Key Takeaways:
- Layer-0 protocols form the foundation that Layer-1 blockchains are constructed on.
- Layer-0 protocols enable developers to launch customised Layer-1 blockchains designed for specific applications or use cases.
- A mainchain supports the data transfer between Layer-1s, while sidechains are application-specific Layer-1s connected to the mainchain.
- Cosmos, Polkadot, and Avalanche are prominent examples of Layer-0 networks that currently use the relay/sidechain structure, while newcomers like LayerZero and zkLink represent the next progression of multichain interoperability.
- 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.
What Are Layer-0 Protocols on a Blockchain?
Layer-0 protocols form the foundation that Layer-1 blockchains are constructed on. Serving as infrastructure for blockchain networks and applications, they 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.
With the aim to allow Layer-1 blockchains to communicate and interoperate, Layer-0 protocols provide 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 cannot communicate and interact with each other.
How Does Layer-0 Work?
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.
- Sidechains are application-specific Layer-1s connected to the mainchain.
- The interchain communication protocol acts as a standard for data exchange amongst the Layer-1s.
Examples of Relay/Sidechain Network
Currently, Cosmos, Polkadot, and Avalanche are prominent examples of Layer-0 networks that use the relay/sidechain structure. Newcomers like LayerZero and zkLink 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.
What Does the Future Look Like for Layer-0 Protocols?
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 seamlessly interoperate. Several technical and adoption challenges still remain, but Layer-0 could lay the foundation for a more open, productive, and composable blockchain ecosystem.
Further Reading
Read the full report by the Crypto.com Research & Insights Team: Layer-0: Infrastructure for Customised Blockchains.
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