Dismantling ZetaChain: Why is 2024 said to be a great year for the development of the "chain abstraction" track?

Recently, the cross-chain interoperability L1 public chain @zetachain released an airdrop, which attracted market attention to 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 a vertical alliance or a horizontal alliance, it is an "alliance" strategy. Modularization is the combination of scattered blockchain development capabilities in the form of modular components to cope with comprehensive large-scale public chains. Chain abstraction integrates the liquidity scattered among different chains in the form of interoperability to improve the experience of developers and users. This integrated approach can enhance the flexibility and scalability of the blockchain while promoting cooperation and interaction between different chains.

What is chain abstraction?

Recently, the co-founder of Near proposed the concept of "chain abstraction". Simply put, chain abstraction is the modular separation of different functional layers of the blockchain, such as settlement layer, DA layer, execution layer, Rollup layer, etc. The introduction of this concept has greatly promoted the prosperity of the chain construction market. However, at the same time, chain abstraction also brings some problems. First of all, liquidity, applications and users among different chains have become more dispersed, which has brought huge barriers to ordinary users and developers. This means that users and developers need to learn more and adapt to different chain abstraction modules. Although chain abstraction has brought prosperity to the chain building market, there is also a need to find a balance between decentralization and threshold.

Chain abstraction is to solve problems such as cross-chain communication, asset transfer, and smart contract invocation between different chains by building a universal all-purpose smart contract. It provides a standardized way so that different chains can connect and interact with each other, thereby achieving more efficient and secure cross-chain operations.

There are two main common chain-wide interoperability issues:

1) Communication issues between non-similar smart contract chains, for example, how to use UTXO non-smart contract platforms such as Bitcoin Establish an effective communication connection with account smart contract platforms such as Ethereum?

The Wrap method is currently a commonly used cross-chain bridge solution, but it has problems with high handling fees and capital loss, and is also accompanied by greater centralization risks in asset multi-signature management. Therefore, it is necessary to find a non-Wrap method for cross-chain asset transfer solutions. This solution can reduce handling fee friction and capital loss, while reducing centralization risks and improving the efficiency and security of cross-chain asset transfers.

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 seen as an application-specific blockchain framework to achieve interoperability, and can also be understood as a "chain within a chain" concept. Adopting the "blockchain of blockchains" (BOB) approach, it embeds specific chains into the full-chain environment, thereby providing a framework for data, network, consensus, incentives and contract layers to achieve interaction between different blockchains. Operability. This allows different blockchains to communicate with each other and exchange data, thereby promoting the development and cooperation of the entire blockchain ecosystem.

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, so the verifiers can obtain certain token incentives; the observer's The 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 identity confirmation of the external chain, and in requests involving asset circulation At this time, 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 the UTXO model chain, due to the Bitcoin network Without 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 keys and addresses, it is possible to use smart contracts on Zetachain to connect and manage the local Bitcoin network. asset. 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) Currently, common cross-chain bridge solutions are based on the logic of locking assets in chain A and issuing additional assets in chain B. This interaction premise will not only lock the liquidity of a single chain, but will also occur during the Wrap encapsulation process. Asset loss 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 a 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) Based on the atomic transaction feature of smart contract management, external links can 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.

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