. third party.

Advantages of the Cosmos Ecosystem

Tendermint Core: There are many zones on Cosmos, all zones are supported by Tendermint Core, which is a high-performance and secure consensus engine that can Curb malicious behavior. Tendermint Core’s BFT consensus algorithm is ideal for scaling public proof-of-stake blockchains. Blockchains with other consensus models, including proof-of-work blockchains such as Ethereum and Bitcoin, can use adapter zones to connect to the Cosmos Network. Tendermint was later renamed Ignite and was split into two entities due to different ideas of founder Jae Kwon, with Kwon serving as the CEO of the other entity, NewTendermint.

Cosmos Hub: The first zone on Cosmos is called the Cosmos Hub. Cosmos Hub is a multi-asset proof-of-stake (PoS) blockchain network governed by simple mechanisms that allow the network itself to adapt and upgrade. Additionally, Cosmos Hub can be expanded by connecting other regions. Cosmos Hub is responsible for token transfers between all regions and will track the total amount of all tokens; each Hub isolates the risk of each region; anyone can connect a new region to the Cosmos Hub, so the region allows future and new blocks Chain technology solutions are compatible.

IBC cross-chain protocol: Hub(s) and regions in the Cosmos network communicate with each other through the IBC protocol. The IBC protocol is a virtual protocol used to transfer blockchain data, similar to UDP or UDP in the Web2 network TCP protocol.

In addition to the consensus engine Tendermint Core mentioned above, the first regional Cosmos Hub on Cosmos, and the IBC cross-chain protocol, there is also the Cosmos SDK development framework. These infrastructures constitute the Cosmos ecosystem.

Layer 1 projects in the Cosmos ecosystem

As of now, Coingecko’s data shows that there are 10 projects in the top 100 market value in the Cosmos ecosystem; there are more than 260 projects built in the Cosmos ecosystem. It can be seen that Cosmos technology has still given birth to many strong projects. This may be because Polkadot and Cosmos have chosen different technical development paths; Polkadot shares security through the design of relay chains and parachains; and Cosmos Hub It is not responsible for information exchange and security on the chain. According to this article previously published by Gate Learn, the Cosmos ecosystem is more like a radioactive mesh structure. Each application chain needs to be responsible for its own security. This design makes the Cosmos ecosystem DeFi projects have greater flexibility and autonomy.

Injective
Injective is a modular, out-of-the-box interoperable blockchain that can be used to build fully decentralized order books, predict markets, or provide other on-chain finance dApps for services. Injective is built using the Cosmos SDK and enables instant transactions using the Tendermint proof-of-stake consensus framework.

In terms of interoperability, Injective supports seamless cross-chain transactions between IBC-enabled chains such as Ethereum, Moonbeam, and CosmosHub, as well as Wormhole integration chains such as Solana and Avalanche. Since Injective supports cross-chain transactions with Ethereum and all chains that support IBC, this means that tokens created on Injective can appear on multiple networks by default.

In terms of cross-chain ecological compatibility, Injective supports CosmWasm, a new smart contract platform built for the Cosmos ecosystem. This means developers can easily launch their own smart contract-powered dApps on Injective. Smart contracts running on other chains that support CosmWasm can also be seamlessly migrated to Injective.

Cronos
Cronos is an Ethereum-compatible Layer 1 blockchain built on top of the Cosmos SDK. Originally, the crypto network used Cronos.org, an open source public chain, to provide financial services. Later, in order to expand the adoption of DeFi, NFT and GameFi in vertical fields, the project team created Cronos, a parallel-running blockchain. This new chain was also created to make the deployment of dApps and smart contracts cheaper and reduce carbon emissions.

Cronos is compatible with EVM, Solidity and all EVM tools work out of the box, and has Cronos Play, a set of developer tools for Web, Unity, Unreal and C game developers, which can easily develop GameFi projects .

The biggest feature of Cronos is that it is directly supported by Crypto.com: Cronos Ecosystem Funding Program, which is an early program to support Cronos by guiding initial product development and providing technical support; in addition Cronos Accelerator, a program for promising dApp developers.

Celestia
Celestia is a standout project in the Data Availability track. It is a modular network focused on ordering transactions and verifying the availability of published data.

Celestia uses a method called Data Availability Sampling (DAS), which randomly samples different block segments multiple times. Each successful sampling will increase data availability confidence and the effectiveness of the block, and this The approach is also scalable, as more light nodes join the network to sample data, the block size increases, allowing for higher throughput. Its technological innovation will attract 55 million in financing in 2022. Ethereum has stated that it wants to focus on data availability and security in the future. Compared with Ethereum’s DA layer, Celestia has significantly reduced data costs and is therefore considered a threat to Ethereum.

The limitations and future direction of Cosmos

Similar to the fact that Polkadot’s most important project asset is the stable currency ($250 million USDC), Cosmos’ success in 2022 is also due to the stability of the Terra chain ecology Coin UST is deployed on Cosmos, and at that time its market value ranked fourth in the stablecoin ecosystem. As you can imagine, the death spiral of Terra decoupling in May 2022 brought a severe test to Cosmos, driving the ATOM token to plummet.

The Cosmos ecosystem subsequently began to make efforts in modularization. The current development status is that AtomOne, the forked network of Cosmos Hub, will be launched on the mainnet on February 27, 2024. The background of this incident is that after the ATOM token inflation rate proposal was passed by a slight margin last year, founder Jae Kwon expressed dissatisfaction with the result and angrily proposed a fork. From this incident, we can observe that Cosmos currently has at least three major problems:

1. Centralization problem: In addition to founders being able to counter community proposals through forks, monitoring node operators (such as Chainflow and other individual verification According to the Nakamoto coefficient of equity pools such as server operators) and LIDO (as of the time of writing this article), the Cosmos ecological score is 7, Ethereum is 2, Solana is 20, and Polkadot is 92. This data can also reflect the Cosmos ecosystem. It is relatively centralized.

2. High inflation rate and network security cost: The earliest research by Blockworks Research showed that Cosmos’ $ATOM token has a high inflation rate, which not only means that it is unsustainable in terms of token economics This also affects the cost of network security paid by Cosmos, prompting the team to launch relevant proposals;

3. Ecological project governance and token liquidity are both fragmented: an example of the former is the renaming and separation of Tendermint, which can easily cause chaos in the ecosystem; the latter affects user experience and thus the adoption of Cosmos.

What is the future direction of the Cosmos ecosystem? According to Cosmos Hub head Billy Rennekamp shared in an AMA, upcoming features of Cosmos Hub include Vega upgrades, new modules AuthZ and FeeGrant, and updated network stability and security. In addition, there is IBS packet routing function. Gravity DEX and Emeris mark the development of the Cosmos ecosystem, but it also raises some discussions about the credibility and balance of the ecosystem. The implementation of inter-chain security and ATOM features will further enhance the value and security of Cosmos Hub. In addition, NFT and IRISnet projects on Cosmos are also in progress, which will bring more applications and value to the ecosystem. These upgrades and features will improve user experience and are expected to spur growth and adoption of the Cosmos ecosystem.

Conclusion and Future Outlook

The term Layer 0 was first known because Gavin Wood’s preaching and the use of this term in the Polkadot Parallel Chain Blog. However, in Polkadot’s 2023 year-end summary, Polkadot and Layer 0 are no longer compared. This may be because both Polkadot and Cosmos have encountered similar problems in the development of their ecosystems: except for Ethereum’s willingness to integrate Polkadot into the protocol, other Layer 1s seem unlikely to do so. Similarly, the network security of Cosmos is also protected by the native token ATOM. Ultimately, everyone hopes to accumulate Layer 1 tokens to achieve more on-chain interactions. Network security relies on the allocation of sequencers, how to redefine these roles (for example, XAI solves the problem of verification incentives through Sentry nodes), and how to develop modular and composable infrastructure in a cross-chain ecosystem. These are the topics of 2024 Real problems encountered on Layer 0 tracks. If Polkadot and Cosmos cannot deliver solutions that satisfy the community, then the path to these problems may not be called Layer 0, but something else.

The future of universal cross-chain protocols

There are also some other projects competing in the cross-chain track. Wormhole is a cross-chain protocol for universal messaging between blockchains. It is neither a blockchain nor a token bridge itself. It provides tools to create cross-chain exchanges, implement NFT governance, or build cross-chain games.

Another similar cross-chain protocol is LayerZero using Super Light Node (ULN), which is somewhat similar to Wormhole's design. The CEO of LayerZero believes that the way systems such as Wormhole operate is to have control components located in the "system", and only trusted managers can upgrade them (requiring multi-signature on 13/19); LayerZero also uses external keys to manage dApps. parameters and rely on the key manager not to do evil. The difference is that Wormhole's dApp has no control and cannot prevent the "system" from forcing upgrades and changing the underlying messaging protocol; LayerZero allows each dApp to choose a set of security parameters that cannot be changed. This means that LayerZero as critical infrastructure is immutable, open source, and always owned by its users.

In addition to the light node protocol developed by Polkadot and the IBC cross-chain protocol of Cosmos, there will be more general cross-chain protocols like Wormhole and LayerZero in this track in the future, providing more efficient, flexible and more Safe solution.

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