Layer 0, The Foundation of the Blockchain Where Interoperability Reigns

Layer 0, The Foundation of the Blockchain Where Interoperability Reigns
Layer 0, The Foundation of the Blockchain Where Interoperability Reigns

To ensure the proper functioning of blockchains like Bitcoin or Ethereum, they must be based on a complete and efficient base: layer 0. They range from a simple network of miners to an inter-blockchain communication system. Let’s discover the radius of action of layer 0 and their recent evolutions.

What is a Layer 0?

The foundation of blockchain technology, layer 0, is a set of components that allow a decentralised network to function properly. At the beginning of the blockchain, the first decentralised networks like Bitcoin or Ethereum presented themselves as simple blockchains. As a result, although existing, the idea of layer 0 was very rarely mentioned, either for lack of interest or lack of solutions.

The proliferation of blockchains, the exponential adoption of decentralised finance (DeFi) applications and the meteoric explosion of non-fungible tokens (NFT) will give rise to scalability and interoperability problems from 2020. As a result, the idea of a blockchain in layers is resurfacing. With this renaissance appear advanced solutions that begin to populate the different levels of blockchains, including level 0.

Blockchain, a Multi-layered Technology

The Concept of layer 1 and layer 2

When talking about blockchains, we often hear “Layer 1” or “Layer 2 ”—simply defined layer 1 as neither more nor less than blockchains, which do not depend on any other to function. Instead, layer 1 blockchains function as foundations on which transactions can be made and applications deployed. Ethereum and Bitcoin are the two best-known examples of layer 1.

On the other side, layer 2s, like Polygon or Optimism, are networks entirely dependent on their parent blockchain. They make it possible to unload it and thus improve its usability. Furthermore, these protocols can be very specific in their architecture. This allows them to solve a wide range of scalability, anonymity, or even modularity problems.

A Pyramid Architecture

Blockchain technology is actually in the form of a pyramid, as the relationship between layer 1 and 2 suggests. Layer 2s sit on and depend on the parent blockchain, the converse not being true. We can compare the architecture of a blockchain to that of a food chain.

In this pyramid, several floors, or layers in the case of blockchains, depend entirely on the floor below. Conversely, those above are not necessary for the proper functioning of the lower levels. Finally, like the food chain, there is a base, without which the whole pyramid collapses. In blockchains, this floor is called layer 0.

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Figure 1: The different layers of blockchain technology

Layer 0, the foundations of the blockchain

A Common Base for all Blockchains

From a purely formal point of view, layer 0 is a common base for all blockchains. It is a network of components to maintain the functionality of a blockchain and keep its decentralisation. It includes all the servers, nodes, users and even the Internet.

For proof-of-work (PoW) blockchains, the miner network is also included at the pyramid’s base. With this formal definition, each blockchain has its own layer 0, above which we find layer 1, where all the applications and transactions of the network are housed.

Advanced Layer 0 Protocols

However, when we speak of layer 0, we often refer to the protocols specialised in constructing such layers. Indeed, although scalability can be solved by creating higher levels, layer 2 or 3, interoperability is a problem that is very complex to solve at these levels.

Although bridges exist between some blockchains, these are complex and limited in their operations. For this reason, developers have looked into the design of advanced layer 0, usable by several blockchains. These layer 0 often include a communication system between all the protocols using the same base.

Beyond interoperability, these layer 0 protocols can also enable the simplified creation of a blockchain thanks to development kits (SDKs). The BNB Chain is a perfect example of this; it was built using the Cosmos SDK, developed by the team behind the Cosmos blockchain.

To better understand how these advanced layer 0 protocols work, we can compare its ecosystem to a village. This one is cut off from the world without the Internet. Therefore, we can imagine a certain number of houses whose foundations would be layer 1 blockchains. On these foundations are built houses, in which there are open rooms with multiple uses where the transactions of layer 1 are stored, such as the living room. The house also hosts rooms partitioned by walls, for a specific use, or layer 2, separated by doors, the bridges, which are only used to perform certain tasks, such as a kitchen.

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Figure 2: The layered blockchain visualised through a village

To communicate between houses, there are several options. The first is to get out of the house and go to another from the outside. This requires no preparation, but it is slow and inconvenient. The second uses the ground as a means of communication. It can be straightforward and does not depend on what is happening on the surface. The only problem is that it must be arranged beforehand. This is exactly the void that advanced layer 0 solutions attempt to fill.

These solutions are presented as a tool kit, allowing any blockchain that wishes to benefit from certain advantages, such as interoperability or sharing certain functionalities such as the consensus method or information storage.

Some Examples of Layer 0 protocols

The advantages offered by advanced layer 0 are diverse, and the solutions are numerous as a result. Even if the best known like Cosmos, Polkadot or Avalanche draw attention, some like Arweave are unique and meet a specific need.

Cosmos, the Most Valued Layer 0 Solution

The Cosmos development team is behind the most valuable layer 0 on the market, with nearly $150 billion in value created. This advocates modularity and interoperability above all. A triptych of solutions born from the collaboration between its two biggest contributors, Ignite and the Interchain Foundation:

  • “ Tendermint Core  ”: open source blockchain development platform consisting of a consensus algorithm and a peer-to-peer communication solution;
  • ”  Inter Blockchain Communication  ” (IBC): data exchange solution, financial or not, between several compatible blockchains. It comes in the form of direct communication channels between each network that so wishes;
  • ” Cosmos SDK  “: development kit allowing the simple creation of a blockchain using the Tedermint Core and compatible with IBC.

Cosmos presents itself as the “ Internet of Blockchains ” using these three components. Its massive adoption, in particular, due to its policy of modularity, allows each blockchain to be in control of its security.

Here are some of the most prominent blockchains based on Cosmos solutions:

  • BNB Chain;
  • Terra;
  • Chronos;
  • THORChain;
  • Osmosis.
  • The Cosmos IBC
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Figure 3: Cosmos IBC technology

Polkadot, a Layer 0 Focused on Security

Unlike Cosmos, Polkadot focuses on security, not modularity. However, even though their visions are diametrically opposed, there are similarities, especially in the structure of their solution.

Like Cosmos, there is a development kit, “ Substrate ”, and a communication solution, “Cross-chain Message Passing” (XCMP). However, each blockchain (or parachain ) in the network depends on the security of a parent blockchain, called the “ Relay chain”.

Polkadot’s layer 0 is much more restrictive. Still, it allows smaller blockchains to benefit from a foundation that includes an easy-to-use development kit and an intercommunication system and a security guarantee provided by the 10th most valued cryptocurrency on the market, DOT.

As of this writing, only a few parachains have been deployed on Polkadot, including:

  • Astar;
  • Moonbeam;
  • Clover Finance;
  • Acala;
  • Centrifugal
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Figure 4: Polkadot’s centralised layer 0

Avalanche, a Unique Cascading Architecture

The layer 0 solution offered by Avalanche is unique in its conception of security and expansion. Unlike Cosmos and Polkadot, its architecture is built as a waterfall with a layer 1 blockchain, called the primary network, overseeing everything. In addition, three blockchains with different uses emanate from it. One of them, the “platform chain”, allows the creation of new specialised blockchains called “subnets”. All these different blockchains are built using layer 0 of Avalanche.

This layer 0 is much more permissive than those of Cosmos or Polkadot. Although certain parameters must be respected in order to guarantee compatibility between blockchains, developers still have the choice when it comes to customisation. For example, custom chains must use the “Snowman” consensus method, but they can choose between their own set of validators or the main chain. On this specific point of security, developers, therefore, choose between the Cosmos method and that of Polkadot.

In terms of the roles of the native token, layer 0 of Avalanche is similar to that of Polkadot. Indeed, AVAX is used in all blockchains and subnets for governance and payment of fees.

Figure 5: The waterfall architecture of Avalanche

Arweave, Solana’s storage system

Arweave is a very particular and different solution from the first three. Originally, this proof-of-work blockchain was not created to become a layer 0 protocol. Like Filecoin, Arweave is a blockchain allowing the decentralised storage of information. However, this solution stands out from its counterpart through the nature of the storage. Indeed, everything stored on Arweave is for life and can only be deleted if the majority of minors on the network agree.

This made Arweave the perfect candidate to save all the history of a heavy blockchain. Solana, with its approximately 4 petabytes (4,000,000 GB) of data generated per year when the blockchain is running at full speed, is a perfect candidate. It’s hard to imagine that long-term decentralisation can be guaranteed through validators alone.

As a result, the SOLAR bridge, a bridge allowing Solana transactions to be stored permanently on Arweave, began its development in 2020. With this technology, transactions can be stored on a decentralised network a few minutes after their validation. This solution allows Arweave to be an integral part of layer 0 of Solana.

Conclusions on Layer 0

The proper foundation of blockchain technology, layer 0, has only recently received interest. However, the race for scalability and interoperability saw the architecture of layered blockchains reborn during the 2020s and 2021s. Mother, interoperability requires a closer relationship between existing networks.

Protocols like Cosmos, Polkadot or Avalanche have created toolkits that allow developers to create a set of connected blockchains. This kit enables all networks to share a common base, or layer 0.

Beyond interoperability, other solutions have integrated layer 0 of certain blockchains. Arweave and its decentralised permanent storage solution have thus established themselves as a fundamental foundation of the Solana blockchain, allowing it to retain its scalability and decentralisation. Until now, this was threatened by the disproportionate amount of data to be stored each year.