The Zero Network: Cross-Chain Bridging for BTC and non-EVM Assets
Published On: 5/5/2023
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:
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.
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.
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.
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.
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:
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.
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.
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.
Staking and Governance
Users can stake their $ZERO / $ETH LP tokens in the sZERO 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:
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 $ZERO tokens are used to create a liquidity pool for the network.
Incentivized holding: Hero NFTs are designed as diamond hands NFTs, incentivizing long-term holding. Once the ZERO network is live, NFTs will be redeemable for the underlying LP ($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.
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.
Network Architecture: Key Actors and Their Roles
The ZERO Network relies on several key actors:
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 and an open-source codebase are available for reference and additional information and questions can be directed to the team via the zeroDAO Discord channel.
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.
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.
Thanks for tuning in, Zero Heroes!
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