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Key Takeaways
- Layer-0 protocols form the foundation that Layer-1 blockchains are constructed on. Serving as infrastructure for blockchain networks and applications, Layer-0 protocols represent one solution striving to tackle issues confronting the industry, including scalability and enabling interoperability between blockchains.
- Layer-0 protocols enable developers to launch customised Layer-1 blockchains designed for specific applications or use cases. With the support of Layer-0s, developers can focus on applications instead of consensus and security.
- Layer-0 protocols aim to allow the Layer-1 blockchains built on them to communicate and interoperate, which provides users with a seamless experience across multiple networks. Without interoperability solutions provided by Layer-0 networks, individual blockchains would largely operate in isolation. This limits their utility and hinders the networking effects that arise when systems can communicate and interact with each other.
- A number of notable Layer-0 protocols adopt the relay-sidechain based infrastructure. This mainly constitutes three components: A mainchain supports the data transfer between Layer-1s; the sidechains are application-specific Layer-1s connected to the mainchain; and the interchain communication protocol acts as a standard for data exchange among the Layer-1s.
- Currently, Cosmos, Polkadot, and Avalanche are prominent examples of Layer-0 networks that use the relay-sidechain structure, while there are newcomers like LayerZero and zkLink that represent the next progression of multichain interoperability. Read our exclusive report Layer-0: Deep Dive Into Interoperability Solutions to explore Layer-0 and blockchain interoperability in greater detail. Become a Crypto.com Private member and get access to the report today.
- In the coming years, Layer-0 protocols have the potential to usher in a new wave of blockchain innovation by enabling the growth of multiple specialised Layer-1 blockchains that interoperate seamlessly. Several technical and adoption challenges still remain, but Layer-0 could lay the foundation for a more open, productive, and composable blockchain ecosystem.
Read the full report: Layer-0: Infrastructure For Customised Blockchains
Authors
Crypto.com Research and Insights team
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