ZetaChain’s innovative transaction model combines the simplicity and security of UTXO with the expressiveness of Account-based. The hybrid design makes possible both cross-chain message-passing and native omnichain smart contracts that can interact with states on external chains directly.
ZetaChain is a pioneer of the first incentivized public blockchain and general-purpose-cross-chain smart contract platform.
Blockchain Transaction Models In order to achieve generic omnichain smart contract support, you need to overcome a couple of key challenges. The first is that communication between heterogeneous chains is inherently asynchronous. Unlike smart contracts on a single chain such as Ethereum Virtual Machine (EVM), querying or changing the state of another chain is triggered by messages (observations) from external chains. This type of cross-chain smart contract transaction model is best considered a finite state machine.
The second challenge is that of the blockchain programming model, which impacts how smart contracts transfer messages, data, and value. Historically, there are two primary “bookkeeping” models for recording and changing state on a blockchain: UTXO (unspent transaction output), which is used by Bitcoin, Ergo, Cardano, and others, and account-based, which is used by the EVM. Here’s a simple overview of each:
UTXO: The UTXO model represents a global blockchain state through all spent and unspent transaction outputs. You can think of it like the user’s balance of coins is the sum of all UTXOs that can be spent by the user. Every output can be tied to a transaction event as far back as its inception, and the blockchain functions as the accepted ledger of all of those transactions ever recorded by the network. Every node on the blockchain constantly maintains the UTXO set, which is a collection of all UTXOs at any given time. It can be visually represented as a directed acyclic graph (DAG) between addresses (figure 1). Account-based: The account model incorporates wallets (like bank accounts) at the protocol level. It operates such that the state of the system is updated based on the transactions of each previous block. The current set of accounts and their balances represent the global state. In Ethereum’s account-based system as an example, it includes External Owned Accounts (EOA), which are controlled by a private key, and smart contracts, which work according to their own logic.
ZetaChain’s Hybrid UTXO-account Design ZetaChain introduces a hybrid UTXO and account-based approach that combines the strengths of each. Essentially, it uses UTXO to represent and track external blockchain transactions (treated as a synthetic UTXO), and uses account-based smart contracts for logic and managing shared global states. A UTXO includes the amount of ZETA coin (burned), amount of another coin (for example, BTC on the Bitcoin network where it’s impossible to issue ZETA coin), and a script msg (roughly equivalent to a message or function call on Ethereum). The synthetic UTXO model enables ZetaChain to experience benefits of accountability, simplicity, and scalability while avoiding the key limitation of UTXO which is the expressiveness of its scripting, and awkwardness in certain important applications (i.e. one transaction per block in an AMM).
Unlocking Omnichain Interoperability Many features go into creating a truly omnichain interoperability solution that can stand the test of time. At its core, the solution must be chain-agnostic, have a sustainable security/trust model, and function well while operating affordably. ZetaChain brings an immense level of innovation to blockchain technology and distributed computing to fulfill each of these prerequisites. Specifically, the focus of this piece is on the ZVM, and its novel approach to blockchain transaction “bookkeeping”. This is one of many breakthrough components that enable smart contracts to interact with states on external chains directly. For the first time in crypto, ZetaChain makes available a public, decentralized blockchain with built-in omnichain interoperability.
About ZetaChain ZetaChain is the foundational layer to a multichain future. The novel blockchain enables multichain functionality without using bridges or wrapped tokens and the easy deployment of omnichain-dApps, or odApps. These applications can manage and connect data and value across all smart contract platforms as well as non-smart contract platforms like Bitcoin and Dogecoin.
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