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.

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

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. Below is the current roadmap.

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.

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.

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 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

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