Blockchain protocols are rules that dictate the workings of the blockchain. It defines how data is transferred, how transactions are verified, how smart contracts are deployed, or the development of dApps. A blockchain is built by the collection of compatible protocols.
The Layer 0 protocol is the foundational protocol on which Layer 1 blockchains are deployed. For instance, Polkadot (called the blockchain of blockchains) is a layer 0 blockchain upon which other blockchains (called parachains) are deployed. The layer 0 protocol does not allow the development of smart contracts or applications, instead, it provides the framework for the improved working of layer 1 blockchains.
What Problem Does the Layer 0 Protocol Solve
1). Flexibility for developers:
Decentralized applications are restrained by the protocol of the blockchain on which they are deployed. Developers cannot explore a different consensus protocol or reward system. If the gas fee of an underlying blockchain is too high, all dApps built on it become expensive. Layer 0 blockchain gives flexibility to developers by allowing them to build custom blockchains that meet their specific needs.
2). Network speed:
When building layer 1 blockchains, developers often have to compromise between scalability, decentralization, or security. If a blockchain makes the process of confirming transactions complex, the network will be secure as it requires greater computational energy to hack, but its scalability will be compromised. A complex transaction execution leads to network congestion which reduces the transaction speed. If the developer reduces the computational effort required to validate transactions, scalability will be achieved at the expense of the security of the network.
The layer 0 blockchain solves this problem by delegating these functions to different blockchains and allowing flexible interactions between them.
3). Flexibility in the exchange of data and assets between blockchains:
Every blockchain is independent; each has its own security protocol, consensus mechanism, native currency, and scaling solution. To expand their use cases, the interaction between blockchains is needed. But this is difficult to achieve as the protocols holding these networks are different.
The layer 0 blockchain solves this through the use of cross-chain transfer protocols. This allows the seamless transfer of data and assets between layer 1 blockchains.
Example of layer 0 blockchains
Polkadot is a layer 0 protocol. All layer 1 blockchains deployed on Polkadot are called Parachains (as they run parallel to each other). Each parachain can customize its token and governance method but will rely on the relay chain for consensus and security (which is provided by the relay chain validators).
Developers can acquire parachain slots through auction. The winning bid is placed in a reserved balance (cannot be staked or transferred) until the end of the lease.
Cosmos is a layer 0 blockchain launched in 2019. Blockchains interact with each other through the zone and hub method. The layer 1 blockchains on Cosmos are called zones and are connected by hubs. If you want to transfer assets between 2 blockchains (for instance, the Ethereum and Solana blockchains), each of them would connect to their zone on the Cosmos network. Both zones then connect to a common hub. Transfer happens through the hub.
In the Cosmos network, each blockchain is responsible for its governance model and validators. Security is not a shared state.
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