What is Zetachain (ZETA)? Latest updates on Zeta token cryptocurrency in 2024

Zetachain conducts an airdrop campaign for early users while also listing the token on reputable exchanges such as Coinbase, Kucoin, OKX… Could this be a promising project?

1. What is Zetachain?

Zetachain is a blockchain layer 1 compatible with Ethereum, built on the Proof of Stake mechanism. It focuses on enhancing connectivity with other blockchains based on omnichain standards. In theory, the omnichain standard allows information, data, or tokens to be exchanged across chains while maintaining their native integrity.

ZetaChain is a Layer-1 blockchain built on Tendermint Consensus and Cosmos SDK, enabling it to interact with other Layer-1 and Layer-2 solutions. ZetaChain utilizes the Proof of Stake (POS) consensus mechanism to verify transactions with trust-minimized characteristics, meaning it minimizes the need for trust from third parties.

The core issue ZetaChain addresses is related to Crosschain and Multichain interoperability, allowing dapps to interact, communicate, and exchange data seamlessly. ZetaChain can be seen as an intermediary facilitating the connection of various blockchains, including non-EVM blockchains like Bitcoin or Dogecoin.

To illustrate, let’s consider the structure shown in the image. When a user wants to swap E from the Polygon network and receive USDC on the Ethereum network, the sequence of transfers would be as follows:

1. Swap ETH for ZETA on the Polygon network.

2. Transfer ZETA to ZetaChain.

3. Route ZETA from ZetaChain to the Ethereum network.

4. Swap ZETA for USDC on the Ethereum network.

5. Users receive USDC on the Ethereum network.

With the ability to connect to all EVM and non-EVM networks, dApps deployed on ZetaChain’s omnichain smart contracts will inherently be able to interact with all chains connected to ZetaChain. Users can utilize most types of wallets such as Metamask, Keplr, XDEFI, etc., to interact with these chains.

2. Products

2.1. Structure of Zetachain

To connect various blockchains, Zetachain is developed based on the following core structure:

• ZetaClient: Responsible for observing events on external chains (Observer) and signing outgoing transactions (TSS Signer).
• ZetaCore: Responsible for producing blockchains and maintaining the replicated state.

ZetaCore and ZetaClient will be co-located within a block and operated by Node Operators. Anyone can become a Node Operator to participate in verification with the condition of holding a sufficient amount of staked tokens.

Moreover, Zetachain utilizes $ZETA as its Token Gas for paying fees in the network. Operating on a PoS consensus mechanism, Validators are required to stake $ZETA to enhance security.
The $ZETA token is a cross-chain token issued originally across multiple chains and different layers, allowing users to directly move $ZETA tokens from Chain A to Chain B through a one-way pegging mechanism (i.e., burning a quantity X on Chain A and then minting a quantity X on Chain B).

Furthermore, when developing Dapps on Zetachain, the standard Token used is ZRC-20, which is integrated into ZetaChain’s Omnichain smart contracts. The standout feature of ZRC-20 is its ability to enable developers to issue tokens across any connected chain.

This allows for the development of Dapps such as DEXs, Lending platforms, Portfolio Management tools, and any other token-related applications to easily interconnect, giving the sense that all Dapps are operating on a single chain.

The entire architecture provides two main features for Zetachain:

• Cross-chain message passing: This function exclusively utilizes zEVM as the tool for transmitting messages and $ZETA tokens across chains, handling routine messaging and network fee payments.
• Omnichain smart contracts: These are smart contracts on Zetachain, abbreviated as zEVM (Zeta EVM).

When considering the cross-chain message feature, other projects with similar goals to Zetachain include LayerZero, Axelar, IBC, and Chainlink CCIP. The significant point of differentiation lies in Zetachain’s utilization of $ZETA support within the cross-chain messaging protocol, which these aforementioned projects do not incorporate.

However, in terms of this functionality, Zetachain’s two main competitors are the CCTP technology by Circle and UniswapX, which currently hold a substantial portion of the market share. While Zetachain’s competitive edge may still garner attention, achieving a dominant market share in this segment might prove challenging.

In the current market landscape, Axelar is also a project developing solutions with a similar structure. However, Axelar employs CosmWasm, which necessitates developers to learn a new language for Dapp development, potentially not achieving the same level of optimization as Zetachain’s pre-integrated EVM.

Apart from Axelar, LayerZero is considered the primary competitor to Zetachain. LayerZero’s design simplifies into a 2/2 multi-signature model, with the primary trust assumption being Google Cloud, and LayerZero does not require consensus between different entities.

The benefits of relying on off-chain components (oracles and relayers) include a lighter, more cost-effective, and easily scalable system architecture.

• However, the drawback is dependence on two centralized entities, susceptible to manipulation. Applications seem content with maintaining default options and trusting LayerZero, even when they have the ability to switch autonomously.

In general, for LayerZero to achieve security, it will need to rely on the non-consensus of the two parties. Therefore, in terms of security, Zetachain still achieves better optimization compared to LayerZero.

Overall, the major benefits of Zetachain include:

• Connectivity to most L1 and L2 blockchains as well as Non-EVM blockchains such as BTC, SOL, Doge, etc.
• System security ensured by the PoS network.
• Support for Smart Contracts for Omnichain Dapps.
• Easy integration/conversion into Omnichain Dapps when using Zetachain.
• Independence from the liquidity of the ZETA token for transferring value.
• Utilization of the token as Gas.

2.2. Vai trò của Zetachain

With the mentioned benefits, the group of applications that would gain the most advantages from using Zetachain are primarily DeFi applications such as Dex, Lending, Yield, etc.

When a Dex is integrated into Zetachain, users can register their funds into a central contract and have positions across different chains’ versions of the Dex.

For example, in the case of the GMX application integrated into Zetachain, each blockchain would have different asset pools. For instance, on ARB there would be ARB, UNI, LINK; on Avalanche there would be AVAX, JOE, QI; on Polygon there would be MATIC, BAL, BAND, etc.

At this point, there are two main benefits such as:

• The ability to split orders for an asset across multiple liquidity sources.
• Access to more trading pairs without needing to manually connect to all related chains.

Smart contracts on Zetachain can directly send the required collateral amount to the relevant chain along with notifications on how to use these assets, significantly improving user interaction:

• Interact with a single chain.
• Manage their position across all chains instead of managing each chain separately.

If users only want to use Arbitrum, they can execute swap transactions like ETH-USDT and AAVE-ETH by leveraging liquidity on Ethereum without leaving Arbitrum directly. Assets will move from Arbitrum to Ethereum and back through Zetachain with better fee payment compared to using bridges from L1 to L2.

Similarly, this operational model will also achieve optimization for other Dapps such as Lending and Yield when there is a need to switch between different chains, making it easier for users to manage their assets and collateral positions across all chains and maximize capital efficiency.

Moreover, the ability to connect with Bitcoin will open up many deployment possibilities and provide better liquidity for Ordinal-related applications on the BTC network. The biggest weakness of Ordinal currently lies in the liquidity of this segment compared to Ethereum and Solana.

In essence, Zetachain allow users to connect ETH and stablecoins as well as BTC and Ordinals. There will be an opportunity to create a market with higher liquidity for Ordinals, not limited to BTC.

2.3. Ecosystem

At the current mainnet stage, the Zetachain ecosystem hasn’t seen many significant breakthroughs due to the limited integration of Dapps on this platform. The most notable highlight recently is Zetachain successfully running on Bitcoin and Curve integrating ZetaChain to support Bitcoin swaps. This can be considered the first major event in realizing the use of Zetachain for cross-chain asset transfers.”

Additionally, there are other Dapps such as Bounce Finance, Sushi, Symbiosis, etc. However, to achieve significant growth in its DeFi strengths, Zetachain will need to successfully deploy connections to other blockchains like Ethereum, BNB Chain, Solana, Polygon, etc., and major Dapps like Uniswap, MakerDAO, AAVE, etc., integrated onto Zetachain.

3. Team

Zetachain was founded in 2021 with over 150 contributors from around the world, including:

• Brandon Truong: Currently serving as the Head of Product at ZetaChain, Brandon has over 6 years of experience as the Chief Product Officer at Yada and BuzzFeed.
• Jonathan Covey: Serving as the Head of Community at ZetaChain, Jonathan brings over 6 years of experience as a Marketer at WorkMarket and notably at ConsenSys.
• Martin Grabina: Martin is currently a software engineer at ZetaChain with over 4 years of experience in product development, particularly in blockchain technology.

The other team members are all former personnel of renowned protocols such as 0x, Cosmos, Ignite, ConsenSys, and several other projects.

4. Backer

• March 2022: The Seed round received investment from Jaynti Kanani, the Founder of Polygon Network.
• August 16, 2023: The Funding round successfully raised $27 million from funds such as CMT Digital, Blockchain.com Ventures, Jane Street Capital, Foundation Capital, Vy Capital, Sky9, GSR Markets (GSR), Krust, CryptoKudasaiJP, Lingfeng Capital, etc.
• January 30, 2024: Raised $60,000 through an IEO on Gate.

5. Roadmap

• The roadmap has not been disclosed yet.

6. Tokenomics

6.1. General information

• Ticker: ZETA
• Total supply: 2,100,000,000 ZETA
• Current price: $1.68
• Fully Diluted Valuation (FDV): $3.52 billion
• Market capitalization: $397 million

6.2. Token utility

• of EIP1559, a portion of ZETA will be burned over time.
• ZETA is utilized in liquidity pools to facilitate the conversion of tokens according to the ZRC-20 standard when interacting with other blockchains.
• Staking.
• Network governance role.

Above is not all the information about this trend, Wanna know more about how it works and why should you use it? Read at Theblock101.com!

Disclaimer: This article is for informational purposes only, not financial advice. Join the Bigcoinchat chat group to update the latest information about the market.