What is ZetaChain? ZETA Tokenomics explained

ZetaChain, the blockchain that bridges the gap between different blockchains such as Bitcoin, Ethereum, Cosmos and even Dogecoin.

ZetaChain, also known by the market ticker ZETA, is a Layer-1 blockchain that aims to become the entry point into all of crypto.

Through ZetaChain’s Omnichain Smart Contracts, developers can create decentralised apps that can span multiple chains, from Ethereum to Bitcoin, and beyond.

In short, they want to create easy access to all of crypto from one chain by providing the smart contracts infrastructure to achieve it.

But, how does ZetaChain work exactly? And what are the tokenomics of the ZETA token?

What is ZetaChain?

ZetaChain was founded by Ankur in 2021, with Ankur having plenty of relative previous experience for such a project after having been an early employee at Coinbase and was one of the creators of the Basic Attention Token, or BAT, token.

At its core, ZetaChain offers the only public, decentralised blockchain and smart contract platform which allows message passing and value transfer between any blockchain.

On top of this, through their Omnichain Smart Contracts, developers can even give the power of programmability to non-smart contract chains like Bitcoin and Dogecoin.

Unlike most crypto bridges, which are crypto protocols that facilitate the interoperability and communication between different blockchain networks, ZetaChain’s transactions happen on-chain, and even the cross-chain transactions are fully transparent and verifiable.

This aims to combat some of the potential pitfalls of crypto bridges, which are often easier to target with exploits than the parent chains.

But this leads us to the question, how does this all work?

How Does ZetaChain Work?

ZetaChain was built utilising the Cosmos SDK and Tendermint Consensus. The Cosmos Software Development Kit, or SDK, is a framework for building blockchain applications. The SDK enables the creation of independent, interoperable blockchains that can communicate with each other through a shared hub, which is Cosmos.

Relatively for us here, is that all projects built using the Cosmos SDK will be a Proof-of-Stake based platform that utilises the Tendermint consensus mechanism for security.

To be concise, ZETA is best described as a cross-chain intermediary asset.

How this works is when a cross-chain message is sent, the sender attaches ZETA in their message to represent value and to pay for all transaction fees in a single bundle, which ultimately saves the end user money and time.

The ZetaChain network also includes nodes that monitor transactions on every connected blockchain.

Meaning, that through ZetaChain’s TSS architecture, the network can sign and verify transactions on every connected blockchain the same way as a crypto wallet can.

To clarify, a TSS, or Threshold Signature Scheme,  is a type of digital signature protocol used by Mutli-Party Computation, or MPC, wallets to authorise blockchain transactions.

By enabling the ability to read and write to connected blockchains in a secure, decentralised manner, these ‘Hyper-Connected Nodes’ provide a seamless ‘Omnichain’ environment for developers to build new and powerful cross-chain applications.

ZetaChain hopes this kind of architecture will help developers future-proof their products by not limiting them to one chain, and instead allow applications to last long into the future.

But what makes ZetaChain really unique?

What Makes ZetaChain Unique?

Naturally, ZetaChain’s ability to read from or write to any connected chain through its node architecture is its main selling point, which includes its ‘Omnichain Smart Contracts’ – which, as the name implies, are smart contracts that can run across any blockchain network.

Consequently, one of ZetaChain’s biggest features is the ability to manage external assets.

What I mean by this is that ZetaChain’s network, and any applications built on top of ZetaChain, can manage assets and vaults of externally connected blockchains.

In short, this allows assets on any chain to be managed just as a smart contract on a single blockchain can manage assets on its own blockchain, which ultimately provides an easier user experience overall.

But, what really helps separate it from its crypto-bridge competitors is the fact these properties apply to all chains, including non-smart-contract chains, such as Bitcoin or Dogecoin.

But what about the Tokenomics?

ZETA Tokenomics

The ZetaChain is an EVM-compatible blockchain but runs its own native ZRC-20 tokens, instead of Ethereum’s ERC20 token standard.

These tokens, as you might have guessed, run similarly to Ethereum’s ERC-20 tokens but with the additional ability to speak to non-EVM based applications as well.

To quickly recap, an ERC-20 token is a type of token standardisation blueprint which can be found on the Ethereum network and ensures compatibility with the Ethereum network.

ZRC-20 tokens are much the same thing but for the Zeta network.

As with most Proof-of-Stake based cryptocurrencies ZETA can be used for the classics of payments, staking, and governance.

Additionally, the transaction fees, also known as gas fees, which are required to be paid in ZETA are then distributed to validators, delegators, and other network participants.

The total initial supply of ZETA is 2,100,000,000.

After approximately 4 years, based on a set curve the protocol will plan to initiate a target of 2.5% yearly inflation based on the current circulating supply, ultimately providing a mechanism to sustain the network into the future.

At launch, the initial token distribution was as follows:

24% went to the Protocol Treasury, 22.5% to Core Contributors, 16% towards Purchasers and Advisors, 12% to the Ecosystem Growth Fund, 10% towards User Growth Pool, 10% to Validator Incentives, and a final 5.5% towards Liquidity Incentives.

All of which are vested over a 2-to-4 year period.

ZetaChain looks to remove limitations for smart contracts and provides new technology for older blockchains to also participate in sending and receiving smart contract data as well.

ZetaChain aims to take interoperability to the extreme and has designed a platform to facilitate near-limitless interoperability between blockchains.

Consequently, assuming there are no major mishaps in management, it currently seems likely that this is only the beginning for ZetaChain.

If it can continue to deliver on its core use case, it would seem likely that if the crypto landscape continues to expand ZetaChain would also benefit from it, given what utility ZetaChain can provide to the larger crypto ecosystem overall.

Though, as always, nothing is ever guaranteed in crypto, of course.

How to create a ZETA wallet

Step 1: Visit https://trustwallet.com If you already have a Trust Wallet, skip to Step 5.

Step 2: Download and install Trust Wallet from your mobile app store or your browser.

Step 3: Open Trust Wallet and create a new wallet or import an existing one.

Step 4: Once your wallet is set up, tap on the “Add Token” button.

Step 5: In the search bar, type “ZETA” to find the token.

Step 6: Tap on the ZETA token and select “Add to Wallet” to add it to your Trust Wallet.

After adding ZETA to your Trust Wallet, you will be able to view your ZETA balance and perform transactions with the token.

If you want to support the blog, please donate $ZETA to this address: zeta1jfhstjhaskx2sfq49khx956ee3swspx9ckyma8

ZetaChain FAQ