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Universal EVM
Architecture

ZetaChain is a Proof of Stake (PoS) blockchain built on the Cosmos SDK and the Comet BFT consensus engine. It serves as a universal connector for multiple blockchains, simplifying cross-chain interactions and fostering a unified ecosystem. Leveraging the robust foundations of the Cosmos SDK and Comet BFT, ZetaChain provides fast block times (approximately five seconds), instant finality (eliminating the need for confirmations and preventing chain reorganizations), and high throughput capabilities—potentially reaching up to a hundred transactions per second.

Hub-and-Spoke Model

Operating on a hub-and-spoke model, ZetaChain acts as the central hub connecting multiple external blockchains, which function as the spokes. This centralized approach simplifies cross-chain communication by ensuring consistent protocols, reducing complexity, and enhancing security. All messages and transactions between connected chains pass through ZetaChain, streamlining integration and scalability as new chains are added to the network.

Validators

ZetaChain's network relies on two types of validators essential for its operation and security: Core Validators and Observer-Signer Validators.

Core Validators run the ZetaChain node, known as ZetaCore. They participate in the core consensus process of the blockchain using the Comet BFT consensus protocol. Their primary responsibility is to maintain the blockchain's integrity by producing blocks and maintaining the replicated state machine. By engaging in the consensus mechanism, they ensure that the network remains secure and that transactions are processed accurately.

Anyone who stakes sufficient ZETA tokens can become a validator, contributing to the network's decentralization and permissionless nature. Validators are incentivized through transaction fees and rewards, aligning their interests with the security and stability of the network. By staking bonds in the form of ZETA tokens, validators have a vested interest in acting honestly and maintaining network security, as malicious actions can lead to penalties such as slashing of their staked tokens.

Observer-Signer Validators run both the ZetaChain node (ZetaCore) and the ZetaClient. Observer-Signer validators monitor both ZetaChain and connected external blockchains for specific events that signify cross-chain transactions. Upon detecting an event, they create ballots to vote on the event's validity, requiring a simple majority agreement for the transaction to be considered valid. Once consensus is achieved, the observer set generates the corresponding outbound transaction to be sent to the destination chain.

Validators participate in signing transactions using a Threshold Signature Scheme (TSS), a cryptographic mechanism that ensures no single validator controls the signing key. Instead, a subset of validators must collaborate to produce a valid signature, enhancing security and fault tolerance.

ZetaChain's functionality is organized into several key modules, each responsible for specific aspects of cross-chain transaction processing.

CrossChain Module

The CrossChain module manages the state and lifecycle of cross-chain transactions (CCTX), serving as the central ledger for tracking their progress and statuses. It handles the creation of new cross-chain transaction records when inbound events are validated, updates transaction statuses based on events (such as PendingInbound, PendingOutbound, OutboundMined), and stores detailed parameters for both inbound and outbound transactions, including sender and receiver information, asset details, and transaction hashes.

Observer Module

The Observer module handles the operations of the observer set, including validator management, voting mechanisms, and consensus policies. It maintains a list of authorized observers eligible to participate in the consensus process, creates and tracks ballots for each observed event to facilitate the voting process, and defines core parameters such as ballot thresholds, minimum observer delegation, and supported chains.

Fungible Module

The Fungible module facilitates the deployment and management of fungible tokens (ZRC20 tokens) representing assets from connected blockchains on ZetaChain. It handles the deployment of ZRC20 contracts corresponding to foreign coins from connected chains, manages pools and liquidity for these tokens, and provides functions for depositing to and calling omnichain smart contracts on ZetaChain from connected chains.

Emissions Module

The Emissions module orchestrates the distribution of rewards to network participants, including observers, validators, and TSS signers. It calculates rewards based on participation metrics and predefined parameters, distributes rewards from a pre-funded emissions pool, and allows participants to securely withdraw their earned rewards.

Authority Module

The Authority module encapsulates logic for administrative functions and permission checks, ensuring that only authorized entities can perform sensitive actions. It maintains tables for different admin groups and their permissions, validates whether a user or entity has the necessary permissions to execute specific actions, and facilitates changes to admin groups or permissions through governance proposals, ensuring transparent and decentralized decision-making.

To facilitate interactions between users and the ZetaChain network, protocol contracts are deployed on both ZetaChain and connected external chains. These contracts provide standardized interfaces and functions necessary for initiating and managing cross-chain transactions.

ZetaChain Contracts

  • GatewayZEVM serves as the primary entry point for users to initiate cross-chain transactions from ZetaChain to external chains. It enables users to withdraw assets, call smart contracts on connected chains, and manages the minting and burning of ZRC20 tokens representing assets from external chains.

  • ZRC20 Contracts represent fungible tokens from connected chains within ZetaChain, following the ERC20 standard. They allow seamless asset transfers and interactions on ZetaChain.

EVM Contracts

  • GatewayEVM acts as the entry point for users on external chains to interact with ZetaChain. It allows users to deposit assets to ZetaChain, call smart contracts on ZetaChain, and emits events necessary for observers to initiate cross-chain transactions.

  • ERC20Custody holds ERC20 tokens deposited by users on external chains during cross-chain transactions, ensuring that deposited tokens are securely stored until the transaction is processed.

  • ZetaConnector manages ZETA tokens on external chains, handling both native and non-native scenarios. It facilitates the movement of ZETA tokens between ZetaChain and external chains by using a lock/unlock mechanism for native tokens or minting/burning for wrapped tokens.

ZetaChain employs bonded stakes and positive/negative incentives to ensure economic safety and encourage validators to act honestly. Validators are required to stake bonds in the form of ZETA tokens, which are at risk if they act maliciously or negligently. This staking mechanism aligns the interests of validators with the network's health and security.

Validators earn transaction fees and block rewards in return for their services in processing transactions and maintaining network security. Those who act dishonestly or fail to fulfill their duties can have a portion of their staked bonds slashed as a penalty. Positive incentives are provided to encourage validators to remain online and actively participate in consensus and observation processes.

Cross-chain transactions are fundamental to ZetaChain's functionality, enabling seamless asset transfers and data exchanges between ZetaChain and connected external blockchains. The workflow differs depending on whether the transaction is incoming (from a connected chain to ZetaChain) or outgoing (from ZetaChain to a connected chain). In both cases, the process involves initiation, validation, execution, and handling of successes or failures, all orchestrated to ensure security, efficiency, and reliability.

For incoming transactions, a user initiates a transaction on a connected external blockchain by interacting with gateway contracts, such as depositing assets or invoking a cross-chain call. Observer-Signer Validators monitor the connected chain for specific inbound events emitted by these gateway contracts. Upon detecting such an event, they observe the transaction details and vote on its legitimacy on ZetaChain, reaching consensus through the network's voting mechanism. Once consensus is achieved, the transaction is processed on ZetaChain, updating the state, crediting assets to the user's account, or executing any specified smart contract logic.

In outgoing transactions, a user or smart contract on ZetaChain initiates a transaction intended for a connected external blockchain. Validators on ZetaChain process the transaction and prepare the outbound transaction details, ensuring all parameters are correct and the transaction complies with protocol rules. They use a Threshold Signature Scheme (TSS) to collaboratively sign the outbound transaction, enhancing security by requiring multiple validators to participate. The signed outbound transaction is then submitted and executed on the connected external blockchain; validators effectively sign the transaction on the connected chain, ensuring it is valid and accepted by that network.

If the outbound transaction executes successfully, assets or data are transferred as intended, and the transaction is finalized. If it fails due to execution errors, insufficient gas, or other issues, ZetaChain has mechanisms to handle reverts. Validators can initiate a revert transaction based on predefined revert options, which may involve returning assets to the source chain or executing custom error-handling logic specified by the developer. In rare cases where both the outbound and revert transactions fail, the transaction is marked as aborted, and special mechanisms secure any associated assets. Throughout this process, ZetaChain leverages a robust consensus mechanism and secure transaction processes to ensure that both incoming and outgoing cross-chain transactions are executed efficiently and securely, enhancing interoperability across different blockchain networks while minimizing risks and maintaining user trust.

ZetaChain brings a practical, streamlined approach to one of the biggest challenges in blockchain: cross-chain communication. By serving as a central hub, it simplifies what would otherwise be complex and fragmented processes across different blockchains. Developers gain a powerful platform that removes much of the friction associated with building across multiple networks, without sacrificing security or performance. With a strong validator network, reliable consensus mechanisms, and built-in support for cross-chain transactions, ZetaChain sets the stage for a future where blockchains can work together more naturally, expanding what's possible in decentralized applications. It's not just a technical solution—it's a key piece in the puzzle of a more connected blockchain ecosystem.