Topics Blockchain

What Is ZetaChain (ZETA): The Omnichain for a Unified Crypto World

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2024ćčŽ2月1æ—„

Blockchain networks are designed to maintain strict security and insulation from external attacks, so they frequently face challenges in facilitating cross-chain data exchanges. Early blockchains like Bitcoin (BTC), Ethereum (ETH) and Polygon (POL) were created to prioritize secure operations and asset transfers within their operational environments. As a result, sending assets or executing smart contracts across blockchains is far from a trivial activity.

While crypto bridges help facilitate cross-chain asset transfers, they often involve burning tokens on the sending network and minting the equivalent assets on the destination chain — which decreases efficiency and scalability, and increases transfer costs. Even cross-chain transactions between highly compatible chains carry significant overhead. When it comes to executing smart contracts across chains, the available options are even more limited.

Inefficiency of inter-blockchain communication has led to active R&D in pursuit of solutions. One of the latest and potentially most eloquent is offered by ZetaChain (ZETA), whose pioneering platform can read and write data across multiple blockchain networks, enabling cross-chain data exchanges and smart contract execution.

Key Takeaways:

  • ZetaChain, a Layer 1 interoperable blockchain, offers omnichain smart contracts that read and write data across various blockchains. It features lightweight cross-chain messaging and manages external assets for enhanced interoperability.

  • In addition to supporting smart networks such as Ethereum and Polygon, ZetaChain’s omnichain contracts enable the use of assets from non–smart contract chains like Bitcoin and Dogecoin within the platform’s DApps.

  • Its native token, ZETA, serves multiple roles, such as for governance and as payment for block rewards, gas fees and cross-chain transactions.

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What Is ZetaChain?

ZetaChain (ZETA) is a Layer 1 blockchain and interoperational platform that enables cross-chain data exchanges and smart contract executions. Decentralized apps (DApps) built on ZetaChain utilize smart contracts that can read and write data across different chains. This allows the DApps to leverage the features of multiple different blockchains as if the apps were based and operated on a single one. ZetaChain supports omnichain programmability not only for smart platforms, such as Ethereum or Polygon, but also for non–smart contract chains that don’t natively feature such functionality, e.g., Bitcoin or Dogecoin (DOGE).

Ankur Nandwani, a former Coinbase team member and the creator of the Basic Attention Token (BAT) cryptocurrency, founded the ZetaChain project in 2021. Its platform launched testnet operations in 2022. Soon after, ZetaChain’s innovative concept of omnichain smart contracts attracted significant interest from the investor community, and the project raised $27 million in venture capital funding in 2023. On Feb 1, 2024, Zetachain launched its mainnet.

The ZetaChain platform is theoretically capable of connecting any chains. For now, however, its team is focusing integration efforts on the largest blockchains — Bitcoin, Ethereum, Polygon and BNB Chain (BNB).

How Does ZetaChain Work?

At the base level, ZetaChain’s Layer 1 blockchain uses Cosmos SDK and the Tendermint consensus engine, operating on a proof of stake (PoS) algorithm with smart contract functionality. ZetaChain’s smart contracts can read and write data on any chain to which they’ve established a connection, enabling seamless asset transfers and smart contract execution capability across multiple chains. 

Thanks to this omnichain functionality, ZetaChain-based DApps can utilize assets on other chains without the need for asset bridging – including chains like Bitcoin, which lack smart chain functionality. ZetaChain’s architecture features ZetaEVM (zEVM), anEthereum-compatible engine that powers the omnichain smart contracts.

ZetaChain Key Features

Hyper-Connected Nodes

As noted above, ZetaChain is a PoS network. As such, it depends upon validator nodes to process blocks of transactions. In addition to these core validators, the platform features another type of network actors: hyper-connected nodes. These special nodes continually monitor cross-chain communication and transactions across the entire multi-chain setup, and help flag any inconsistent or fraudulent transactions that might occur during cross-chain exchanges.

While the job of the core validator nodes is to secure the main ZetaChain Layer 1 network, hyper-connected nodes are the primary guardians of cross-chain security.

Omnichain Contracts

Omnichain smart contracts are the most distinct feature of the ZetaChain protocol. They’re used to orchestrate transaction activity across different blockchain networks. In order to provide omnichain smart contract functionality, ZetaChain has implemented a ZRC-20 token standard – an extension of the ERC-20 standard used on Ethereum and other EVM-compatible networks. Unlike ERC-20, ZetaChain’s ZRC-20 standard can support smart functionality for assets based on non-smart chains.

Any fungible crypto asset — whether it’s an ERC-20 token on Ethereum or Polygon, BTC, DOGE or any other asset type — can be represented on ZetaChain’s cross-chain protocol as a ZRC-20 token. Using this unified standard allows ZetaChain DApps to coordinate transaction activity across all of the connected chains as if it’s occurring on a single network. Therefore, no multiple representation of assets across the participating chains is required. This crucial innovation makes ZetaChain a truly convenient ecosystem in which Bitcoin, Ether and ERC-20 tokens can all be utilized in multiple DApps on a single chain.

Cross-Chain Message Passing

ZetaChain also supports cross-chain messaging to pass lightweight data across different blockchains. Cross-chain message and data transfers can be used when full-scale smart contract functionality isn’t required by an app. While the use of complex functionality and smart contract logic requires omnichain contracts, cross-chain messaging is more suitable for simple use cases, e.g., NFT transfers or basic DApps that require minimal data exchange.

Managed External Assets

The ZetaChain protocol can also be used to manage assets and vaults hosted on other blockchains remotely. This function allows you to apply smart contract logic to non–smart contract chains like Bitcoin and Dogecoin.

What Is ZETA?

ZETA is ZetaChain’s native crypto token, used to pay block rewards, gas fees and for cross-chain transactions. It’s also utilized on the platform’s core crypto pools to provide liquidity and to incentivize liquidity providers (LPs). Additionally, ZETA serves as a governance token. ZETA holders can vote on important network and policy changes affecting the protocol and its Layer 1 chain.

The token’s initial supply, specified at 2.1 billion, has already been minted. Of this, 31.5 million ZETA are allotted to the genesis airdrop, dedicated to those who have been using and contributing to ZetaLabs before its platform’s mainnet launch. Over 800,000 participants were deemed eligible after a snapshot was taken on Aug 20, 2023.

During the initial four years, ZETA’s total supply will remain fixed at 2.1 billion. After that, there will be a yearly supply inflation of about 2.5%. The precise amount of token inflation will depend upon ZETA’s circulating supply at the time. Initial ZETA supply distribution shares are shown in the image below.

Is ZetaChain (ZETA) a Good Investment?

You might consider investing in the ZETA token based on the following factors:

1. ZetaChain is among the first platforms to provide native-level. cross-chain communication and asset manipulation. This functionality has the potential to achieve mass adoption. As DApps become more sophisticated, developers and operators will be increasingly interested in the omnichain features provided by the platform. The wider adoption of ZetaChain smart contracts would, in turn, lead to a higher demand for the ZETA token.

2. Enabling smart functionality and external asset management for non–smart contract chains like Bitcoin and Dogecoin is another promising feature of ZetaChain. This is particularly relevant for the Bitcoin blockchain, given the global army of BTC holders — according to latest estimates, now totaling over 100 million — who, by blockchain industry standards, represent an enormous potential target audience. 

While there are many cross-chain solutions attempting to bring smart contract–like functionality to Bitcoin, ZetaChain differs in one critical aspect: its DApps can easily combine the management of Bitcoin assets with those from other popular chains, including Ethereum, Polygon and BNB. For example, with ZetaChain you can utilize your BTC funds in advanced DeFi operations and swaps with ETH, BNB, POL and other popular cryptos.

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Where to Buy ZETA

ZETA can be bought as a Spot pair (ZETA/USDT) and USDT Perpetual contract (ZETAUSDT) on Bybit. From Jan 31 to Feb 19, 2024, you can participate in the Token Splash campaign to earn from a 300,000 ZETA prize pool. New users who sign up with Bybit and deposit a minimum of 300 ZETA or deposit 100 USDT to trade ZETA get to earn 100 ZETA, while current Bybit users can earn 25 ZETA for completing the same tasks.

And from Jan 31 to Feb 14, 2024, you can also earn from a 1.7 million ZETA prize pool by participating in staking in the Bybit Launchpool. Choose from two staking options: a USDT pool with a 850,000 ZETA prize pool, or a ZETA pool with 850,000 ZETA.

Closing Thoughts

ZetaChain’s mainnet launch signifies an important step in the evolution of blockchain technology, since ZetaChain’s unique omnichain smart contracts will make native-level asset operations across different chains a seamless experience. 

DApps that combine assets and contract operations across a multitude of blockchain platforms may soon become the norm in the industry — thanks to the innovative ZetaChain protocol!

#Bybit #TheCryptoArk