Authored by Zensei, an intern at ZetaChain focused on research, developer experience, and exploring the edges of interoperability.

TL;DR Most interoperability is built on top of siloed chains, fragmenting both user and developer experience. ZetaChain takes a different approach — embedding cross-chain logic directly into a Layer 1 that unifies all chains, including Bitcoin. This piece explores why the future of crypto is Universal.

The blockchain ecosystem has evolved from Bitcoin into a vibrant multichain landscape, each network offering unique strengths. While specialization has driven innovation, it’s also created deep fragmentation. Most interoperability solutions like bridges, messaging protocols, and intents are layered on top, improving connectivity but adding complexity and risk.

ZetaChain takes a fundamentally different approach: a Layer 1 blockchain with native cross-chain logic built into its consensus, connecting all chains, even Bitcoin. This piece revisits interoperability from first principles and explores why the future of crypto starts at the base layer.

The Nature of Blockchain Fragmentation

Blockchains evolved as sovereign systems: Bitcoin pioneered decentralized value transfer, Ethereum introduced general-purpose smart contracts, and newer networks like Solana, Avalanche, and Cosmos pushed performance boundaries. But with sovereignty came silos.

Fragmentation costs include:

• Capital Inefficiency: Over $90B in DeFi TVL is spread across siloed ecosystems with limited liquidity reuse, according to DeFiLlama.

• Developer Overhead: 34% of developers now build on multiple chains, yet the tools, environments, and smart contract coordination remain fragmented.

• Security Risks: $2B lost in bridge hacks in 2022 alone (accounting for 69% of total funds stolen that year) underscores the risk of bolt-on interoperability.

• Composability Limits: DeFi thrives on intra-chain composability. Cross-chain logic often requires cumbersome workarounds.

• User Experience Friction: Managing multiple wallets, bridges, and gas tokens leads to poor UX and low mainstream adoption.

Why haven’t we solved this yet? The problem is in architecture, not execution. You can’t duct-tape chains together and expect them to behave as one.

Interoperability: The First-Principles Framework

True interoperability must do more than connect endpoints. It must coordinate across them and preserve the integrity and unique strengths of each diverse network. Here’s a minimal set of required properties:

Trust-Minimized Security

The trustlessness that underpins blockchains should extend to the mechanisms that connect them. A robust interoperability solution eliminates centralized intermediaries or trust-based relays. Data verification between chains can rely on cryptographic proofs, enabling each chain to independently validate external inputs.

Standardized Communication and State Awareness

Effective interoperability requires standardized protocols for information exchange and state awareness across chains. A universal communication layer allows networks to interact consistently, while state awareness enables protocols to observe and react to events without manual orchestration. These capabilities form the foundation for cross-chain composability where applications can span multiple networks cohesively.

Atomic Execution

Atomic Execution guarantees that multichain transactions either complete fully or fail completely. This ensures users and protocols are never left in inconsistent or vulnerable states. Mechanisms such as Hash Timelocks and Coordinated Commit Protocols help achieve this, preserving consistency and predictability across systems that operate under separate consensus models.

Chain Sovereignty

A chain shouldn’t need to implement special-case code or hard forks just to accommodate foreign chains. A thoughtful interoperability solution should integrate with existing blockchains as they are, leveraging native features rather than requiring protocol changes. Preserving sovereignty ensures that interoperability strengthens diversity rather than enforcing uniformity.

Scalability

As adoption grows, interoperability must scale alongside it. Cross-chain transactions should not introduce excessive latency or cost, and uninvolved chains should not be burdened with unrelated coordination. A well-designed system ensures that cross-chain interactions are as efficient and performant as single-chain operations.

Developer Experience

A multichain developer experience should not burden builders, but rather, empower them with new possibilities and accelerate user adoption.

Together, these elements offer true interoperability and the feeling of a single chain experience.

Current interoperability approaches and their trade offs:

Interoperability has driven some of the most significant technical innovations. However, most solutions still operate around the problem rather than addressing it at its root. Here’s how the landscape has evolved:

Bridges

Bridges were the earliest attempt at solving fragmentation. By locking assets on one chain and minting wrapped equivalents on another, bridges like Wormhole, Synapse, and cBridge created the Interop 1.0 era for cross-chain liquidity and asset transfers.

Modern implementations improved speed and cost. Stargate, for instance, uses a pool-based design to support native token swaps with deep liquidity. Circle’s CCTP enables USDC movement between chains using a burn-and-mint model, removing the need for wrapped assets. Bridge aggregators like LI.FI help optimize routing, cost, and speed by aggregating many bridge types.

However, some bridges are still limited in that they rely on external multisigs or custodians, lack atomicity guarantees, and require deep liquidity on both sides, fragmenting markets. Bridges are infrastructure, not environments. They can move assets from A to B, but not logic, state, or composability.

Messaging protocols

Messaging systems like LayerZero, Axelar, Hyperlane, and Wormhole allow applications to pass payloads such as data, instructions, and intents between smart contracts on different chains. Key innovations include omnichain token frameworks (like OFT, NTT, and ITS) and verification layers such as oracle-based relayers, LayerZero’s Decentralized Verifier Networks (DVNs), Hyperlane’s Interchain Security Modules (ISMs), and Axelar’s Amplifier framework.

While messaging protocols are more flexible than bridges, they do require developers to manage asynchronous logic and state reconciliation across chains. For most simple use cases like value transfer e.g., mint on chain A → reflect on chain B, this is straightforward. However, for more sophisticated applications such as cross-chain lending, the lack of a shared execution environment makes development and coordination very difficult.

Without a shared state or execution, cross-chain logic becomes a distributed systems engineering project where you need to manage exponential growth in asynchronous messages between chains rather than the more familiar simpler synchronous smart contract model offered by a single chain development experience.

Chain Abstraction

Chain abstraction shifts the focus from infrastructure to UX. It doesn’t solve interoperability at the protocol level — it just hides it. Rather than connect chains directly, these solutions optimize user and app experience through intent-based models and smart account layers.

Intent examples include Across, Relay, and Mayan for transfers, trading, and newer use cases like lending and onchain governance. Projects like Superform and EtherFi allow users to manage positions across chains from a single interface. LayerZero’s lzRead provides cross-chain state access, enabling contracts to verify ownership and fetch external data. Projects like UniversalX, OneBalance create smart account layers using standards like ERC-7683 to offer a unified wallet and log in experience.

The constraint however is that these chain abstraction approaches still rely on the underlying bridge solutions and messaging layer. While they may improve UX, chain abstraction solutions are not infrastructure and do not provide native execution

Rethinking the Architecture

To truly unify chains, interoperability must be a base-layer primitive part of the blockchain itself, not an external patch. That’s the ZetaChain thesis.

ZetaChain: The Interoperable Layer 1

ZetaChain is a Proof-of-Stake L1 blockchain where interoperability is built into consensus. It acts as a Universal execution environment, validating and finalizing cross-chain transactions natively.

Unlike approaches that rely on third-party relayers, ZetaChain serves as a universal hub that reads and writes to heterogeneous blockchains including Bitcoin, Solana, Ethereum, and more, through a single and unified environment. All cross-chain transactions are validated and finalized by ZetaChain’s own validator set via the CometBFT consensus engine with no reliance on multisigs or external light clients.

Native Cross-Chain Execution with Universal Smart Contracts

ZetaChain empowers developers to write a single smart contract that can receive tokens and function calls from any connected chain, and initiate outbound transactions to any other. These contracts, called Universal Smart Contracts, natively orchestrate multistep logic across blockchains without the need to deploy separate contracts or sync state manually.

Assets are transferred in their native form on ZetaChain. Instead of relying on wrapped tokens, ZetaChain uses custody-backed ZRC-20 tokens, enabling seamless transfers of native BTC, ETH, or USDC across chains. Unified liquidity pools and validator-managed token custody underpin this design.

This same infrastructure also powers Universal token and Universal NFT standards, allowing ERC-20s and ERC-721s to move fluidly across chains, retain consistent metadata and IDs, and revert safely if a transfer fails, all without separate bridge layers or canonical token setups.

Seamless User and Developer Experience

For users, ZetaChain enables multichain interaction from a single chain. Transactions can be initiated from any connected network via Gateway, with gas abstraction handled by ZetaChain. Users don’t need to manage cross-chain fees, swap gas tokens, or switch wallets and networks.

For developers, the experience is just as smooth. ZetaChain runs a Universal EVM that supports standard solidity development tools. The UniversalKit provides ready-to-use components for swaps, balances, staking, and Bitcoin wallet integration. Developers can deploy once on ZetaChain and launch everywhere, reaching users across any connected chain — no coordination of traditional messaging or bridging setups required.

ZetaChain’s Unique Role in the Interop Stack

By embedding interoperability into its core L1 architecture and offering native execution, ZetaChain presents a fundamentally different model from other cross-chain solutions.

Unlike bridges that focus primarily on asset movement, ZetaChain enables programmable cross-chain arbitrary logic through a unified environment. This eliminates the need for wrapped tokens and separate bridge transactions that fragment the user experience.

Unlike point-to-point messaging systems that distribute application logic across chains, ZetaChain unifies orchestration while maintaining native connections to all networks. This reduces the complexity of state management and error handling in cross-chain applications.

And while abstraction layers aim to hide chain complexity from users, ZetaChain provides both user abstraction and the underlying infrastructure to ensure security and atomicity at the consensus level.

Smart contracts on ZetaChain inherit built-in access to all connected chains while maintaining full sovereignty over their logic, assets, and execution flow. With built-in access to assets, data, and gas across chains, ZetaChain delivers a streamlined experience that empowers developers to build powerful Universal Apps with minimal friction and people to access them from anywhere in Web3.

The path forward

The next frontier of blockchain isn’t about connecting more chains. It’s about seamlessly coordinating them. Native composability across ecosystems is no longer a dream.

With ZetaChain, a loan on Base can be secured by native collateral on Solana and a DAO vote on Ethereum can trigger an onchain action on Bitcoin. A Universal App can reach every major network by deploying just once. This kind of composability allows developers to combine technologies across ecosystems to build applications no single chain could support on its own.

The measure of progress won’t be how many chains we connect, but how easily ideas can move across them. The future of crypto isn’t multichain. It’s Universal — and it’s already being built.

References:

1. 2024 developer report by Electric Capital: https://www.developerreport.com/developer-report?s=36-of-total-developers-in-2024-work-on-multiple-chains

2. Vulnerabilities in Cross-chain Bridge Protocols Emerge as Top Security Risk: https://www.chainalysis.com/blog/cross-chain-bridge-hacks-2022/

3. The Complete Guide to Crosschain Interoperability: https://across.to/blog/The-Complete-Guide-to-Crosschain-Interoperability

4. Interop 3.0 — Fundamental is Built, Its Time for Application: https://4pillars.io/en/articles/interop-3-time-for-applications

5. Waters Wavelength Podcast: Deutsche Bank’s Boon-Hiong Chan: https://soundcloud.com/waterstechnology/episode-286-deutsche-banks-boon-hiong-chan

6. Blockchain Interoperability Challenges Explained: https://chain.link/education-hub/blockchain-interoperability-challenges

7. Explained: The Ronin Network Hack (August 2024): https://www.halborn.com/blog/post/explained-the-ronin-network-hack-august-2024

8. Wormhole token bridge loses $321M in largest hack so far in 2022: https://cointelegraph.com/news/wormhole-token-bridge-loses-321m-in-largest-hack-so-far-in-2022

9. Cross-Chain Interoperability Report 2024: https://drive.google.com/file/d/1ckJUcwlj4h2ZvMI-fBK50hBpjBoYsqxU/view

Categories