The segregation within crypto caused by blockchain tribalism has made it difficult to interact with multiple blockchains at the same time. Find out how Layer 0s aim to solve this problem.
In the rapidly evolving world of blockchain technology, interoperability has become a key issue as different blockchain networks struggle to communicate with each other.
This has led to a great deal of so-called blockchain tribalism. This has seen users segregate into different fractions behind different layer 1 blockchains, as well as the formation of independent ecosystems operating on each chain — with a huge amount of redundancy and copycatting.
This, unfortunately, has also made it more difficult for end users to interact with the most useful decentralized applications and protocols — since they would need to manage independent wallets for each chain they wish to interact with.
Enter Layer 0 blockchains such as Polkadot and Cosmos. These offer a solution to this problem by enabling cross-chain communication and interoperability, helping to produce a more cohesive blockchain ecosystem.
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What Is a Layer 0 Blockchain?
Layer 0s are blockchains that aim to facilitate the seamless exchange of data and or value between otherwise independent blockchains — potentially including layer-1 and layer-2 platforms.
Right now, most blockchains are siloed off from one another. Each maintains its own ledger, its own set of smart contracts, and in many cases, its own user base — due to blockchain tribalism.
This leads to a major duplication of efforts, with many DApp developers opting to deploy their smart contracts on multiple different blockchains — potentially dividing their community and introducing UI hurdles. It also leads to the rapid growth of clones and copycats, which take the formulas and products that already succeeded on one chain, before deploying them on a separate chain.
This has led to somewhat predatory strategies, with layer 1s competing for popular decentralized applications (DApps) and putting up sizeable ecosystem funds to help draw in talent while striking up exclusivity deals with prominent DApps. It can also lead to vampire attacks, where a copycat platform attempts to one-up its predecessor and drain its liquidity, users, or other key resources.
Layer zeros change the paradigm by helping developers favor cooperation over the competition by ensuring that the applications and products they develop on one chain can communicate with and interoperate with assets and users that exist on other chains.
The way they accomplish this can vary considerably between platforms, ranging from full-blown interoperability protocols like Polkadot's Substrate framework to more modular solutions like Cosmos' Inter-Blockchain Communication (IBC) protocol.
By creating a network of connected blockchains, layer zeros aim to break down the walls between different blockchain networks and promote a more collaborative and interoperable ecosystem. This could potentially unlock new opportunities for innovation and development, as well as greater efficiency and scalability in the blockchain industry. It can also help to power novel use cases that take advantage of the unique properties of multiple different blockchains.
As the blockchain space continues to evolve and mature, layer zeros will likely play a crucial role in enabling the seamless exchange of data and value between different blockchain networks.
How Do Layer 0s Work?
The layer 0 landscape is now incredibly diverse, with well over a dozen platforms now vying to become the thread that closes the gaps between blockchains.
These all aim to connect different blockchains together to form a more cohesive and interoperable ecosystem where cross-chain communication is simple and efficient. But the way they attempt to accomplish this varies from platform to platform.
That said, there are some common underlying techniques, principles, protocols and technologies that most of these platforms use.
Some of these include:
Atomic swaps: Layer 0 blockchains use atomic swaps to move assets from one chain to another without the need for a trusted intermediary. Atomic swaps enable use cases like cross-chain liquidity pools and inter-chain asset trading.
Cross-chain data oracles: These allow blockchains to securely access and leverage reliable off-chain data and allow independent layer 1s and layer 2s to access information from a variety of different chains. Moreover, platforms like Chainlink offer interoperability protocols like the Cross-Chain Interoperability Protocol (CCIP) to help blockchains receive and exchange data from oracle nodes in a standardized way.
Arbitrary message passing: Practically all layer 0s feature a way to pass arbitrary messages between chains, allowing for seamless data exchange between any and all chains in the L0 ecosystem. Some examples of arbitrary message-passing technologies and protocols include Polkadot’s Cross-Consensus Message Format (XCM), Wanchain's Cross-Chain Communication Protocol (WCCC), and the Cosmos SDK's Inber-Blockchain Communication Protocol (IBC).
Shared consensus: By offering a single underlying consensus mechanism for all associated chains, layer zeros can massively improve efficiency and maximize the utilization of available resources. This can also lead to improved security by supporting a larger and more diverse validator network, which some independent chains would only be able to achieve with help.
Bridges: The vast majority of interoperability platforms leverage bridges, which use a combination of smart contracts and APIs to facilitate communication between two or more chains and can be implemented in a variety of ways, including through centralized or decentralized mechanisms. Assets or data moved between chains can then be used with an expanded range of platforms and protocols.
Shared security: Many layer 0 blockchains offer a shared security resource to connected chains, allowing them to bootstrap their node or miner network, and remain secure even if they are relatively small or inactive. Polkadot's relay chain is a prominent example. By leasing a parachain slot, parachains can benefit from the central security offered by validators operating on the relay chain.
What Are the Most Prominent Layer 0s?
The layer 0 landscape is currently one of the most actively developed sectors in crypto right now, with developers doing what they can to maximize interoperability between sovereign chains and unlock new opportunities for users and builders.
Today, there are well over a dozen platforms with layer 0-like properties. Some have already gone on to achieve significant success, while others are still relatively unknown. Many L1 blockchains are now connected together through multiple L0s, meaning there is competition between platforms.
These currently compete across various metrics, including interoperability features, security, community and ecosystem, and adoption. And while several platforms are currently in the lead, there is no clear consensus about which L0(s) will dominate the industry in the years ahead.
Two of the most popular platforms currently include:
Polkadot
By far the most well-known and arguably the most comprehensive layer 0 platform, Polkadot was funded in 2017 in one of the largest ICOs of all time.
The platform consists of a central relay chain to which a wide array of parachains is connected — each of which is an independent application-specific blockchain. Polkadot allows data and tokens to be transferred between these parachains with no restrictions allowing for applications and assets on different blockchains to interact in previously impossible ways.
Existing non-substrate-based blockchains like Ethereum and Bitcoin can be integrated via bridges, allowing assets from these chains to be securely ported to Polkadot and back.
Polkadot is built using Parity Technologies’ Substrate framework and uses a highly energy-efficient Nominated Proof of Stake (NPoS) validator selection system to ward off attacks and maintain decentralization. Other benefits include a powerful cross-chain messaging standard known as XCM, a near-instant finality solution (GRANDPA), and on-chain governance for DOT holders.
Since the Relay Chain has limited resources, there are a limited number of parachain slots at first. To help ensure that, only the most promising, most useful projects take up these slots. Polkadot uses a slot auction system that sees users and projects bid for a parachain lease.
Polkadot first launched in May 2020, and there are now dozens of projects building on the platform — several of which have already deployed as a parachain. This includes Moonbeam, Acala, Astar, Clover, and Parallel.
Learn more about Polkadot.
Cosmos
The second best-known layer 0 platforms, Cosmos is designed to power an interconnected network of potentially thousands of blockchains that form the Cosmos Network.
One of the key pillars of Cosmos is the Interblockchain Communication Protocol (ICP), which is used to exchange data and assets across blockchains in the Cosmos ecosystem. In order for sovereign blockchains to be compatible with IBC, they must be capable of some minimum functions — but there are no limits to their network topography or consensus mechanism.
Developers can use the Cosmos SDK to build their own chains and applications in the Cosmos ecosystem.
At the heart of this "Internet of Blockchains" is the Cosmos Hub. It was the flagship blockchain in the Cosmos Network and is designed to connect and interoperate with the other blockchains in the network.
Like many layer 0 platforms, Cosmos uses a system of bridges and relayer nodes to migrate assets and data between chains, allowing it to be used throughout the Cosmos Network.
The Cosmos ecosystem also includes applications that help to further smooth the gaps between different appchains. This includes Onomy, which includes the connective tissue like Access Wallet — which allow users to participate in staking and governance for all their assets from one interface, or connect with Cosmos ecosystem apps like Sommelier, Juno, Osmosis and Secret Network in one place.
It also includes the Onomy Exchange which can be connected to any other chain through the Arc Bridge Hub and through the Cosmos IBC, with instances of the Hybrid Dex running multi-chain. It means a single DEX has the in-built L0 infrastructure to collate liquidity multi-chain and execute cross-chain swaps directly through the Onomy Exchange and Onomy Access wallet.
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