Read this article to find out what a Layer 0 blockchain is, how it functions, and its critical role in the crypto & blockchain ecosystem.
Introduction
Layer-0, which is the foundation of blockchain technology, is the common base for all blockchain networks. A layer zero blockchain allows interconnected value chains to interact with one another to build the foundational infrastructure.
To comprehend how a particular project fits into the ecosystem as a whole, a classification of different blockchain layers is required.
L1
Layer 1 blockchains suffer from the blockchain trilemma, and typically only implement two of the three properties of the trilemma well (decentralization, security, and scalability).
Examples: Bitcoin, Ethereum, TON
L2
One of the issues with the blockchain trilemma for L1 is typically resolved by Layer L2, a third-party integration with L1. This is typically enhancing scalability. Third-party integrations like these make use of the following technical solutions:
State Channels are the process by which transactions are exchanged outside of the blockchain and the outcome is written to the blockchain itself (usually through a multi-signature smart contract).
Nested blockchains are the operation of an L1 blockchain on top of an L2 blockchain, which is more scalable due, for instance, to a less secure consensus mechanism. Rollups are the L1 network's method of processing multiple transactions at once.
Sidechains are used to process a large number of transactions simultaneously and are a hybrid of a state channel and a nested blockchain.
Examples:
Polygon is an Ethereum L1 network scaling solution based on sidechains.
Optimism is a Rollup-based scaling solution for the Ethereum L1 network.
L3
The application layer is a common name for the L3 layer. Decentralized applications and the protocols that make them possible are hosted at this layer.
Examples:
Uniswap is a decentralized exchange.
Orbs is a single backend for cross chain transfer protocols.
Naturally, this sort of classification isn't always convenient because some applications can be divided into multiple layers at once. For example, the L2 and L3 layers of the OmniLayer cross-chain transfer protocol are intended for trading various digital currencies and assets on top of Bitcoin.
How Does a Layer 0 Protocol Work?
0 blockchain is also called the physical layer. It is in charge of the underlying infrastructure and data transfer protocols, like the Internet, that allow individual nodes to communicate with one another. Layer 0 blockchains include:
Hardware is everything needed to run the blockchain, including computers, servers, network equipment, and other devices.
Software – operating systems, applications, and drivers used in blockchain networks.
The rules that govern how devices on the network exchange data are known as data transfer protocols. The Internet, hardware, and connections that make it possible for layer 0 protocols like Bitcoin to work smoothly are all at this layer.
Benefits of Layer-0 Blockchain
A number of state channels are in charge of validating data based on user-defined functions in the Layer-0 blockchain. Based on a large number of consensus algorithms and P2P systems in blockchain ecosystem, it helps solve the problems of blockchain-based technologies:
Scalability;
Neutrality;
Adaptability;
Blockchain interoperability;
Security.
This layer brings the following components together so that a blockchain can function properly without a central authority:
Transactions are confirmed and validated by nodes;
The servers intended to operate the application part as well as the nodes;
Clients that interact with protocols;
The network of miners in the case of proof-of-work (PoW) blockchains;
Internet, hardware, and connections that enable blockchain layer 1 to function properly.
Install relay networks on a large number of nodes;
Allow interaction between multiple networks;
Making cross-chain transactions faster and cheaper.
Notable Layer-0 Protocols and Networks
Polkadot
Ethereum co-founder Gavin Wood developed the Polkadot protocol, which allows developers to create their own blockchains. It uses a mainnet called the Polkadot Relay Chain. Each independent blockchain built on Polkadot is known as a parallel chain or parachain.
Avalanche
Ava Labs introduced the Avalanche blockchain in 2020. It uses an infrastructure with three main chains: the contract chain (C-chain), the exchange chain (X-chain), and the platform chain (P-chain), and it includes DeFi protocols. They are designed specifically to perform the core functions of the ecosystem in order to increase security while providing low latency and high throughput. The C-Chain is used to create smart contracts, the P-Chain is used to coordinate validators and subnets, and the X-Chain is used to create assets and trade them. Cross-chain swaps can also be done quickly and cheaply thanks to Avalanche's adaptable structure.
Cosmos
Ethan Buchman and Jae Kwon founded the Cosmos network in 2014.
It is made up of user-defined blockchains called zones and the main Cosmos Hub network, which is powered by Proof of Stake. The Cosmos Hub offers a shared security network and moves data and resources between linked value chains or zones.
Each zone is built to suit the needs of the developer and allows for the installation of its own cryptocurrency, customization of block validation, etc. All Cosmos applications and services hosted in these zones communicate via the Inter-Blockchain Communication (IBC) protocol.
LayerZero
The LayerZero network uses lightweight ZRO nodes, which are endpoints of exchange. Any ZRO node can communicate with a node on another blockchain that is similar to it. Apps connected to ZRO communicate with each other via a communication protocol supported by a set of smart contracts.
It allows nodes to exchange messages across networks, make requests to send funds, and confirm the validity of a transaction.
zkLink
zkLink is a cross-chain trading system that is secured using zk-SNARKS technology, ensuring the privacy and reliability of transactions. The primary objective of zkLink is to provide developers with tools that make developing trading applications easier by letting them access large sums of cryptocurrency funds and tailor the application to their specific requirements. One of the important features of zkLink is its support for token transfers between different blockchains.
Use Cases of Layer-0 Blockchain
Layer 0 is a platform with all the tools needed to start from scratch and deploy multiple blockchains. There is a "builder" for creating new blockchain ecosystems in a pipeline for each L0 solution, as well as its own distinct architecture, concept, and implementation. Layer 0 protocols can operate in a variety of ways. In terms of design, features, and focus, they may differ. Typically, layer 0 protocols support transaction data across various layer 1 chains and act as the foundational layer blockchain. While there are clusters of layer 1 blockchains built on layer 0 protocols, there are also cross-chain transfer protocols that allow tokens and data to be transferred between different blockchains.
Layer 0 use cases include, among others, interoperability. A great example is Cosmos, which is creating an ecosystem of interoperable blockchains with its Tendermint IBC.
Conclusion
Appearing as the foundation of blockchain technology, layer 0 is the common foundation for all blockchains. It provides the basic infrastructure for building interconnected value chains and also enables interoperability between them.
Today, many layer 0 blockchains, such as Cosmos, Polkadot, and Avalanche, offer blockchain developers several pre-built, ready-to-implement features, allowing them to build their blockchain protocols without starting from scratch.
FAQ
1. What is a Layer-0 Blockchain?
Layer 0 provides the basic infrastructure for building interconnected value chains and enables them to interoperate seamlessly.
2. How does Layer-0 Blockchain improve interoperability?
Layer-0 allows assets to be transferred between different blockchains, and also allows developers to create one application on several blockchains at once (or at least simplifies development on several blockchains due to standardization).
On cross-chain exchanges, their communication protocols (such as IBC) allow for quick and affordable transactions.
3. What are some examples of Layer-0 Blockchain protocols?
The most popular «zero blockchains» today are Polkadot, Cosmos, Avalanche, etc.
4. What are the main challenges facing Layer-0 Blockchain technology?
Different blockchain networks interaction can be complicated due to differences in security and finality models, as well as consensus mechanisms.
Cross-chain hacks compromise relays and bridges. A breach in one component impacts the entire network critical functions, as in Cosmos and Polkadot.
Changing the protocol and adding new features can disrupt the stability of the blockchain ecosystem, fragment the network, and impact layer 1 chains.
