## Could an EigenLayer x ZERO Network Partnership Solve DeFi's Biggest Challenges?

The DeFi landscape is a hotbed of innovation, with new protocols and services continually redefining what's possible. However, as the industry grows, so too do issues surrounding liquidity fragmentation and interoperability.

Fortunately, the focus is shifting toward solving these challenges, and a potential collaboration between [EigenLayer](https://www.eigenlayer.xyz/) and [ZERO Network](https://zerodao.com/) could be a game-changer. 

By combining EigenLayer’s Ethereum restaking capabilities with the ZERO Network’s Layer 0 cross-chain bridge, users could benefit from higher total returns when staking,while helping to fortify the network security.

To best understand the benefits of a partnership, let's first dive into what makes EigenLayer such a standout player in the DeFi space.

## EigenLayer 

EigenLayer is a new protocol that’s quickly gaining traction for its ingenious approach to Ethereum 'restaking'. 

Through EigenLayer, users can take their already staked Ethereum (ETH) or liquid staking tokens, including Lido Staked ETH (stETH), Coinbase Wrapped Staked ETH (cbETH), and Rocket Pool ETH (rETH), and restake them. 

This allows users to stake the same ETH or liquid staking derivatives (LSDs) on multiple services at once, simultaneously securing all networks. It’s a win-win: stakers get to participate at reduced capital costs while protocols on the network enjoy enhanced security through network validation.

EigenLayer has demonstrated a meteoric rise. Since its June launch, assets under management have grown to ~$237.63 million:

1. stETH: 99.92k units 
2. cbETH: 21.4k units
3. rETH: 19.91k units

![https://i.ibb.co/Y09WVYV/Eigenlayer-AUM-Dune.png](https://i.ibb.co/Y09WVYV/Eigenlayer-AUM-Dune.png)

With no direct competitors, EigenLayer is uniquely positioned. This surge in AuM highlights users' confidence, and many new projects are lining up to build upon its infrastructure.

![https://i.ibb.co/Xxgb2Yd/Eigenlayer-Projects.png](https://i.ibb.co/Xxgb2Yd/Eigenlayer-Projects.png)

As Ethereum grows and EigenLayer expands its offerings to new projects, including interoperability layers, modular execution layers and data availability services, many expect it to attract a network value in the billions.

## An EigenLayer and ZERO Network Partnership

ZERO Network and its upcoming[ Layer 0 cross-chain bridge](https://zerodao.com/blog/zero-network-solving-the-challenges-of-bitcoin-bridges/) are developed with the goal of reducing fragmented liquidity and increasing security and interoperability throughout DeFi. 

A ZERO Network x EigenLayer partnership could amplify these benefits even further by leveraging the protocol’s restaking capabilities, Ethereum's large and decentralized set of validators and its staked capital base. The potential benefits are vast:

**Enhanced Capital Efficiency and Security:**

EigenLayer's restaking feature would help attract additional ZERO stakers, thus enhancing the network's security.

Allowing staked assets to be committed to ZERO Network's liquidity pools would also improve asset transfers and allow users to interact more efficiently.

**Supercharged Earnings:**

Restaking offers users the ability to earn from multiple revenue streams. Your staked assets on EigenLayer can also yield returns on ZERO Network – maximize investment returns with minimal effort.

**Agile Development:**

EigenLayer's model reduces both upfront and operational costs for blockchain developers by tapping into Ethereum. 

This efficiency could extend to ZERO, streamlining the deployment of new features and services while leveraging Ethereum's validator network and staked capital base.

**Challenges to Overcome:**

As is always the case in DeFi, new concepts introduce challenges, mainly around system complexity and potential risks associated with smart contract bugs. Integrating EigenLayer's economics with ZERO's will also require extensive planning to ensure the correct balance of each project’s tokenomics.

Risk management strategies and thorough code audits would have to be in place to deal with these challenges effectively.

## Wrapping Up

The DeFi world is dealing with real challenges, like how to move money around different blockchains easily or keep liquidity from getting stuck in one place. A partnership between EigenLayer and ZERO Network could tackle this head-on. 

Combining EigenLayer's unique Ethereum restaking features with ZERO Network's advanced cross-chain bridge could mean better liquidity, more financial flexibility, and even more ways to earn money across multiple blockchains.

Nothing's confirmed yet, but the exciting thing about the DeFi space is that new ideas and collaborations are always around the corner. Both EigenLayer and ZERO Network are pushing boundaries, so who knows what they could come up with together?

To learn more about zeroDAO's roadmap, including the upcoming testnet launch and NFT collection, check out our [recently published articles](https://zerodao.com/) and stop by the [Discord channel](https://discord.com/invite/w5SU2pvD8B).



A look into EigenLayer's unique Ethereum restaking features combined with the ZERO Network's advanced cross-chain bridge.

Reducing Liquidity Fragmentation and Increasing Interoperability

![Future-of-Bitcoin-Bridging](https://i.ibb.co/jG7pqfk/Zero-DAO-1.jpg)

The ZERO Network by zeroDAO offers a fresh perspective on cross-chain interoperability with its decentralized and trustless Layer 0 bridge. 

This article examines the issues with existing crypto bridges and provides insight into the key features and technology used by the ZERO Network to solve these problems.

## Challenges with Existing Bridging Solutions

Current crypto bridges typically face several challenges:

1. **Limited Interoperability:** Most solutions cater only to EVM-based networks, restricting the scope of cross-chain capabilities and leaving a large portion of the crypto ecosystem disconnected.

2. **Centralization and Trust Issues:** Some existing bridges require trust in centralized parties or validators, undermining the core principles of decentralization and introducing potential security risks.

3. **Inefficiency and High Costs:** Slow and costly transactions are common in many bridges.

## ZERO Network's Solutions

The ZERO network is improving bridging solutions through advanced technology and features such as a new L0 proof-of-stake (PoS) chain powered by $ETH staking and FROST signing with a custom Roastchain Substrate Palette.

It also incorporates innovative economic structures, including a dynamic burn incentive, ETH restaking and liquidity-generating NFTs.

Let's take a closer look at how the network operates, as well as the benefits it offers users, developers and network participants.

## Enhanced Interoperability

The ZERO Network uses a FROST-Powered L0 to enable cross-chain transfers for EVM and non-EVM assets, including $BTC. 

By bridging the gap between blockchains, Zero allows for a more integrated crypto ecosystem and provides a safe and efficient solution for cross-chain asset transfers. 

![Seemless-Asset-Movement](https://i.ibb.co/WBJHmM9/image-4.png)

## Network Economics 

The ZERO Network employs a unique economic model that focuses on collateralization and staking for assets bridged onto EVM networks. 

Let's break down the components of this model:

1. **Distributed Key Custody:** When assets such as $BTC are transferred from their native chains to EVM networks, they are secured and replaced with equivalent coins or tokens on the destination chain. Zero's collateralization model utilizes distributed key custody, in which the assets are held by a key managed collectively by all participating signing nodes. This approach guarantees that the actual assets on the native chain underpin the value of the tokens on the destination chain, securing the backing of $zBTC.

2. **Staking and Earning Revenue:** The primary staking asset in the network's economic model is $ETH, which provides security to the protocol. Validators who act as a governance body can also stake $ZERO LP tokens. As these activities generate fees, stakers receive a share of the fees, creating an incentive for users to contribute to the network's liquidity and security.

3. **Handling Malicious Behavior:** If stakers behave maliciously, slashing penalties are applied. In such cases, the staked $ETH is liquidated, and the resulting funds are used to buy back and burn $zBTC until the network is solvent again. This mechanism helps maintain the network's stability and integrity.

By implementing this economic model, the ZERO Network aims to create a secure and sustainable environment for cross-chain interactions, offering users the opportunity to generate revenue while contributing to the network's growth and security.

![Locked-to-Bridged](https://i.ibb.co/bHr0DpP/Zero-DAO-2.jpg)

## Staking and Governance

Users can stake their $ZERO / $ETH LP tokens in the [sZERO](https://docs.zerodao.com/dao/dao) staking contract to obtain $sZERO tokens. These tokens also grant voting rights within the network's governance system.

To unstake, users can exchange their $sZERO tokens back into the original input LP tokens and receive any accumulated $ZERO rewards. 

## ZERO Heroes: Liquidity-Generating NFTs

The ZERO Hero NFT collection serves as a mechanism to provide liquidity to the network. 

The liquidity provision process involves the following steps:

1. **Minting:** Users mint a ZERO Hero NFT by contributing $ETH. ZeroDAO provides $ZERO tokens for the other side of the LP, and the $ETH and $ZERO tokens are used to create a liquidity pool for the network.

2. **Incentivized** holding: Hero NFTs are designed as diamond hands NFTs, incentivizing long-term holding. Once the ZERO network is live, NFTs will be redeemable for the underlying LP ($ETH and $ZERO), but the redemption is non-linear. Early redeemers get fewer LP tokens than later redeemers, meaning that the longer users hold on to their NFT, the more the redemption value grows.

3. **LP Tokens:** LP tokens represent the user's share in the liquidity pool. Users can then use these tokens to participate in various DeFi activities, such as yield farming or staking.

![zero-HERO-Headphones](https://i.ibb.co/7GPyHz0/zero-HERO-Headphones.png)

Network Architecture: Key Actors and Their Roles

The ZERO Network relies on several key actors:

- Signers
- Validators

These actors play crucial roles in ensuring the network's efficient and secure operation.

#### **Roles and Responsibilities of Key Actors**
- **Signers:** Signers are responsible for signing messages using the FROST protocol. By staking $ETH as collateral, they can participate in key generation and earn passive yield from the bridged assets.

- **Validators:** Validators produce blocks on the ZERO Network. They earn rewards based on their $sZERO balance on the Ethereum mainnet, acquired by staking $ZERO / $ETH LP tokens. The more value transferred, the more yield for stakers.

## Partnerships, Collaboration and Education

**Partnerships and expansion:** zeroDAO is currently forming partnerships with major protocols and integrating their products as core features of the ZERO Network.

Once mainnet is deployed, the team plans on expanding the range of supported networks to include L2 chains such as Arbitrum.

**Collaborative development:** To promote a collaborative ecosystem, developers are invited to build on the ZERO network. [Documentation](https://docs.zerodao.com/) and an open-source [codebase](https://github.com/zerodao-finance) are available for reference and additional information and questions can be directed to the team via the [zeroDAO Discord channel](https://discord.com/invite/w5SU2pvD8B). 

**Education:** The project emphasizes creating educational content and informative guides for users to boost understanding and adoption of the ZERO Network.

Documentation, research guides and a fully-functioning testnet will allow users to familiarize themselves with the network's features, technology and use cases, ultimately enabling them to make informed decisions regarding network usage and participation.

## Summary

The ZERO Network aims to transform cross-chain interoperability through its decentralized and trustless cross-chain bridge. 

With plans to connect EVM and non-EVM chains, the ZERO Network addresses the issues faced with current bridging solutions. 

Enhanced interoperability is achieved through FROST-Powered L0, enabling secure and efficient cross-chain transfers. 

The network's economic model includes staking and incentives for participation, with the $ZERO token playing a pivotal role. Users can participate in $sZERO staking and on-chain governance and benefit from long-term holding of the ZERO Hero NFTs.

zeroDAO is heavily focused on forging partnerships with major protocols, collaborative development and promoting education and awareness to drive user adoption.

As development progresses, the team plans to provide more detailed tokenomics and launch a bridge testnet within the coming months, followed by the mainnet release later this year. 

Keep up to date by following the [zeroDAO Twitter page](https://twitter.com/zerodaoHQ) and joining the [Discord channel](https://discord.com/invite/w5SU2pvD8B).

Thanks for tuning in, Zero Heroes! 


The ZERO Network aims to connect EVM and non-EVM chains as a FROST-Powered  L0. Learn more about the ZERO Network here!

The Zero Network: Cross-Chain Bridging for BTC and non-EVM Assets

![ima-6a16dc3.jpg](https://i.ibb.co/pxnTVYS/ima-6a16dc3.jpg)

Since their inception, Bitcoin and crypto bridges have been evolving and growing in importance within the DeFi ecosystem. Despite this, they have continued to face significant hurdles, including limited interoperability, centralization and technical inefficiencies.

In this article, we take a look at these challenges and introduce the ZERO Network by zeroDAO – a decentralized and trustless Layer 0 that aims to revolutionize cross-chain bridging.

## Challenges with Bitcoin Bridges

Over time, numerous solutions have been developed to bridge the gap between Bitcoin's blockchain and other networks. This is primarily to allow Bitcoin to have a more active role in the DeFi sector. 

However, these initiatives faced several considerable challenges:

1. Limited cross-chain interoperability: Most Bitcoin bridge solutions focus on EVM-compatible chains, leaving a significant portion of the crypto ecosystem disconnected.
2. Centralization & security risks: Many bridges and cross-chain solutions require trust in central parties or small groups of validators, contradicting blockchain’s key principles of decentralization and trustlessness, while also creating potential security risks.
3. Inefficiency: Due to technical inefficiencies, Bitcoin and crypto bridges are typically slow and expensive to use. 

## Smart Contract Vulnerabilities

Bridges utilize smart contracts to facilitate the transfer of assets between chains. While this remains a necessary component for bridging, these complex and often vulnerable contracts have become a target for hackers. 

## Notable Bridge Hacks:

1. Thorchain hack (July 2021): Thorchain, a cross-chain liquidity protocol, was exploited for approximately $7.6 million. The attacker manipulated Thorchain's Bifrost bridge system to overpay assets.

2. Ronin bridge hack (March 2022): Ronin, an Ethereum sidechain developed for the NFT game Axie Infinity, was compromised for over 173,600 ETH and 25.5 million USDC, totaling over $600 million. The attacker gained control of four of the nine validator nodes in the Ronin chain, plus a validator run by Axie DAO.

3. Binance bridge hack (October 2022): Binance bridge suffered a major breach resulting in the loss of $570 million (2 million BNB tokens). The attacker exploited a proof verifier bug in the bridge by registering as a relayer for the BSC Token Hub – a vault that facilitates cross-chain transactions. Despite a quick response that saw the suspension of all 44 validators and the introduction of an urgent patch to address the issue, the attacker was able to launder around $137 million through various chains, with the remainder frozen on BSC.

Cross-chain solutions have come a long way, and smart contract security has been held to much higher standards since the introduction of professional code auditing companies and popular audit competitions. However, it's clear that issues remain.

## Issues with Cross-Chain Tokenization

Wrapped Bitcoin (WBTC) – a tokenized form of Bitcoin on Ethereum – is the most prominent example of a cross-chain compatible version of BTC. 

While WBTC plays a significant role in bringing Bitcoin into Ethereum's DeFi ecosystem, it continues to face several issues due to its dependence on centralizing factors:

1. Centralized custodians: WBTC depends heavily on centralized custodians, like BitGo, for token issuance and redemption, contradicting blockchain's decentralization principle.

2. Blacklisting concerns: Custodians can be granted the power to blacklist specific addresses, limiting access.

3. Conversion delays: The conversion of Bitcoin to WBTC and back is not always instant, potentially causing liquidity issues.

Now that we understand some of the challenges and vulnerabilities associated with bridging and cross-chain transacting, it’s time to introduce the ZERO Network by zeroDAO! 

## ZERO Network: The Future of Cross-Chain Bridging

The ZERO Network is a next-gen EVM and non-EVM compatible bridge that aims to overhaul the cross-chain transaction process and mitigate smart contract vulnerabilities through rigorous security measures and innovative architecture. 

With ZERO’s distributed key custody, assets are held by a key managed collectively by all participating signing nodes, reducing central points of failure. The network also employs a decentralized model of signers and validators, which helps ensure security and trustlessness.

Let's break down these key components of the ZERO Network, as well as its economic model, liquidity-generating NFTs and more!

## The Economic Model of the ZERO Network

ZERO Network incorporates a unique economic model that combines liquidity-generating NFTs and staking, making it possible to bridge assets across EVM and non-EVM networks.

When assets such as Bitcoin are transferred from their native chains to EVM networks, they are secured and replaced with equivalent coins or tokens on the destination chain.
 
This is achieved using distributed key custody, a system where the assets are held by a key managed collectively by all participating signing nodes, eliminating the need for a central party and providing a more secure and trustless solution than previous attempts such as WBTC.

## Incentivizing Liquidity: The Role of ZERO Heroes NFTs

zeroDAO has pioneered a new approach to the liquidity provision process using its unique ZERO Hero NFT collection. By contributing $ETH, users can mint a ZERO Hero NFT, with zeroDAO providing $ZERO tokens to create a liquidity pool.

These NFTs incorporate a 'diamond hands' game to incentivize long-term holding, with their redemption value growing over time. In this way, zeroDAO leverages NFTs not just as collectibles but as integral parts of its economic model, promoting network liquidity.

## Network Architecture: Ensuring Efficiency and Security

The efficiency and security of the ZERO Network rest on key actors – signers and validators. 

Signers, who stake $ETH as collateral, participate in key generation and earn passive yield from bridged assets.

Validators, on the other hand, produce blocks on the ZERO Network and earn rewards based on their $sZERO balance on the Ethereum mainnet, obtained by staking $ZERO / $ETH LP tokens. 

The distributed nature of the network and efficient use of signers and validators means that transactions can be processed quickly and cost-effectively while eliminating the need for centralized parties. 

## Bridging the Gap to a More Connected DeFi Future

As the ZERO Network gears up for its ZERO Heroes NFT drop and testnet launch, there are plans to extend support to include Layer 2 chains like Arbitrum. The team also has a major focus on partnership building, collaborative development and education.

The ZERO Network is set to redefine the future of Bitcoin and crypto bridging, addressing the security issues associated with past and current solutions and introducing enhanced interoperability, decentralization and efficiency. 

Thanks for tuning in, ZERO Heroes! Stay updated with the latest developments by following the zeroDAO [Twitter Page](https://twitter.com/zerodaoHQ) and joining the [Discord Channel](http://discord.gg/w5SU2pvD8B).

## Contact Us

For partnership or investment inquiries email jon@zerodao.com 

[Docs](https://docs.zerodao.com/)｜[Twitter](https://twitter.com/zerodaoHQ) ｜[Discord](http://discord.gg/w5SU2pvD8B) ｜[Matrix](https://matrix.to/#/%23general:matrix.zerodao.gg)｜[GitHub](https://github.com/zerodao-finance) | [Website](https://zerodao.com/)

A reflection of bitcoin bridges and how zeroDAO seeks to revolutionize the bridging industry

ZERO Network: Solving the Challenges of Bitcoin Bridges

Following Ethereum’s Shanghai upgrade in April, network validators have been able to unlock and withdraw significant amounts of ETH from the Beacon Chain. This influx of ETH to the open market has led to liquid staking derivative (LSD) projects like Lido Finance, Rocket Pool and Swell Network gaining significant traction. 

The total value locked in LSD protocols has grown rapidly and is currently at 11.8m ETH ($18.44 billion). Inflows have also been much more consistent than most other areas of DeFi throughout the 2023 bear market.

![https://i.ibb.co/8m4jGdV/eth-lsds.png](https://i.ibb.co/8m4jGdV/eth-lsds.png)

But what does this mean for the ZERO Network's quest for decentralized and seamless cross-chain interoperability, and how can Zero’s users benefit from the multi-billion dollar LSD industry?

##The Mechanics of LSDs

LSDs offer a dual advantage: yield and liquidity. This means that users can lock up their Ethereum and earn staking rewards while retaining the ability to trade or use their staked ETH in other DeFi protocols. LSD liquidity is particularly beneficial in a bear market, where stable, yield-generating assets are in high demand.

One of the most popular use cases for LSDs is yield farming. Let's break down an example.

An Ethereum investor stakes their ETH in Swell Network's LSD protocol and earns an APR of ~3.34%. From there, they use their newly generated Swell Ethereum (swETH) as liquidity in a Balancer LP and earn additional rewards of ~4.55% APR. 

A massive boost in personal yield and liquidity across the DeFi space: win-win!

From deepening DeFi liquidity to opening the door to new and improved yield-generating strategies, it's no surprise that LSDs are DeFi's hot sector for 2023 (even being coined LSDfi summer). But how does this relate to ZERO Network and its cross-chain bridge?

## LSDs and the ZERO Network

Building on its decentralized model, ZERO Network aims to make asset transfers across chains as seamless as possible. Supporting an integration with LSD protocols like Lido Finance, Rocket Pool, and Swell could take this to the next level. 

Users could stake their Ethereum in these LSD protocols and then deposit the resulting yield-bearing assets into ZERO's Liquidity Pools. 

This approach offers several key benefits:

1. **Multi-Source Yield:** Enables users to earn from both staking and liquidity pools.

2. **Capital Efficiency:** Maximizes the utility of locked capital, aligning with zeroDAO's primary objective.

3. **Incentivized Security:** Enhances the security of non-EVM assets on their native chains.

4. **Validator Incentives:** The yield generated by staked LSDs is used to incentivize network validators, aligning incentives between validators and stakers who manage the keys securing non-EVM assets on their native chain.

By partnering with platforms like EigenLayer, ZERO Network could further enhance capital efficiency and security. EigenLayer's unique approach to Ethereum 'restaking' could attract additional ZERO stakers, enhancing network security and supercharging earnings from multiple revenue streams.

To learn more about ZERO's potential EigenLayer integration, check out our recent article: [Advancing Decentralization with Ethereum Re-staking](https://zerodao.com/blog/zero-network-advancing-decentralization-with-ethereum-re-staking/).

## Summary

By integrating LSDs into its ecosystem, the ZERO Network could offer a multi-dimensional DeFi experience that combines interoperability with yield, liquidity, and security. This could position ZERO as a major player in the rapidly evolving LSD market, offering users innovative ways to maximize their returns while minimizing risks.

To learn more about zeroDAO's roadmap, including the upcoming testnet launch and NFT collection, check out our [recently published articles](https://zerodao.com/) and stop by the [Discord channel](https://discord.com/invite/w5SU2pvD8B).




Unlocking new avenues for yield, liquidity, and cross-chain interoperability.

How LSDs Could Shape the Future of the ZERO Network

![header-image-nft-blog.jpg](https://i.ibb.co/VpJky5V/header-image-nft-blog.jpg)

zeroDAO is excited to introduce the ZERO Heroes NFT collection – an innovative mechanism for providing liquidity to the network’s native asset, $ZERO. 

Let’s delve into how they work, the value of holding, and how you can secure your own ZERO Hero! 

## The LP Process: How ZERO Heroes Work

The ZERO Hero collection will consist of 3,000 uniquely minted NFTs that will serve as a liquidity provision mechanism to the $ZERO token. 

Users will receive a ZERO Hero NFT by contributing $ETH on mint day (price per mint will be announced via socials). zeroDAO will then pair this $ETH with $ZERO tokens to be deposited into liquidity pools.

![zero-nft-LP.jpg](https://i.ibb.co/RzwtfDX/zero-nft-LP.jpg)

## The Value of Holding Zero Heroes

While they may look like traditional art-based or PFP NFTs, the Heroes are much more than digital collectibles.

ZERO Heroes provide an innovative strategy to enhance liquidity for the $ZERO token, and allow holders to be part of the Diamond Hands game!

## Diamond Hands

ZERO Heroes will incorporate a Diamond Hands NFT game, designed to encourage long-term holding, while benefiting both users and the ZERO Network.

Upon network launch, NFT holders can optionally redeem or burn their tokens for the underlying LP ($ETH and $ZERO) at any time – resulting in a potentially deflationary NFT supply. 

However, burning may be sub-optimal, as the redemption process is non-linear and is engineered with an exponential liquidity redemption curve. Simply put, the smart contract is engineered so early redeemers receive fewer LP tokens than those who redeem later – Diamond Hands! 

#### Why is this important?
This process incentivizes users to hold on to their NFTs for a longer duration or swap on secondary markets (as opposed to burning), and will ultimately lead to deeper liquidity for the $ZERO token.

## Mint Information

The ZERO Heroes collection will consist of 3,000 uniquely generated 1/1 NFTs. 
Each hero minter will have a maximum limit of 10 NFTs per address, and all mints will be equally priced to ensure a fair and broad distribution. 

The enthusiasm for these tokens has been significant, with +2,000 addresses already whitelisted. To check if you’re eligible for a whitelist mint, visit the [zeroDAO website](www.zerodao.com). Next, click ‘Heroes’ on the navigation menu and enter your public Ethereum address in the whitelist lookup modal.

![whitelist-lookup.png](https://i.ibb.co/yWbjL7x/whitelist-lookup.png)

zeroDAO has decided that it's best for the network and its participants to over-allocate the mint. The exact figure will depend on a range of factors, including Ethereum gas prices leading up to the mint and the number of new whitelist applicants.

More information on whitelisting, public sales, NFT pricing, and allocations will be published on zeroDAO's Twitter and Discord in the coming weeks.

## Summary

The ZERO Heroes NFT collection is a creative solution for generating liquidity for the $ZERO token. The unique "Diamond Hands" game encourages and incentivizes long-term holding by rewarding later redeemers with more LP tokens. 

By redefining the value and utility of NFTs and incentivizing holding, ZERO Heroes not only deepen liquidity but also contribute significantly to the sustainability of the ZERO Network.

Stay tuned for further updates on ZERO Heroes NFT drop and zeroDAO's mission to shape a more efficient and interconnected blockchain ecosystem.

## Contact Us

For partnership or investment inquiries email jon@zerodao.com 

[Docs](https://docs.zerodao.com/)｜[Twitter](https://twitter.com/zerodaoHQ) ｜[Discord](http://discord.gg/w5SU2pvD8B) ｜[Matrix](https://matrix.to/#/%23general:matrix.zerodao.gg)｜[GitHub](https://github.com/zerodao-finance) | [Website](https://zerodao.com/)

Introducing ZERO Heroes NFT collection and the mechanism for providing liquidity to $ZERO

Introducing ZERO Heroes: The Liquidity-Generating NFTs

The crypto ecosystem is a diverse space, full of unique coins and tokens, each offering a range of features and functionality. 

While the majority of these assets were initially designed to live on their native blockchains, the rise of DeFi necessitated a way to bring assets like Bitcoin cross-chain. 

This article explores the growing necessity of efficient, secure and decentralized multichain interoperability and highlights the significant role BTC plays in the future of DeFi, specifically within the Ethereum ecosystem.

## The Race for Layer 1 Dominance

As the pioneering blockchain and digital currency, Bitcoin currently accounts for 50% of the total crypto marketcap. It serves as a store of value, commonly referred to as "digital gold". 

![https://i.ibb.co/PgNBBGF/btc-dom.png](https://i.ibb.co/PgNBBGF/btc-dom.png)

Ethereum, on the other hand, with its smart contract capabilities, has ignited a wave of innovation, notably in DeFi. With thousands of dApps utilizing its network, its dominance is rising, currently sitting at 20%.

![https://i.ibb.co/rkdttVK/eth-dom.png](https://i.ibb.co/rkdttVK/eth-dom.png)

Layer 2 scaling solutions, including Arbitrum, Polygon and Optimism, have also grown in popularity. While they may be considered 'multichain', these projects fall under the Ethereum umbrella, only adding to the overall market share of its ecosystem. 

Why is market dominance relevant?

Despite many blockchains, such as Solana and Avalanche, seeking to replicate the success of Bitcoin and Ethereum, this overwhelming dominance makes it abundantly clear that BTC and ETH remain the key players in the Layer 1 space. 

Additionally, Layer 2s becoming more prevalent and helping to contribute to Ethereum’s growing ecosystem emphasize the fact that Ethereum is the perfect place for BTC to prove its long-term DeFi utility.

## Why Bridge Bitcoin to Ethereum's DeFi? 

DeFi represents a new paradigm in financial systems. By leveraging the programmability of smart contracts on Ethereum, DeFi applications offer an array of financial services — from lending and borrowing to insurance and asset management — all without the need for intermediaries.

However, these possibilities should not be limited only to Ethereum-based assets – Ethereum is also seeing an influx of real-world assets (RWAs). 

These tangible, non-blockchain assets, like properties, equities, commodities, and even intellectual property, are being tokenized on Ethereum, broadening its capacity to bridge the traditional finance and crypto worlds.

Tokenizing these RWAs on Ethereum enables innovative possibilities like fractional ownership and broader market access and allows these assets to participate in DeFi. Their addition to Ethereum's DeFi space further enhances Bitcoin's utility there. With a greater variety of assets in the ecosystem, BTC can be leveraged in novel ways, broadening its use cases beyond serving as collateral.

With its large market cap and established reputation with both retail and institutional investors, Bitcoin can significantly enhance liquidity and stability within Ethereum's DeFi and RWA space.

Although this has been addressed to a certain degree, problems persist in creating secure and efficient bridges for BTC and other non-EVM cryptos to interact with Ethereum's DeFi ecosystem. 

Current bridging solutions face limitations due to trust issues, inefficiency, and limited interoperability, while tokenized alternatives, such as Wrapped Bitcoin (WBTC), have come under scrutiny due to centralization concerns.

## ZERO Network: Paving the Way for Bitcoin's Cross-Chain Transition

The core focus of the ZERO Network is to address the problems faced by existing cross-chain solutions and help to bridge the gap between Bitcoin and Ethereum.

The network's model ensures that BTC transferred from the Bitcoin blockchain to Ethereum is securely backed by the original assets, represented as $zBTC. This is achieved through a unique economic model that emphasizes collateralization and staking for assets bridged onto EVM networks.

When assets like BTC are transferred from their native chains, they are replaced with equivalent tokens on the destination chain, with native tokens held by a key managed collectively by all participating signing nodes. This decentralized key management system ensures the asset's safety while enabling it to interact freely within Ethereum's DeFi space.

## The Importance of Bitcoin's DeFi Integration

With BTC on Ethereum, users can interact with Bitcoin in entirely new ways, participating in yield farming, lending and a range of other DeFi activities.

With its substantial market cap and broad adoption, Bitcoin can serve as a significant source of liquidity. This could lead to more stable prices, lower borrowing costs, and enhanced market efficiency within the DeFi sector.

Bridging also enables Bitcoin holders to fully utilize their assets, earning yields through lending and liquidity provision. This creates an avenue for Bitcoin to do more than just sit as a store of value, allowing it to interact with, and contribute to, the Ethereum ecosystem.

Check out zeroDAO's recent article on the ZERO Network for a full breakdown of network economics, staking and governance, enhanced interoperability, as well as its unique liquidity-generating NFTs – The ZERO Heroes.  

## Summary

In an ever-evolving blockchain landscape, networks must coexist and interact to leverage their strengths. Although Bitcoin and Ethereum are fundamentally different, they are equally important to the mainstream adoption of DeFi and blockchain technology as a whole.

With ZERO Network's bridging solutions, the friction between these blockchains is reduced. Cross-chain interoperability is an essential step toward a more integrated and efficient ecosystem.

Thanks for tuning in, ZERO Heroes! Stay updated with the latest developments by following the zeroDAO [Twitter Page](https://twitter.com/zerodaoHQ) and joining the [Discord Channel](http://discord.gg/w5SU2pvD8B).

## Contact Us

For partnership or investment inquiries email jon@zerodao.com 

[Docs](https://docs.zerodao.com/)｜[Twitter](https://twitter.com/zerodaoHQ) ｜[Discord](http://discord.gg/w5SU2pvD8B) ｜[Matrix](https://matrix.to/#/%23general:matrix.zerodao.gg)｜[GitHub](https://github.com/zerodao-finance) | [Website](https://zerodao.com/)

A look at Ethereum and Bitcoin and how the ZERO Network seeks to bridge the differences of these blockchains

The Road to Interoperability: The Importance of BTC in DeFi

Bitcoin’s recent rally above $30,000 has reignited debates surrounding where we’re positioned in the current market cycle. Are we witnessing a sustainable rebound, or are these trends merely a precursor to another downturn?

This article aims to determine where we are in the current market cycle based on data from a range of indicators and statistics, including the MVRV Z-Score, BTC exchange flows and hash rates. We'll also explore the implications of Blackrock's ETF application and take a look at how the Bitcoin halving event has affected prices during previous cycles.

## Market Value – Realized Value

A primary indicator worth examining is the Market Value to Realized Value Z-Score (MVRV Z-Score), which gauges whether Bitcoin is over or undervalued.

Historically, the Z-Score falls into the green zone during bearish market phases, indicating that Bitcoin is trading at a low value and the bottom of the cycle is forming. But as the chart shows, each time the metric exceeded the 0.5 to 1 range (exited the green zone), the price of BTC experienced a significant increase, signaling the start of a bull market.

![https://i.ibb.co/L5nnxkL/MVRV-Z-Score.png](https://i.ibb.co/L5nnxkL/MVRV-Z-Score.png)

As of June 2023, the Z-Score for Bitcoin is approximately 0.7, with a total marketcap of $595 billion. Based on historical data, this suggests the BTC is in a state of accumulation and that a distribution phase may be around the corner.

To put things in perspective, in late 2020, Bitcoin's Z-Score broke and held above 1 before peaking at around 7. During this time, the price of BTC skyrocketed from $12,000 to over $60,000 – a rise of +420%. 

Similar price rallies were witnessed after a Z-Score breakout in the 2013 and 2017 bull runs.

## Exchanges Reserves

Another significant indicator to observe is Bitcoin exchange reserves. Over the past year, a significant amount of BTC has been withdrawn from exchanges. This increase suggests a greater tendency among investors to hold rather than trade, anticipating a future price rise.

![https://i.ibb.co/PrTYVcD/exchangebalance.png](https://i.ibb.co/PrTYVcD/exchangebalance.png)

According to data from CryptoQuant, the amount of BTC held in exchanges has fallen from over 2.5 million in mid-2022, to less than 2.2 million in mid-2023. 

Historically, significant price rallies have been observed following periods of high net outflows.

## The Impact of Hash Rate on Bitcoin's Value

The hash rate reflects the computational power used to secure the Bitcoin network. In the past, a strong correlation has existed between Bitcoin's price and its hash rate. 

![https://i.ibb.co/Qrgs8dH/btc-hashrate289.png](https://i.ibb.co/Qrgs8dH/btc-hashrate289.png)

As of June 2023, the hash rate stands at 289 EH/s, up from 212 EH/s this time last year. This uptrend suggests increased miner activity, reflecting confidence in the network's future profitability and hinting at potential upward price movement.

## The Halvening

The analysis of Bitcoin's current market phase would be incomplete without considering the upcoming Bitcoin halving event, or, as it’s colloquially known, ‘The Halvening’, which is set to occur in April 2024. 

Approximately every four years (210,000 blocks), Bitcoin undergoes a halving, which cuts the reward for mining new blocks in half. Following each of the past three halvings (in 2012, 2016, and 2020), the price of Bitcoin increased significantly. 

![https://i.ibb.co/T48z6cF/05cae75061eb577ed21cba5ff1ce32ee.png](https://i.ibb.co/T48z6cF/05cae75061eb577ed21cba5ff1ce32ee.png)

For example, in the year following the 2016 halving, Bitcoin’s price appreciated by over 2,800%, and in the year following the 2020 halving, Bitcoin’s price surged by approximately 450%. 

Will the upcoming halving in 2024 catalyze another considerable price surge?

## BlackRock's ETF Application: Institutional Recognition in Sight?

BlackRock, the world's largest asset manager, recently applied for a Bitcoin Exchange Traded Fund (ETF), which, if approved, would play as a major bullish catalyst. 

While the ETF would likely lead to substantial institutional investment, opinions are torn regarding BTC’s worth at an institutional level. 

Bitcoin is still in the early stages of achieving full recognition as an institutional asset class. Although it has been coined ‘Digital Gold’, comparing the two assets underscores this point. 

Gold’s marketcap sits around $12.65 trillion, dwarfing BTC, which is about $585 billion. Bitcoin's marketcap would have to grow over 20-fold to match that of Gold. 

![https://i.ibb.co/PCZ9SvZ/gold-chart.png](https://i.ibb.co/PCZ9SvZ/gold-chart.png)

In the 20 years since a Gold ETF was first released in March 2003, its price has risen from less than $400/oz to current levels of close to $2,000/oz.

Would an approved BlackRock ETF have a similar effect and act as the catalyst that pushes BTC mainstream?  

## What’s Next for the World’s Largest Crypto?

The blend of Bitcoin's current undervalued MVRV Z-Score, promising exchange outflows, recent price surges and the looming halving event indicate strong market confidence and suggest a positive price trajectory. 

However, as we've seen time and time again in the crypto space, anything can happen, and past performance does not necessarily guarantee future results. 

Also, Bitcoin's journey toward institutional recognition is far from over. Its $585 billion marketcap is less than 5% of that of Gold, demonstrating it has a long way to go before it's considered a 'mainstream' asset class.

Regulatory compliance, increased market stability and institutional recognition, such as the BlackRock ETF, will most certainly be required to take BTC to the next level and to reach such a status.

Thanks for tuning in, ZERO Heroes! Stay updated with the latest developments by following the zeroDAO [Twitter Page](https://twitter.com/zerodaoHQ) and joining the [Discord Channel](http://discord.gg/w5SU2pvD8B) — we'd love to get your opinions on the state of BTC and what to expect leading into the second half of 2023. 

## Contact Us

For partnership or investment inquiries email jon@zerodao.com 

[Docs](https://docs.zerodao.com/)｜[Twitter](https://twitter.com/zerodaoHQ) ｜[Discord](http://discord.gg/w5SU2pvD8B) ｜[Matrix](https://matrix.to/#/%23general:matrix.zerodao.gg)｜[GitHub](https://github.com/zerodao-finance) | [Website](https://zerodao.com/)

Determining current market cycle, examining Blackrock's ETF application, and a taking a look on how the Bitcoin halving event has affected prices.

Is a Bitcoin Bull Run on the Horizon? Unraveling Market Trends

## What are BTC Ordinals & what role could they play in the future of crypto?

In early 2023, the crypto space was introduced to a novel concept, which paved the way for the creation of Bitcoin Ordinals – otherwise known as BTC NFTs.

Let’s take a look at what exactly Ordinals are, how they differ from traditional NFTs and what’s in store for the future.

## The Mechanics of Ordinals

Bitcoin Ordinals are unique identifiers inscribed onto individual satoshis (the smallest unit of BTC).
Four unique identifiers define each Ordinal:
1. The index of the satoshi in the block
2. The cycle number
3. The index of the block within the difficulty adjustment period
4. The index of the block in the halving epoch

This distinctive identifier system ensures that each inscription is unique and potentially valuable, depending on when it was minted.

Though Ordinals are often labeled as Bitcoin's version of NFTs, they differ from Ethereum-based NFTs. Instead of storing off-chain data through pointers, they inscribe raw file data directly onto the Bitcoin blockchain.
Here's a breakdown of how Bitcoin NFTs differ from the more familiar Ethereum-based alternatives.

**Ethereum NFTs:**
An Ethereum-based NFT is essentially a smart contract conforming to standards like ERC-721 or ERC-1155. These standards record ownership and transfer tokens but don't necessarily contain any "content" or "data." Instead, they typically reference (or point to) the content stored on a separate system, such as IPFS.
**Bitcoin NFTs:**
Bitcoin Ordinals introduce a different method, inscribing the actual content/data within the blockchain transaction itself rather than referencing an external storage location.

## BTC vs ETH NFTs: Pros & Cons
Depending on your perspective, the differences between NFTs on Bitcoin and Ethereum could be seen as an advantage or disadvantage.
Ordinal data is stored directly on the blockchain, ensuring it's immutable and always accessible as long as the blockchain exists.
While this sounds like a further step towards decentralization, it has led to bloating of the Bitcoin blockchain, as storing data directly takes up more space than just recording a pointer to off-chain data. During its peak adoption in May, there were noticeable slowdowns in block confirmation and transactions, leading to discord among Bitcoin developers.

## Adoption Potential: BTC NFT Flippening?
Recent times have seen a decline in Ethereum-based “blue chip” NFTs. The floor price of one of Ethereum's most notable collections, Bored Ape Yacht Club, has fallen from its 2021 all-time highs of over 120 ETH to below 35 ETH.

 ![https://i.ibb.co/1zTzCdP/bayc-floor.png](https://i.ibb.co/1zTzCdP/bayc-floor.png)

Another popular collection, Azuki, recently witnessed a 42.8% price drop, falling from a 16.25ETH to 6.98ETH floor in a matter of days following technical difficulties during the mint of its latest collection, “Elementals”. 

![https://i.ibb.co/ZM58Zjr/azuki-floor-price.png](https://i.ibb.co/ZM58Zjr/azuki-floor-price.png)

With the majority of floor prices down significantly from all-time highs, many are questioning the state of Ethereum's NFT market and its long-term sustainability.

Could Ordinals present a more decentralized and profitable solution?

![https://i.ibb.co/myhgyJ9/ordinals-inscriptions-overtime.png](https://i.ibb.co/myhgyJ9/ordinals-inscriptions-overtime.png)

The rising popularity of Ordinals has led to significant growth in inscriptions, with over 16.53 million currently recorded. 

![https://i.ibb.co/cQSRc8M/ordinals-sales-record.png](https://i.ibb.co/cQSRc8M/ordinals-sales-record.png)

This has also led to a spike in sales across the Bitcoin NFT market.
Over the past 30 days, Bitcoin NFT collections, Uncategorized Ordinals, and $FRAM BRC-20 NFTs have been ranked in the top 10 collections by sales volume, outperforming many major Ethereum counterparts.

## Zero Network and the Potential of BTC NFTs

Currently, Ordinals are inscribed directly onto the Bitcoin blockchain. Yet, their potential applications extend far beyond the Bitcoin ecosystem. 

zeroDAO aims to facilitate secure and efficient bridging for BTC and other non-EVM cryptos to interact with Ethereum and other blockchains. This opens up the possibility for Ordinals to be utilized across the broader crypto ecosystem.

For instance, with Zero's bridging solutions, Ordinals could theoretically interact with smart contracts on Ethereum and participate in Ethereum's NFT ecosystem.

The unique data inscribed onto each Ordinal could also be securely and efficiently transferred across chains. This paves the way for opportunities, such as using the unique attributes of Bitcoin Ordinals within Ethereum-based dApps or other applications on EVM and non-EVM networks.

## The Journey Ahead for Bitcoin Ordinals

While the introduction of Bitcoin Ordinals has stirred challenges within the Bitcoin network, such as noticeable slowdowns in block confirmation and transactions, it also ushered in an era of fresh perspectives for Bitcoin utilization. 

However, it is undeniable that Bitcoin Ordinals have brought a fresh perspective to the way Bitcoin is utilized. With the upcoming launch of the Zero Network, cross-chain utility for Ordinals is closer than ever, potentially broadening their market and use cases across different crypto ecosystems. 

This can bring about a whole new level of interactions between Bitcoin and other blockchain technologies, opening up a world of possibilities that go far beyond what we currently understand as the potential of NFTs.

Could a Bitcoin NFT flippening be on the horizon? With cross-chain interactions, the answer might be closer than we think. 

Join the conversation on the [zeroDAO Discord channel](https://discord.com/invite/w5SU2pvD8B) and share your thoughts on the future of Ordinals and what they could mean for the adoption of the NFT and crypto markets.




A brief on Ordinals and a speculation on opportunities to come.

Bitcoin Ordinals: Exploring the Potential of Individual Satoshis

Zero Network: Advancing Decentralization with Ethereum Re-staking

## Exploring the Synergy between ve-Style Economics and ETH Re-staking

Bridging economics is a complex task due to the necessary balance between maintaining trust and decentralization.

A common stumbling block for these systems is that revenue doesn't scale with risk, a problem observed with renBridge. Although REN was one of the most popular BTC bridges to date, it was unable to sustain attractive or sustainable returns for stakers. 

![https://i.ibb.co/VVXcbCJ/ren.png](https://i.ibb.co/VVXcbCJ/ren.png)

The zeroDAO team is exploring a solution that targets the root of the problem while navigating the intricacies of bridging economics.

## Reworking Bridging Economics

Every network facing bridging economics grapples with how to make staking returns attractive, manage trust, and maintain decentralization. 

Traditional strategies to address these challenges usually involve increasing fees per minting of tokens and expanding the volume of transactions through marketing campaigns, partnerships, and incentives to attract more participants.

But what if the equation that governs these strategies is reworked? 

**[Fee revenue needed /yr for protocol safety] = [Value in Custody] * [Required APR for Stakers]**

The modified equation would lower the required fee revenue to ensure protocol safety without relying heavily on the volume of transactions. 

The strategy involves:

1. Implementing a burn subsidy to minimize risk.
2. Using liquid-staked ETH for staking.

This approach has the potential to reduce the scale of the problem and offer a more sustainable solution.

## Embracing veLSD: ve-Style Economics Meets Ethereum Re-staking

Another strategy being explored by the Zero team is the implementation of a combination of ve-style tokenomics with Ethereum re-staking. 

ve-style tokenomics (voting escrowed) are systems where holders can lock their tokens for an extended period in exchange for rewards and increased voting power in governance decisions.

![https://i.ibb.co/P5ZdK9B/image1ethrestaking.png](https://i.ibb.co/P5ZdK9B/image1ethrestaking.png)

Ethereum re-staking, on the other hand, lets participants stake their ETH, secure the network, and earn rewards without needing to sell their tokens. 

Together, these models hold strong potential – let’s take a look at how the combination would work and the benefits it would offer.

If a governing token was introduced (veZERO), this would help bring together these strategies and attract a substantial amount of ETH-backed collateral. 
Governance premium also acts as a powerful incentive for more liquid staking protocols to participate in the network. As protocols get involved, demand for their assets increases.

To make this more rewarding, veZERO rewards would be directly linked with the staked amount, encouraging token holders to stake more – creating a cycle that strengthens the network.

## Staking and Fee Production

Creating a reflexive relationship between staking and fee production is key, as higher fees naturally attract more stakers. To support this, the network would channel all minting fees directly to stakers.

These fees would then be distributed pro rata with a small power (rewarding large stakers slightly more proportionally) and a portion distributed evenly across the top 256 stakers who acted as signers during the most recent epoch.

Stakers would enjoy an increased degree of flexibility in their commitment:

1. Ability to adjust staked assets mid-epoch
2. Reduce overall stake at the end of each epoch

A lock-in period of 2 epochs (~60 days) would also be an attractive feature for LSD protocols – encourage long-term commitment while allowing for mid-term adjustments.

## Liquidation and Network Security

Guarding against collusion among stakers plays a crucial role in all staking and re-staking designs and necessitates the liquidation of backed assets. 

For example, if stakers misappropriated the BTC backing 'zBTC', a liquidation event would be triggered.

![https://i.ibb.co/n0wKfZT/image2-eth-restaking.png](https://i.ibb.co/n0wKfZT/image2-eth-restaking.png)


This action would make all the staked ETH redeemable by zBTC holders, ensuring that zBTC always retains tangible value.

## Incorporating Third-party Re-staking Protocols

In addition to its own strategies, Zero’s implementation would have the ability to incorporate third-party re-staking protocols like EigenLayer into its structure through gauge requests.

Although integrating a third-party protocol may introduce extra risk at first, as the protocol matures, the inclusion of these re-staking gauges would effectively enhance staking security.

![https://i.ibb.co/WHm00qM/image3-ehrestaking.png](https://i.ibb.co/WHm00qM/image3-ehrestaking.png)

Zero's unique approach could also serve as a model for other protocols, opening a new design space where ETH can be used as the core collateral asset while still allowing value to accrue to the native protocol governance asset.

## Wrapping Up

While all models are currently theoretical, the zeroDAO team will continue to explore solutions to the challenges posed by bridging economics. This is an area that has traditionally struggled with trust, decentralization, and ensuring revenue scales with risk – an area that would benefit from a restructured design.

Zero's approach involves altering the fee-and-revenue model by implementing a burn subsidy and using liquid-staked ETH tokens. This strategy would reduce the overall scale of the problem and introduce fresh value into the system.

Merging ve-style economics and Ethereum re-staking is also a focal point of zeroDAO’s research. Voting escrowed tokens have the ability to attract significant amounts of ETH-backed collateral – benefiting both stakers and the network.

To learn more about zeroDAO's roadmap, including the upcoming testnet launch and NFT collection, check out our [recently published](https://zerodao.com/) articles and stop by the [Discord channel](https://discord.com/invite/w5SU2pvD8B). 



Exploring solutions to the current challenges brought forth by bridging economics.

Zero Network: Advancing Decentralization with Ethereum Re-staking

While blockchain transparency appeals to many, there's a growing demand for private transactions and anonymity. How can users who prioritize privacy safeguard their transaction details when bridging assets across chains or participating in DeFi? 

Fortunately, a solution may be on the horizon!

Zcash ($ZEC), known for its privacy-centric features, and zeroDAO ($ZERO), which is gearing up to launch a new cross-chain bridge, may offer the key to solving DeFi’s privacy and interconnectivity challenges.

## Zcash Privacy Features

Zcash was one of the first projects to utilize zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). 

This cryptographic technique involves a prover and a verifier and operates within a peer-to-peer network. Its primary goal is to confirm transactions without revealing any specific details of those transactions.

1. **Prover**: For example, let's say you want to send $ZEC anonymously. As the prover, you would generate a cryptographic proof that confirms you own a certain amount of $ZEC without revealing your wallet's address or the amount you're sending. The proof meets certain criteria to assure the network that the transaction is legitimate.

2. **Verifier**: On the other side, network participants or another party act as the verifier. The verifier examines the proof to confirm that a valid transaction has taken place without learning who made the transaction or the specific amounts involved.

![https://i.ibb.co/HDSTbnK/prover-verifier.png](https://i.ibb.co/HDSTbnK/prover-verifier.png)

While many blockchains can verify transactions, Zcash stands out by confirming them without disclosing transaction details, making it a gold standard for privacy.

**For more information on Zcash and zk-SNARKS: [Learn Zcash](https://z.cash/learn/what-are-zk-snarks/)**

## zeroDAO's Bridging Ecosystem

The ZERO Network is designed to overcome the challenges of cross-chain bridging, including limited interoperability, centralization and technical inefficiencies. 

![https://i.ibb.co/Gkk0Dwm/ZeroDAO.jpg](https://i.ibb.co/Gkk0Dwm/ZeroDAO.jpg)

The platform's emphasis on collateralization guarantees that synthetic assets like zBTC and potentially zZEC are backed by the locked native asset as well as staked ETH.

**A deep dive into the ZERO Network: [Solving the Challenges of Cross-Chain Bridging](https://zerodao.com/blog/zero-network-solving-the-challenges-of-bitcoin-bridges/)**

## The Significance of Privacy and Decentralization in DeFi

Trust in DeFi relies on both privacy and decentralization. The lack of privacy features in most DeFi platforms can expose users to risks, while a centralized structure can erode trust.

Although Zcash offers strong privacy through the use of zk-SNARKs, it is not directly compatible with DeFi platforms, limiting its impact. 

The upcoming cross-chain bridge from the ZERO Network could bridge this gap, setting the stage for a decentralized and privacy-focused system.

#### **What Could an Integration Mean?**

Imagine you have Zcash in a shielded address and want to use these funds to participate in DeFi. 

An integration between zeroDAO and Zcash could offer a unique solution: the ability to move your ZEC directly to an Ethereum-compatible chain while keeping the transaction details completely private.

But privacy isn't just about anonymity; it serves multiple functions:

1. **Attracting Institutional Investment:** Privacy measures could make DeFi more appealing to institutional investors, who often require confidentiality for their larger transactions.

2. **Enhanced Security:** Keeping transaction details private adds another layer of security, making users less susceptible to targeted hacks or surveillance.

3. **User-Friendly Experience:** Navigating privacy features on the blockchain can be cumbersome. This integration could offer a seamless, one-stop solution for both cross-chain interoperability and transactional privacy.

4. **Future-Proofing DeFi:** This could set a precedent for other privacy and cross-chain collaborations, increasing the pace of innovation and broadening the scope of what DeFi can achieve.

#### **Challenges and Hurdles**

While the potential benefits are immense, integrating Zcash's privacy features into zeroDAO's infrastructure would also present challenges:

1. **Technical Complexity:** Merging zk-SNARKs with zeroDAO's existing infrastructure could be technically challenging, requiring extensive research, development, and testing.

2. **Regulatory Concerns:** Privacy coins have faced scrutiny in various jurisdictions due to concerns about misuse. It would be vital for zeroDAO to ensure that the integrated platform adheres to regulatory standards globally.

3. **User Education:** While privacy is coveted, it also introduces complexity. Ensuring that users understand the implications, benefits, and potential risks of privacy features would be crucial.

4. **Liquidity:** Users would need to support liquidity for zZEC on EVM chains to make the bridging process and deploying of ZEC into DeFi more seamless.

## Looking Ahead

Privacy and cross-chain interoperability continue to pose challenges within the DeFi space. With Zcash's standout privacy features and zeroDAO's bridging capabilities, each platform brings unique strengths to the table.

A collaboration between the two could change the game for DeFi, offering users privacy and cross-chain operations, while adding an extra layer of security and simplifying the UX.

Stay connected with us on zeroDAO's community channels. We're excited about the possibilities ahead and hope you are too!

A look into Zcash and how zeroDAO could offer a solution for solving DeFi's privacy and interconnectivity challenges.

Unlocking DeFi's Potential: Privacy and Decentralization with Zcash and zeroDAO

## A History on ZERO
Three years ago, we spun up a project we called “confirmation as a service”. The goal was to build a simple solution for what we saw as a pain point in the RenBridge flow, having to wait 6 confirmations for your renBTC to mint. 

![Confirmation-as-a-Service.png](https://i.ibb.co/MgSxgB1/Confirmation-as-a-Service.png)
_From January 2020_

There was no funding, or any aspirations of ever launching a token and we were all busy working on other projects at that time. Between then and now, there were updates to the RenVM protocol, a couple rebrands, and deployments and refactors of ZERO products. Finally, with RenVM pausing RenBridge in the aftermath of the FTX collapse, we have developed a renewed vigor for innovation as we branch out to create our own bridge implementation.

#### Notable Highlights of the past 36 months:
Receiving pre-seed investment from badgerDAO in 2021 to keep development going
Launching zeroBRIDGE
Processing more than 200 BTC in volume across Ethereum, Polygon, Arbitrum, and Optimism
Raising $1.3M in seed funding in 2022

## Last year 
zeroBRIDGE was functional, where users could swap renBTC and renZEC to WBTC, ETH, or USDC, with transaction execution handled by the keeper network over zerop2p.

We designed and implemented improvements to the protocol where users could bridge BTC in 0 or 1 confirmations using a reserve of capital on the target network. Also in the works was zeroPAY, A system for generating invoices in any denomination and accepting payment in any asset from any chain. Both solutions were permissionless and made use of the zerop2p network stack.

These products relied on RenVM as a bridge transport. zeroBRIDGE was a secondary p2p network built to facilitate cross-chain communication. However, in Fall 2022, the RenVM team was forced to pause the REN network to focus on the development of Ren 2.0, due to a cascade of events following the FTX insolvency. zeroDAO switched focus to filling the void in the bridging ecosystem left behind by the closure of RenVM 1.0, and began development on the ZERO network.

## Where we are Now
There was never a discussion to stop and cut our losses. We pivoted our development towards building our own Bitcoin bridge to replace RenVM as the backbone of our architecture. Fortunately, members of the team had been assisting some other developers working on an XMR bridge, so we brought them in to collaborate and innovate together. We are now fully focused on a new bridge service that operates as a purpose-built layer zero network. We are dedicated to this project and are implementing several new concepts that we hope will lead to the most secure, reliable, and decentralized Bitcoin bridge to date.

**You can read more about what we are building [here](https://docs.zerodao.com/)**

TL;DR : We’re using FROST for signers to manage collectively signing bridge transactions

## zeroBRIDGE Features
**A Pure Bridge** - zeroBRIDGE will only ever be a pure bridge, as we do not have any aspirations for it to become a fully functional L1. We will only entertain additional functionality if it serves to add to the core purpose of being the best, most secure bridge for non-EVM assets. &nbsp;  

**Increase Staking Security** - Along with ZERO staking, zeroBRIDGE will incorporate native ETH staking. For any equal value of ZERO and ETH, stakers should need less of a return on ETH to join staking. This means the protocol should attract more security for any arbitrary level of fee generation. We are looking at partner protocols to help incorporate the re-staking component. &nbsp;  

**Incentivize low float** - Users should only move assets off their native chain if they have a good reason to do so. zeroBRIDGE will have a mint fee and a burn subsidy. If any zASSETS are not actively earning, holders will be better off burning them back to their native chain. Lower float = less risk &nbsp;  

**Real Backing** - In most PoS style systems, malicious stakers are slashed, meaning their stake is burned. In a system where ETH is being re-staked that would be wasted value when it could be used to improve the situation. In the zeroBRIDGE system, in liquidation mode, staked ETH will be auctioned off for zBTC. Therefore staked ETH = real backing for zBTC, not just an incentive for signers to behave with integrity.

## Where we are going
There is still a lot of work to do to get the bridge live. We are hoping to have it ready for testing and begin active review and audits by the end of February. We are still working on the initial mechanics and configurations for signer and validator staking and slashing. The goal is to eventually have the bridge operating in a fully decentralized, censorship resistant manner. In the beginning, when there may be fewer stakers and more volatility in the token value and the protocol usage, the network could be more susceptible to attacks. To address this, we are taking a phased approach to decentralization. Below is the current roadmap.

![Screen Shot 2023-02-08 at 9.48.55 AM.png](https://i.ibb.co/kmB1ypy/Screen-Shot-2023-02-08-at-9-48-55-AM-651a549006.png)

### Liquidity Initiation Event
zeroDAO has built out a new mechanism for launching the ZERO token which we are calling the Diamond Hands Liquidity Initiation Event. Users will be able to mint an NFT that will give them communal ownership of ZERO/ETH LP tokens. We expect this system to create a sticky base of liquidity. More details will be released in a subsequent article post.

### Validator Staking goes live
Participants will be able to stake ZERO/ETH LP to earn more ZERO tokens. This will be a fixed release of tokens, but it will be switched to being based off of fee revenue once the full network is live. This will create the base for governance needed to launch the protocol.

### Private Signer staking goes live
Signers will stake ZERO to register a node and stake ETH LSDs (rETH, stETH, etc) to participate in signing and receive fee distributions. During the initial stages of release, in order to seed the network with a sufficient level of trust, only whitelisted addresses will be able to participate.

### BTC bridge & zBTC go live
Once a sufficient number of trusted signers are in place, the bridge and zBTC can go live. Temporarily, addresses on the OFAC list will be blocked from using the service.

### Open whitelisted signer staking goes live
This will be a stage of expansion to increase signing nodes. During this time, this will be through an expanded whitelist to maintain sufficient confidence that node participation is not becoming concentrated into any one entity.

### Signer slashing mechanism goes live
Governance-based slashing mechanisms are implemented.

### Open signer staking with blacklist goes live
Signing nodes are open to all to run outside of OFAC blacklist

### Decentralized ETH re-staking
Remove reliance on 3rd-party ETH staking derivatives, which requires governance to approve. Replace with decentralized alternative.

### Automated Slashing/Shutdown mechanism
Governance shutdown replaced with a decentralized alternative to gracefully wind down the network if signers act maliciously.

_**AT THIS POINT THE NETWORK IS SUFFICIENTLY DECENTRALIZED**_

### Remove blacklists or launch parallel fully open network
Evaluate the state of the network and determine if it is best to remove upgradability and all governance components to make it fully open and decentralized or launch a parallel, open network.

## ZERO Token 
The ZERO token will be necessary to perform critical functions in the ZERO network.
### Participants
There will be two sets of actors actively participating in the ZERO network who will both utilize the ZERO token.
#### Signers
Will stake a fixed amount of ZERO bond to activate their node and then to participate in signing will also need to stake ETH (or, initially, an ETH staking derivative).  Signers work together to process ll bridging activity.  If > ⅔ are compromised than they could collaborate to steal the BTC backing zBTC, which is why the staking is necessary.
#### Validators
Validators will be processing blocks and participating in governance.  In the earlier phases of rollout this includes monitoring solvency and having the ability to liquidate signers.  Validators will stake ZERO/ETH lp tokens and in return receive ZERO token emissions based on volume processed through the network.  
![Screen Shot 2023-02-08 at 10.00.56 AM.png](https://i.ibb.co/vqT43fX/Screen-Shot-2023-02-08-at-10-00-56-AM-c9392bcfd3.png)

### ZERO Launch
The token may launch prior to network launch. A new mechanism centered around an NFT collection will be used to launch the token and seed initial liquidity.  Details will be released in an upcoming post.

#### ZERO Emissions
Once the network is live the ZERO token will be used as an incentive for validators.  The more volume through the network, the more tokens validators earn.  Tokens may also be used for directing external yield through LP staking, supporting zASSET yield to create demand, and other activities supportive of the Zero network.  Signers and Validators will be able to participate in governance relating to the ZERO token.


## Looking Forward
We don’t know how long each one of these steps will take, but this gives us a clear path forward. There are other matters to consider like supporting zASSETS and encouraging the use of the bridge. We plan to use the ZERO token to create yield opportunities for zASSETS in DeFi and to offer incentives to parties that incorporate and drive volume through the zeroBRIDGE. 


![z-dao-highway.png](https://i.ibb.co/dcdcBss/z-dao-highway.png)

Along the way, we will also be re-incorporating the convenience features we brought live last year, and re-launching the entire suite of ZERO applications, including zeroBRIDGE+, zeroSWAP, and zeroPAY. We will be putting out more content over the subsequent weeks going into more detail about many of the topics discussed above.
## The zeroVerse
Over the years we have had the great fortune to work with many talented people across DeFi, and, where possible, we try to support their ambitions either as part of the ZERO team or outside of it. We expect and hope for this to continue in the future.
As new projects launch, where appropriate, ZERO may be granted some exposure. We have built out a mechanism we call entanglement pools to create positive sum relationships between the tokens of two distinct entities. More info to come for associated projects and the mechanism. If you are interested in working with the zeroVerse, please join the [Discord](https://discord.com/invite/BQ5QZzZhv9) and reach out.
## FAQs
#### Wen Token?
We will not be launching the token before we have a full design of all of the staking mechanics and a clear expected network launch date.
#### Is this a DAO?
While there will be some governance needed in the beginning, the goal is governance minimization so the bridge can be as trustless and censorship resistant as possible. Governance may still be active around the ZERO token and for other matters.
#### Is this just for Bitcoin?
We will start out supporting BTC exclusively at first. However, we are looking to support XMR and ATOM in later releases. If you are active in these ecosystems and would like to support that effort, please reach out to us.
#### Are L2s or sidechains supported?
Initially we will only be supporting minting to Ethereum, but we will roll out support to all EVM compatible chains/L2s. All forms of staking and the core smart contracts, however, will remain on Ethereum.
#### What does this mean for ZERO and REN?
We maintain a good relationship with the RenVM team and will stay in contact as both projects move forward and look for creative opportunities for collaboration.

## Contact Us

For partnership or investment inquiries email jon@zerodao.com 

[Docs](https://docs.zerodao.com/)｜[Twitter](https://twitter.com/zerodaoHQ) ｜[Discord](http://discord.gg/BQ5QZzZhv9) ｜[Matrix](https://matrix.to/#/%23general:matrix.zerodao.gg)｜[GitHub](https://github.com/zerodao-finance) | [Website](https://zerodao.com/)


A short reflection on the history of ZERO and a look ahead to ZERO's roadmap for 2023

ZERO, a Reflection and Roadmap for 2023

# ZERO
### an L0 for non-EVM, powered by FROST

For anyone active in the space, we have seen the landscape change rapidly as events have unfolded. The L0 ecosystem has seen fewer options for trustless bridging and the void left behind due to this upheaval are noticeable to say the least.

The engineering force at zeroDAO has been working to bring the world a new cross-chain framework, built from the ground up, starting with the same p2p software components that allowed the original zeroBRIDGE application to facilitate hundreds of BTC in cross-chain trade over this past incredible year.

For bridging useful non-EVM assets such as BTC, ZEC, and XMR, and trading it to assets such as ETH or USDC, a solution is desperately needed now more than ever. ZERO has been designed to bring cross-chain to a higher standard than ever before, to blur the lines between networks and provide the focal point in decentralized trade as we know it.

## The ZERO network

The release of the new ZERO network, as well as the ZERO network token (ERC20), is approaching. Signing groups responsible for locking or releasing non-EVM assets such as BTC, associated with a cross-chain message, will make use of the FROST multiparty cryptosystem, implemented in Rust and built to WASM. The FROST secp256k1 implementation we've developed internally works with taproot addresses as they exist on the BTC network. Our Solidity implementation of Schnorr signature recovery for signatures produced by the ZERO network is now, also, fully functional. 

Project repositories have been published to:

[https://github.com/zerodao-finance/frost-taproot](https://github.com/zerodao-finance/frost-taproot)

[https://github.com/zerodao-finance/frost-taproot-wasm](https://github.com/zerodao-finance/frost-taproot-wasm)

[https://github.com/zerodao-finance/solidity-frost-taproot-recover](https://github.com/zerodao-finance/solidity-frost-taproot-recover)

The ZERO network wire protocol is designed for space-efficiency as well as portability. Transactions and unsettled cross-chain messages on the ZERO network propagate using sketches to reconcile set differences. A WASM build of the minisketch implementation of the PinSketch algorithm, originally designed to improve the network performance of BCH, is included with the ZERO nodes, and is now published on GitHub at:

[https://github.com/zerodao-finance/libminisketch-wasm](https://github.com/zerodao-finance/libminisketch-wasm)


## Economics

The economics behind classic solutions in cross-chain messaging have not supported a truly decentralized model, therefore the lessons we've learned through the short history of L0 have been built into ZERO.
Assets bridged onto EVM networks using ZERO will use a collateralization/staking model slightly different from pre-existing networks. The ZERO token itself can be staked to earn passive revenue from cross-chain bridging and trade, and the token will function as a backstop for liquidation events, but only a portion of the collateral backing bridged assets will be ZERO. Stakers can also bring rETH/stETH to earn complimentary yield.

In addition to the inclusion of less volatile collateral, an economic incentive for burning bridged assets back to their native chain via ZERO will exist such that arbitrageurs can extract MEV and improve market health. With less capital locked in wrapped assets, we reduce the strict collateral requirement and lower stakers' exposure to risk.


Stay tuned for updates as we approach launch of ZERO!


###  Contact Us

[Bridge](https://bridge.zerodao.com/#/release/renBTC)｜[Twitter](https://twitter.com/zerodaoHQ) ｜[Discord](http://discord.gg/BQ5QZzZhv9) ｜[Matrix](https://matrix.to/#/%23general:matrix.zerodao.gg)｜[GitHub](https://github.com/zerodao-finance) | [Website](https://zerodao.com/)

Announcing the ZERO Network, an L0 for ETH, BTC, and XMR, powered by FROST

Interoperability Optimized

The Problem

Crypto's Accessibility Challenges

The Solution

Bridging with Security and Speed

Heroes

The Foundation

ZERO Heroes are the foundation of the ZERO Network

Blog