ZERO, a Reflection and Roadmap for 2023

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.

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.

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.

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.

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

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.

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.

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.

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.

Contact Us For partnership or investment inquiries email jon@zerodao.com

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