ZetaChain 2.0: The First Universal Blockchain

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Today, we’re excited to introduce ZetaChain 2.0, and the first Universal EVM for chain abstraction. These upgrades, proposed and developed by the decentralized ZetaChain community, focus on the Chain Abstraction Framework (CAF). They aim to unlock new prospective use cases such as Universal Proof of Stake and Universal Apps that can manage complex interactions, apps, and assets on external chains on behalf of users.

These proposed upgrades are actively being developed by the community of ZetaChain users in the public node repository. They will only pass if the community votes to approve them through on-chain governance. This post reviews the current state of the ZetaChain protocol, and articulates both the vision and what it will take to realize ZetaChain 2.0 — the first Universal EVM for chain abstraction.

ZetaChain 1.0 Summary

ZetaChain 1.0 has been live on mainnet since February 1st, 2024. It offers a fully functional network that connects Bitcoin, Ethereum, and BNB Chain. Developers can deploy Omnichain Smart Contracts on ZetaChain’s EVM that use the ZRC-20 primitive to connect and orchestrate value and data across all connected chains without wrapping or locking tokens.

Since its inception three months ago, ZetaChain network ranks in the top five blockchains by total active users (Source: DappRadar) and generated over 100 million transactions. The ecosystem comprises more than 250 developers and partners working across infrastructure, DeFi, SocialFi, Gaming, and more, with over 5,500 dApp contracts deployed.

Last month, we launched an Ecosystem Growth Program, committing 5% of the total ZETA supply to provide grants for developers building innovative projects that advance our shared mission for chain abstraction and network development. 1% (21 million ZETA) is allocated for impactful projects that use ZetaChain to unlock the Bitcoin network.

The XP program is built to help the ecosystem understand omnichain usage and triangulate rewards for sustainable growth. May 1st marked the completion of phase one of XP. Both the Ecosystem Growth Program (5% of total supply) and User Growth Pool (6% of total supply) leverage the XP user loyalty program data to determine grants and allocations. New developments, rewards mechanisms, and grant allocations are underway and will be released in upcoming updates.

Introducing the Universal EVM Stack

ZetaChain proposed 2.5 years ago the first Universal EVM Stack to enable true chain abstraction with near-atomic omnichain interactions. With a Universal EVM, chains, assets, and data are abstracted, orchestrated, and converged for a more ideal crypto user experience. The ZetaChain stack pioneers a new frame for viewing and experiencing a multichain ecosystem. This is the Universal EVM.

Universal Apps

Apps on the Universal EVM can both natively access and be accessed from any connected chain without requiring users to switch networks. With complete EVM-compatibility, developers can use existing, robust EVM ecosystem tooling and deploy existing Solidity contracts to achieve Universal Apps — compatible with all connected chains, in just a few lines of code.

Chain Abstraction Framework (CAF)

The Chain Abstraction Framework (CAF), comprised of the ZetaClient with its Observer-Signer nodes, enables omnichain connectivity of the network to any blockchain. This framework is accessible through the Universal EVM, which is a synchronous environment that can be called from any chain, manage native assets on any chain, and access asynchronous arbitrary messaging to call contracts on other chains. Developing with the CAF offers the ability to build robust state management combined with multi-leg, multi-chain apps’ needs, all in the familiar EVM development environment. The resulting user experience is unbounded, where the majority of apps can be used entirely from any single network while the rest of the app logic can be affordably, securely, and performantly abstracted.

Universal EVM (zEVM)

ZetaChain’s Universal EVM Stack is predicated on the notion that the EVM Ecosystem, even with its persistent innovation (rise of L2 scaling technology, restaking, new EIPs, and more), does not adequately address the chain fragmentation dilemma. ZetaChain’s Universal EVM offers a general purpose platform for developers to deploy their app once and access any chains. The Universal EVM can act as the connective tissue across modular, monolithic, L2, and app-specific chains. It makes all of crypto accessible to users, regardless of where they start or spend their journey.

Universal PoS / Consensus

The Universal Proof-of-Stake (PoS) underpins the ZetaChain blockchain network by securing the system and verifying transactions. In addition to its native coin ZETA, ZetaChain will also support major cryptocurrencies on any blockchains such as BTC, ETH, and BNB to enhance its security through PoS. These additional networks and assets both strengthen ZetaChain’s security layer and offer rewards through block emissions, cross-chain transaction fees, and zEVM gas fees for securing the network.

Achieving Universal Chain Abstraction

Together, these components of the Universal EVM Stack aim to support an abstracted chain UX across crypto — whether a user is on Bitcoin, an EVM, heterogeneous L2s, or somewhere else. This approach to chain abstraction further extends the Modular Blockchain thesis for specialized layers and modules.

Not only can blockchains be modularly constructed, but also they can be converged under a Universal App that leverages the key value propositions of all of them. Similar to that of a modular chain with multiple underlying components designed to achieve a more sustainable, useful platform, a Universal App on ZetaChain can be comprised of the key or best components of many chains.

Moving into the future, Universal Apps maintain inherent compatibility with all other new chain connection upgrades into perpetuity. Universal Chain Abstraction is the core goal of the ZetaChain network, providing a composable and sustainable way to abstract blockchain technology from user experience.

ZetaChain 2.0

ZetaChain 2.0 is a series of proposed upgrades that extend the following current features of the Universal EVM Stack.

A non-technical overview:

  • ZetaChain’s messaging and asset-management capabilities become composable, meaning even more complex, multi-step transactions can be abstracted for end-users.

  • Universal Apps on ZetaChain can compose assets on many chains on behalf of users, meaning an end-user can gain exposure to and utilize many apps across many chains, while only ever needing to interface with one app on ZetaChain.

  • Universal Proof-of-Stake enables the ability to stake native assets such as BTC, ETH, and BNB into ZetaChain’s PoS, earning rewards in return for further securing the network.

  • Bitcoin compatibility, IBC, and additional chain integrations allow more users and wallets to access Universal Apps.

Below is a more detailed overview of these key feature proposals, also available on the open source repository.

Cross-Chain Messaging

This feature proposal makes multi-leg transactions composable through ZetaChain, and merges the ZRC-20 primitive with the messaging capabilities. By composing messaging capabilities with Omnichain Smart Contracts, apps can abstract multi-leg cross-chain transactions in tandem with native asset movements and interactions. For example, a contract on ZetaChain could be called by a user on Bitcoin and also enact external contract calls on Ethereum and BNB Chain, and more legs thereafter — all in just one step for the user.

This feature development is complete and currently under audit before moving to governance proposal via governance in the next upgrade (v16).

Omnichain Accounts

This feature enables contracts on ZetaChain to interact with native connected-chain contracts, and move assets seamlessly on behalf of user accounts. It achieves this by extending the ability of Omnichain Smart Contracts with withdrawAndCall, an extension to the withdraw capabilities of ZRC-20.

Omnichain Accounts and Native Asset Composability make possible an application that can aggregate and optimize opportunities across all connected chains on behalf of an end-user, requiring only a single interaction with a dApp on ZetaChain. Apps using this extension of the ZRC-20 primitive can build experiences where the user never has to switch network or sign additional transactions.

This feature proposal extends the general omnichain composability enabled by ZetaChain to make it even simpler to build yield aggregators, portfolio management tools, multichain automation, and more. Building these decentralized apps with cross-chain automation rules is made possible by the Universal EVM.

Learn more about this feature proposal here.

Universal PoS, enabling Bitcoin, Ethereum, BNB Staking

ZetaChain is currently secured by a Proof-of-Stake consensus mechanism based on ZETA. Starting with BTC, this feature proposal introduces staking of ZRC-20 assets (ETH, BNB, Etc.) to act as hybrid stake into the core consensus layer of ZetaChain. The new mechanism can multiply the security and utility of the network while integrating additional assets whitelisted via ZRC-20. Even with only Bitcoin enabled in this mechanism, ZetaChain’s network gains exposure to the network of over a million unique Bitcoin miners to further secure the Universal EVM. This unique proof-of-stake model helps unify security of the network with new native assets on ZetaChain.

Longer term, this feature proposal unlocks the potential for liquid staking and restaking native foreign assets such as BTC to secure any additional protocols. Liquidity can be directly coupled with security on the network. Learn more about how ZetaChain enables the creation of protocol mechanisms similar to EigenLayer and Babylon Chain as Omnichain Smart Contracts. Check out the proposal here.

Bitcoin Compatibility

Bitcoin is a key connection for ZetaChain. In order to allow further chain abstraction and wallet compatibility with ZetaChain’s Universal EVM, the network needs to support the following Bitcoin script types: Pay-to-Witness-Public-Key-Hash (P2WPKH), Pay-to-Taproot (P2TR), Pay-to-Public-Key-Hash (P2PKH), Pay-to-Script-Hash (P2SH), Pay-to-Witness-Script-Hash (P2WSH). This will cover Taproot, Segwit, and Legacy addresses, allowing fuller coverage for Bitcoin users and wallets.

This feature development is complete and is currently under audit before moving to proposal via governance in an upcoming upgrade (v16).

Additional extensions and developments

The node repository is under very active development. With dozens of contributors and growing, a few other key components already developed or under development are:

  • Forking and extension of Ethermint EVM module to improve RPC compatibility with cross-chain transactions that invokes zEVM contracts or change its state.

  • Increase the integration of Ethermint/EVM with other Cosmos SDK modules by exposing data and functionality of the Cosmos SDK module to EVM contract interfaces.

  • Rate Limiter to allow for an adjustable throttle mechanism that prevents anomalous, unwanted flows of ZRC-20 or ZETA tokens.

  • Adjustment to ZETA supply cap on Ethereum via the Ethereum Connector to improve overall security profile of the multichain ZETA token.

  • Code coverage and optimizations/refactors to further modularize and streamline development and testing of new features for all contributors.

Many more issues and ideas are open for collaboration. Any interested developer can commit contributions to be voted on in upgrades via governance. Visit the node repository here.

Chain Support

ZetaChain’s architecture enables adding new chain integrations to the Chain Abstraction Framework. Chain integrations are made through software upgrades proposed and voted on in governance. At this time, contributors are investigating the following:

Note, dApps built on ZetaChain’s Chain Abstraction Framework automatically inherent compatibility with any new chain integrations. All proposals for new chain integrations are welcome. You don’t have to be a blockchain expert to start investigating and analyzing a new chain’s impact on the ZetaChain ecosystem. Anyone can get involved by posting an issue for discussion on Github.

Adding IBC as a transport layer

The thinking behind IBC support introduces a new way of transporting data to/from the universe of IBC-compatible chains and ZetaChain’s Chain Abstraction Framework to bring new potential utility for both ecosystems. By integrating IBC, the ZRC-20 primitive for foreign assets is unified with ibc-transfer, and cross-chain transactions can also span into integrated IBC chains while remaining under the simple interface to ZetaChain developers.

Adding IBC as a transport layer would enable omnichain smart contract calls from IBC chains. Learn more about this feature proposal here.

Note, withdrawing ZETA assets such as BTC, ETH, and BNB to IBC chains requires separate functionality. This proposed feature is currently under investigation by the community of ZetaChain users here.

Recapping ZetaChain 2.0

Universal chain abstraction is the core goal of the ZetaChain network. With ZetaChain 2.0, we propose significant upgrades to the Chain Abstraction Framework (CAF) that aim to unlock novel features such as Universal POS Staking and Universal Apps that can manage apps on external chains on behalf of users and initiate multi-step cross-chain transactions in one click. Together, these developments aim to make all of crypto accessible to users, regardless of where they start or spend their journey. We look forward the community’s participation in voting on these proposals.

Apply to the BTC Ecosystem Growth Program

The BTC Ecosystem Growth Program is now open for submissions. Projects can visit ZetaChain Developer Grants and complete the grant submission form.

About ZetaChain

ZetaChain is a simple, fast, and secure omnichain blockchain. A pioneer implementing the concept of chain abstraction, ZetaChain serves as the base-layer of the decentralized internet. With ZetaChain’s Omnichain Smart Contracts, developers can build truly interoperable dApps that span multiple chains across any existing blockchain from Ethereum to Bitcoin and beyond. Access all of crypto from any chain, including new blockchain innovations into the future. ZetaChain’s mission is to build a platform for global access, simplicity, and utility across any blockchain.

Follow ZetaChain on Twitter @zetablockchain and join the conversation on Discord and Telegram. Reach out to [email protected] if you’re building on top of ZetaChain.

Any projects mentioned are 3rd party, not ZetaChain.

Disclaimer: The above details are the current thinking and models with regard to ZetaChain and ZETA. They are subject to variations for the ZetaChain Mainnet Beta, and all upgrades of the network can only go live via a successful governance vote on-chain.