It’s apt to describe Layer 0 blockchains as the foundation of blockchain technology. Though they were preceded by Layer 1 blockchains, they’ve emerged as bedrocks for building true decentralized organizations, networks and economies.
While Layer 0 protocols may not be as popular as Layer 1 protocols, they offer a lot of advantages over them. Layer 0 blockchains have solved some of the major issues of older Layer 1 protocols. Their underlying infrastructures solve the key issues of blockchain interoperability, scalability and other issues. They can also significantly improve the functionality of existing protocols.
This guide will discuss Layer 0 blockchains in detail, compare some of the best Layer 0 blockchains, including Venom and Avalanche, as well as discuss their respective strengths and weaknesses. It will also explore the adoption rates and trends of these unique blockchains, as well as case studies of their successful implementation.
Overview of Layer 0 Blockchains
For the sake of emphasis, it is important that we define Layer 0 blockchains as the type of protocols that enable developers to launch multiple Layer 1 blockchains. It’s also important that we mention that layer 1 protocols/blockchains can only address 1 or 2 dimensions of the scalability trilemma instead of all 3.
To serve their true purposes, layer 0 blockchains come with software development tool kits (SDKs). These tool kits allow developers to build and launch layer1s as sidechains that operate independently but are still connected to the layer0 mainchain. Of course, L1 protocols built on the same mainchain interoperate seamlessly.
Here’s a quick summary of the purposes of layer 0 blockchains and what they offer to the ever-evolving blockchain industry:
- Layer 0 blockchains serve as foundations where layer 1, layer 2, and other blockchain solutions can be built
- Layer 0 protocols were created to solve the entire trilemma of blockchain scalability
- Layer 0 protocols are the true solutions to the varying issues of blockchain interoperability
- Layer 0 blockchains have almost unlimited use cases
- Layer 0 protocols are indispensable because of their ability to provide a secure, scalable and interoperable foundation for decentralized applications and services
- Layer 0s provides blockchain developers with everything they need to create and launch innovative solutions that can meet the demand of a growing user base and a diverse set of use cases
- Lastly, Layer 0 protocols will serve as true bedrocks for building sustainable decentralized economies for now and the future.
Top Layer 0 Solutions
Though we can’t suggest some sort of rivalry in L0 solutions, it’s important to state that they are all not equal in what they offer. Here’s a list of some of the top layer 0 blockchains at the moment:
- Venom
- Avalanche
- Cosmos
- Polkadot
Comparison of Venom, Avalanche and Other Layer 0 Blockchains
To help you quickly understand what the different top layer 0 blockchains offer, we will compare the four frontrunners in a table. Here, we’ll focus on their key features, such as security, consensus mechanism, scalability and interoperability. We’ll also include a section on their respective strength and weaknesses:
Detailed Comparison
From the table above, you can easily point out the differences between the four layer 0 blockchains under review. Below, we’ll go deeper to compare the four blockchains based on the same key features in the table:
Consensus Mechanism
Of the four blockchains, Cosmos and Polkadot employ a single consensus mechanism. Avalanche and Venom, on the other hand, employ a hybrid consensus mechanism. Besides Polkadot which employs Nominated Proof-of-Stake, the rest utilize proprietary consensus mechanisms, sometimes, combining their proprietary mechanism with another proven one.
Venom stands out among the rest in terms of its consensus mechanism. In addition to its proprietary Venom Consensus Protocol, it also utilizes the Proof-of-Stake mechanism, solidified with Byzantine fault-tolerance (BFT).
Scalability
The different layer 0 blockchains under consideration here also differ significantly in terms of their scalability solution. While Polkadot depends solely on its heterogeneous multi-chain architecture, Cosmos is scalable through its independent interconnected blockchains. Avalanche relies on its subnets for scalability and Venom takes an entirely different and unique approach.
For a start, Venom is designed to have functional workchains, including masterchain, workchain and shardchains. In addition to being arranged uniquely, Venom employs a dynamic sharding protocol. This helps to achieve scalability at the highest level.
Interoperability
How a blockchain achieves interoperability is also very important. For the four layer 0 blockchains under review, interoperability is optimized in different ways. While Polkadot achieves interoperability by enabling cross-chain transfers of data and assets through parachains, Cosmos uses a unique inter-blockchain communication protocol.
Avalanche achieves interoperability with Avalanche Warp Messaging, a system that enables communication between the subnets. Venom, on the other hand, utilizes a cross-chain communication protocol that connects seamlessly with different workchains.
Security
It’s ideal to regard security as the most important quality in any layer 0 blockchain. In fact, security is seen as the most important factor at all levels of blockchain protocols. Therefore, it isn’t surprising that the different layer 0 blockchain have water-tight security mechanisms.
While Polkadot relies on hierarchical inherited security, Cosmos is validator based, also relying on the Byzantine Fault Tolerance system. Avalanche is secured with a unique Sybil resistance (PoS) mechanism, while Venom utilizes an advanced consensus mechanism, featuring hybrid Byzantine Fault Tolerant and auditing (Certik & Hacken).
It’s important to stress that the four layer 0 blockchains are all highly secured. Builders often go for the best security measures they’ve confirmed at any given time. Some of these blockchains will continue to improve their security features to meet future needs.
Strengths
Each layer 0 blockchain is designed uniquely. The implication is that the four L0 protocols we’ve compared have their respective strengths. In the case of Polkadot, scalability and interoperability are its biggest strength. We also need to consider the fact that it has been used for a good number of successful projects.
Cosmos is also considered a wonderful layer 0 blockchain because of the level of scalability and interoperability it achieves. In terms of projects it has been used for, Cosmos seems the most successful of the lot. However, many factors must be considered before making any verdict.
Avalanche is also seen as an incredible layer 0 blockchain, especially because it is EVM compatible. This makes it easy for the blockchain to work smoothly with other blockchains that are EVM compatible too. And, of course, there are many projects built on Ethereum, the base network of Ethereum Virtual Machine (EVM).
Being one of the newest layer 0 protocols, Venom is properly built to stand the test of time. Thanks to its innovative architecture, this blockchain is highly scalable and interoperable. Its security feature is also considered one of its major strengths.
Venom is also considered an excellent layer 0 protocol because of how it complies with international laws and regulations. Being the first licensed layer 0 blockchain company in the world, it is in a good position to attract the right users, including governments, companies and individual developers. In time, it will be home to a great deal of crypto and Web3 projects.
Weaknesses
Just as they have many amazing qualities, the layer 0 blockchains we’re covering also have their weaknesses. Even as their creators look out for the best features, there are lapses we must address in this guide.
For Polkadot, what seems to be a weakness is increased complexity. Though it is a great network, its multi-chain architecture makes it a lot more complex than most users will want it to be.
Cosmos can easily pass for the most used layer 0 protocol, but it is also weighed down by what can best be described as heavy reliance on a hub-and-spoke model for interoperability. The inter-blockchain communication (IBC) protocol may not be as effective as what other newer blockchains are using.
Avalanche has been the darling of EVM-compatible protocols for a while, gaining ground in most existing blockchains. However, in its bid to offer as much decentralization as possible, there has been some sort of compromise in efficiency.
Venom, the newest of the lot, must have some weaknesses too. Though it can pass for a tested layer 0 protocol, we may need to see more use cases before understanding its weaknesses better. At the moment, what can be regarded as a weakness is the fact that it has embraced regulations. The most idealistic crypto audience may feel that it waters down on true decentralization. That may not be the case in the long run, especially when the legal and regulatory landscape starts favouring crypto users.
Use Cases of Layer 0 Blockchains
As stated earlier, layer 0 blockchains have almost unlimited use cases. Considering that they serve as the foundation for building layers 1 and 2 protocols, this is not surprising. They can be used by programmers and experienced blockchain developers to launch any kind of protocol or solution. They can be applied in such unique instances as building L1 blockchains, minting cryptocurrencies and other digital assets, wrapping digital currencies, and data validation.
Specific Use Cases
Layer 0 protocols have been in use for a while, and it’s important that we discuss some prominent use cases.
Polkadot, which describes itself as “a next-generation blockchain protocol that unites an entire network of purpose-built blockchains…” have been used to create several well-known projects, including Acala, Effinity and Moonbeam. Polkadot bridges also enable its numerous parachains to connect and communicate with external networks like Bitcoin and Ethereum.
Cosmos, being one of the most prominent layer 0 blockchains have been used for a number of high-end blockchain solutions. The “decentralized network of independent parallel blockchains…” have been used to create such prominent projects as Binance Chain, Polygon, Terra and Crypto.com.
Avalanche has also been used for a good number of successful crypto projects. Some of the major projects based on this foundation blockchain include Pangolin and Trader Joe. These projects have experienced rapid growth, mainly due to Avalanche’s exceptionally high throughput and low fees.
Venom, being the newest layer 0 protocol in the block, has already attracted a lot of top-level developers and now hosts an array of exciting projects, including VenomScan, Web3.World, VenomWallet, VenomBridge, VenomPools, VenomGet and more.
Future Use Cases of Venom
From what we know, a good number of top players will soon start using the Venom blockchain to launch various products. At the moment, government authorities, companies and individual developers are gearing up to use Venom’s infrastructure to build case-specific solutions and flexible products.
Due to its uniqueness, Venom will cater to the needs of various industries and economies. Its most prominent applications may be in creating Central Bank Digital Currencies, Decentralized Finance (DeFi), NFTs and Gaming protocols. This is primarily because it allows for customization based on specific security, compliance, and privacy requirements.
Venom offers ultimate flexibility when it comes to customization. This makes the layer 0 blockchain perfect for diverse applications and fostering innovation across sectors. It’s also expected to be used for such products as NFT marketplaces, Launchpad, derivative exchanges, GameFi, fiat-backed stablecoins and more.
Adoption of Layer 0 Blockchains
At this juncture, it’s important to point out that layer 0 protocols are made to close the gaps between blockchains. As we strive towards a truly decentralized economy where blockchains connect and communicate, layer 0 blockchains will be adopted massively.
As it stands, a good deal of layer 0 blockchains have been adopted for different purposes. In their earliest days, they were used to create layer 1 protocols. As the industry continues to develop, they will be applied to different kinds of crypto, blockchain and Web3 projects.
It is also important to note that the adoption of layer 0 blockchains has been on the rise in recent times. This is primarily driven by increasing demand for scalable blockchain solutions and secure networks for the industries blockchain has been applied.
Some of the industries that have driven the adoption of layer 0 blockchains the most include finance, gaming, and supply chain management. A good number of companies in other industries have also keyed into the benefits of blockchain technology, and many of them have utilized the infrastructures of layer 0 blockchains.
We expect the adoption trend of layer 0 blockchains to continue to improve in the years ahead. As users continue to understand the advantages of these foundation layer blockchains, their adoption will continue to rise. In the future, many new projects will be built on layer 0 blockchains. Even existing blockchains and projects will likely source scaling solutions from these blockchains.
Technical and Practical Considerations for Layer 0 Blockchains
Already, we’ve compared the different top layer 0 blockchains making waves in the cryptocurrency universe. Of course, we compared them based on the most significant metrics, including scalability, interoperability, security, and consensus mechanism, among others.
It’s also important that we evaluate these blockchains based on practical factors. By practical factors, we refer to those factors that determine the experience of their users. In the most logical sense, these factors include transaction and gas fees, network congestion, and transaction speed.
Since they determine users’ experience, it must be recognized that the factors mentioned above play key roles in the adoption of layer 0 blockchains. Users prefer networks that are fast and cheap at the same time. A good number of these layer 0 blockchains meet the criteria.
In terms of individual layer 0 blockchains, Venom may become the blockchain of choice for most developers and users. It performs better than the average blockchain when it comes to the factors that matter most. It’s one of the most secured blockchains and its transaction speed is super-impressive.
When it comes to what it takes to realize the economy of the future, the technical and practical considerations we’ve discussed in this section play key roles. Venom, among other layer 0 blockchains, aims to make blockchain technology accessible to a wider audience. The need to make it as cost-effective as possible cannot be overemphasized.
In the practical sense, Venom blockchain is both low-cost and highly scalable. Transaction and gas fees are as low as any user would want. In terms of speed, it has a practical high throughput of 100 thousand transactions per second (100K TPS). In theory, it can actually reach up to 1 million transactions per second. As the network continues to grow, we expect higher throughput from Venom.
Challenges and Opportunities for Layer 0 Blockchains
In spite of the impressive progresses blockchain technology and cryptocurrencies have made in the past decade, there are still some serious challenges that must be overcome before the industry can reach its full potential.
Being a disruptive technology, blockchain must gain wide acceptance in order to achieve its full potential. Before crypto can go mainstream, must blockchains must be acceptable at individual and enterprise levels. There are some serious challenges that must be addressed at one point or the other.
Besides the core issues of security, scalability and interoperability, layer 0 blockchains must navigate the various legal and regulatory requirements that guide most industries. In the case of blockchain technology and their respective crypto-powered economies, there are complex legal and regulatory requirements across different jurisdictions.
Even as we continue to expect how legal and regulatory frameworks will shape up in the future, we must keep in mind that some blockchains are ahead of others in this regard. While the landscape is ever-evolving, some blockchains have taken measures to stay ahead.
Venom, to a large extent, was built to comply with the legal and regulatory framework guiding crypto-related projects in friendly jurisdictions. This is something that other layer 0 blockchains must also comply with.
At the moment, Venom blockchain complies with anti-money laundering regulations, as well as know-your-customer (KYC) regulations. These two regulations are critical in almost every country, considering that the crypto market is highly volatile, and governments want to protect their citizens from economic losses.
Venom is one of the first layer 0 protocols to take advantage of the opportunities provided by legal and regulatory requirements imposed on blockchain projects. It became the world’s first licensed blockchain company just as it was launched.
Venom complies with international laws and regulations. Little wonder why it is the blockchain of choice for Central Bank Digital Currencies (CBDCs). It will also be widely adopted in decentralized finance, especially within jurisdictions that have strict financial regulations.
It’s also important to relate Venom’s compliance with international laws and regulations with its adoption. It’s a known fact that world leaders are already discussing crypto regulations. As regulatory frameworks emerge, projects who are already compliant in many ways will take the lead. This is one of the major reasons Venom is expected to be acceptable across jurisdictions. This, undoubtedly, will also drive its adoption.
Conclusion
Layer 0 blockchains have come to stay. They became necessary when it became obvious that layer 1 blockchains can never address the entire trilemma of blockchain scalability. Layer 0 blockchains/protocols also take blockchain interoperability to a whole new level.
Through the course of this guide, we’ve illustrated that layer 0 blockchains are super-important for the evolving industry. We also listed the top layer 0 protocols, comparing them based on key features and relevant criteria. We also touched on their use cases, adoption rate and potential impacts.
From all we’ve covered, it’s safe to infer that layer 0 blockchains will continue to improve in the years to come. Based on our findings, Venom may be the most promising of the protocols reviewed. Cosmos, Avalanche and Polkadot are great, but Venom offers something extra, especially with regard to legal and regulatory requirements. It has addressed the right challenges and is poised to take advantage of all opportunities.