Exclusive Interview with Zulu Network CTO: "Building the real L2 scaling layer in the Bitcoin network"

Original | Odaily Planet Daily

Author | Wenser

As the competition of Ethereum L2 networks heats up and the Bitcoin network ecosystem becomes increasingly rich, the Bitcoin L2 network has become the ‘next encryption stronghold’. As a new player in the Bitcoin L2 network that adopts a dual-layer architecture and has recently successfully developed and implemented ZKP verification, Zulu Network is expected to be the first to connect the Bitcoin L1 network, Bitcoin L2 network, and L3 network.

Odaily Star Daily recently conducted an in-depth interview with Zulu Network CTO Cyimon, sharing the behind-the-scenes of the Bitcoin L2 network.

Q: Please give a brief self-introduction, such as your past work experience and the responsibilities you have taken on since joining Zulu Network (referred to as Zulu below) team?

Cyimon: I entered the blockchain industry in 2018, mainly focusing on the ZK field. I have about six years of technical experience. I joined the Zulu team in October last year. The reason for choosing the Bitcoin Layer 2 track is mainly because I saw the release of the BitVM White Paper. Based on these theories, we can truly implement the vision of the Bitcoin Layer 2. After joining the Zulu team, I am responsible for coordinating the technical direction and development-related work. Later, we will provide a detailed introduction to this area, including Zulu’s unique design and current technical progress, etc. Overall, Zulu is an ecological network that aims to bring more extension functions to Bitcoin.

It is worth mentioning that, as the industry’s first Bitcoin L2 project to simulate ZKP on Bitcoin using the Bitcoin language, Zulu has also made significant contributions to the official GitHub code repository of BitVM 2, and has thus received high recognition from BitVM inventor Robin Louis.

Tweet posted by Robin

Q: What challenges are faced in building Layer 2 on the Bitcoin network? What kind of technical solutions are used by other Bitcoin Layer 2 networks on the market?

Cyimon: I think this question is crucial and directly reflects the core vision of Zulu’s founding. As a Bitcoin L2 network, or before the Bitcoin L2 network became popular, most people heard about Ethereum L2 networks. However, whether it is a Bitcoin L2 or an Ethereum L2, the main problem it faces is: as an off-chain network of a public chain, how to inherit the security of L1 network?

For Ethereum, this is a relatively simple task, as it is already very mature, for example, it can verify ZKP, has a certain programmability, etc. But when it comes to the Bitcoin network, it is a bit awkward, because the limitation of ZKP itself programmability directly leads to the inability to directly verify the on-chain state of the L2 network on the Bitcoin network. Because of this limitation, many Bitcoin L2 networks on the market now actually have no direct relationship between the on-chain state and the Bitcoin network itself, which means that their on-chain state may claim to be able to generate a ZK proof, but this proof has never been put on the Bitcoin network for verification. So from a certain perspective, these Bitcoin L2 networks are more like a sidechain, so I think a key challenge facing the construction of L2 networks based on the Bitcoin network is how to allow L2 networks to enjoy the security of the Bitcoin network without forking the Bitcoin network itself.

The security here mainly involves two aspects: first, the economic security of the Bitcoin network, which can form a POS network through staking to maintain the off-chain state verification. If there is a problem, the corresponding assets will be slashed; the second aspect is the network security of the Bitcoin network itself, that is, the security of the POW network. In this state, ZKP verification is not carried out through the staking node network, but by placing it on the Bitcoin network. This is what we really want to do, and it is a key issue that a Bitcoin L2 network must solve, that is, how to inherit the security performance of the Bitcoin network? Therefore, in fact, the on-chain security of other Bitcoin L2 networks has little to do with the Bitcoin network, and a highly difficult problem involved here is how to complete ZKP verification on Bitcoin.

Zulu has been paying attention to how to achieve programmability and ZKP on the Bitcoin network since the release of the BitVM White Paper. After several months of effort, we finally announced a phased achievement last week, which is currently capable of implementing ZKP verification using Bitcoin scripts* (Note: see* Zulu open-sourced the code for ZKP verification using Bitcoin, involving mainstream algorithms Groth 16/FFlonk*).* This is a significant technological breakthrough in the industry, as once zk verify can be implemented through Bitcoin scripts, punishment for malicious actors can be achieved through a challenge mechanism similar to Arbitrum. Therefore, this is equivalent to indirectly enjoying the security of the Bitcoin network. Compared to other Bitcoin L2 networks, this is a unique technical implementation by Zulu and a leading solution.

Q: How should we understand the dual-layer architecture repeatedly mentioned in the official documentation in terms of design concepts and ideas? For example, features, functions, competitive advantages, etc.

Cyimon: We need to talk about the design concept behind Zulu to make it easier for friends who are not very familiar with technology to understand the dual-layer architecture intuitively and clearly.

To talk about this, we first need to clarify: why does the encryption industry need L2 networks, or why does Bitcoin need L2 networks?

As mentioned in the answer to the first question just now, where does the security guarantee of the Bitcoin L2 network come from. The reason why Zulu adopts a two-layer architecture is mainly due to functional considerations. Taking Ethereum as an example, because it has programmability, the Ethereum L2 network mainly helps the L1 network solve two problems: one is TPS, and the other is operating cost. But for the Bitcoin network, in addition to cost and TPS issues, we can also provide expansion support with the same L2 network, and achieve functions that the existing Bitcoin network has not yet implemented. This is the design reason for the two-layer architecture. Speaking of Ethereum, in the early design stage, the Ethereum network was not a ZK-friendly native environment. The emergence of L2 networks or development routes centered on Rollup provides an experimental field for more innovative designs. In other words, some innovative functions or technologies can be tested on L2 networks in a small scale. If the technical superiority is verified and recognized on a larger scale, it can be fed back to the L1 network. This is also the reason why Ethereum gradually integrates Rollup and ZKEVM into the L1 network.

So returning to the Bitcoin network, while helping to expand the TPS and reduce operating costs, the expansion of functionality is also an important part.

This involves another layer in our dual-layer architecture - the L3 network, which can be simply understood as the “function expansion layer”, that is, based on maintaining the asset types of UTXO in the Bitcoin network, increasing its programmability, which also lays a certain foundation for more entrepreneurs to engage in research and development work on this basis in the future.

And the current L2 network that has been launched is mainly dedicated to DeFi on the Bitcoin network, or what we generally call BitcoinFi in the industry. Because the Bitcoin network and Bitcoin itself are high-value assets, if we want to activate these assets, we generally prefer to use a more mature DeFi framework. Zulu’s L3 is an extension platform based on UTXO programmability, which often uses a new programming language and a brand new virtual machine. If we were to build a DeFi application right from the start, there might be potential security risks. Therefore, prior to this, in order to facilitate the rapid utilization of existing Bitcoin assets in the industry’s relatively mature DeFi applications, a Bitcoin L2 compatible with the EVM network became the best solution. This means using applications with higher security to release existing liquidity. The L3 network is meant to lay the groundwork and foundation for more development and innovation in the future. This is Zulu’s current significant competitive advantage.

Because currently, most Bitcoin L2 networks are EVM compatible or EVM only compatible, which means that users’ Bitcoin assets can flow to DeFi applications. However, this is relatively less innovative or incremental for industry users and the Bitcoin network, as the gameplay is not much different from Ethereum. Therefore, compared with the dual-layer architecture of Zulu and other Bitcoin L2 networks, there is more room for development.

Finally, let’s emphasize our security again. As mentioned earlier, our security is mainly reflected in the fact that the L3 network will be terminated in the L2 network, and the state of the L2 network will be verified by ZKP to enjoy the network security of the Bitcoin network itself, which is also our latest development achievement. In this respect, Zulu is the only Bitcoin L2 network that can enjoy the security of the Bitcoin network.

Q: I have also learned about the progress of Zulu bridge and Lwaiz V4 technology development before. Can you elaborate on this?

Cyimon: Lwazi V4 is the codename for the testnet version, and Zulu bridge is a unique bridge tool currently under development, which can achieve off-chain state verification through ZKP at the Bitcoin network level, representing a core value of Zulu. Specifically for user participation, we will release a trust-minimized Bitcoin bridge in the future, allowing users to experience cross-chain asset transactions and bridge on the Bitcoin network. User participation will also help us conduct security and usability testing for Zulu bridge. Please follow the subsequent official document releases for more details.

Zulu Network Three-Layer Design Architecture

Q: From the perspective of the ultimate goal, what application scenarios does the Bitcoin network need to support, and what are the necessary components of the ecological architecture? Will the Bitcoin network generate N L2 networks like the Ethereum network?

Cyimon: It is worth answering the question of the application scenarios of the Bitcoin network first.

Currently, we can find that besides Bitcoin, there is actually no other asset in the Bitcoin network. This is actually a very exaggerated thing, including the previous inscriptions and the recently popular runic projects, none of them have surpassed the asset framework of Bitcoin. So I think the Bitcoin network itself contains tremendous energy. In terms of specific application scenarios, the first is to activate existing assets like Babylon, by staking or other behaviors, to truly unleash the liquidity power of these assets. This is one aspect. Whether we can do something to enhance network security based on activating existing assets is also a very promising application scenario. This is also the reason why some projects choose the asset staking or re-staking track of the Bitcoin network. Of course, these trend projects are based on the background of massive funds in the Bitcoin network, that is, to realize the appreciation of Bitcoin network assets.

Given the current situation where no other high market cap projects have emerged on the Bitcoin network, another important scenario is to support programmability based on Bitcoin asset types, enabling developers to diversify application development based on UTXO asset types. Taking the previous Ordinals protocol as an example, many index indexes are run centrally, and different platforms have different operating standards, which leads to differences in asset recognition. If development is based on extending UTXO programmability, indexes can be written in industry-recognized standard formats, such as so-called smart contract forms.

And based on the expanded concurrency of UTXO (because the spending of each UTXO can be independent, unlike the account model, which can only send transactions one by one), it can provide support for many scenarios that require concurrent processing capabilities, thereby providing assistance to the industry’s mass adoption.

As for the essential components of the ecological architecture, I think the bridge is very crucial, that is, how to achieve the secure transfer of assets between the Bitcoin network and the L2 network, while ensuring that the L2 network enjoys the security guarantee of the Bitcoin network. This is a very important module.

Finally, regarding the number and development pattern of Bitcoin L2 networks, my current feeling is that Bitcoin the development of L2 networks borrows from Ethereum long things, so it may not be as long L2 as Ether networks, which is not the style of Bitcoin networks. Bitcoin L2 may release chains of different Virtual Machine in the future, for example, some projects are building EVM-compatible networks on Bitcoin networks, some projects are building Solana Virtual Machine-compatible networks, and some are building Virtual Machine-compatible networks for the Move language. As far as I know, some people are already trying to build SVMs to move to Bitcoin, because a more important reason here is that the Bitcoin L1 network does not have virtual machines, so the L2 network can move different types of virtual machines, so the Bitcoin L2 network will have greater differences than the Ethereum L2 network. For example, Zulu’s L3 network is a Virtual Machine to extend UTXOs, unlike the Ethereum L2 network, which is very long “reinventing the wheel”, so the Bitcoin L2 pattern is definitely different. Because if a project wants to achieve more long benefits, it needs to innovate more long combination of Bitcoin L2 networks, rather than just copying them.

Q: What are the development stages of Zulu and what are some important milestones in the next three to six months? Could you please share briefly on this?

Cyimon: Overall, it mainly consists of 3 parts.

First, the most important thing for L2 network is the Zulu bridge, which is the bridge.

Second, it is about the release of L3, which is inseparable from our community members and our technical development team, testing the testnet experience together, completing the test as soon as possible, and we will also make timely official announcements for important events and technical iterations;

Third, our Zulu team will also uphold the entrepreneurial spirit of the Bitcoin community, gradually open sourcing a variety of mature technologies and features, making it easier for more projects to adopt our secure solutions, allowing more projects in the market to benefit, further enriching the development of the Bitcoin ecosystem.

In terms of time nodes, these three parts will be carried out in sequence. Our current goal is to push Zulu bridge and testnet to the market before the end of the third quarter of 2024 and encourage more users to participate. As for the specific time, the development of the bridge is a difficult technical work and there are no mature solutions or products to refer to, so we are gradually overcoming difficulties. It can only be said that we have already implemented the most critical and difficult part, and we still need to iterate on the challenge protocol and slashing protocol based on the existing modules. After all these are completed, the minimum trustless bridge can be pushed to the testnet.

Q: From the perspective of technical developers, what are the considerations or standards for developers, applications, and partners in terms of ecological construction?

**Cyimon：**From a technical perspective, in terms of partner selection, for the sake of developing the Bitcoin ecosystem, Zulu is also looking forward to the emergence of more excellent projects and teams, such as Babylon, Nubit, to address issues like DA and economic security of asset stake.

Because what Zulu wants to do is a “real Bitcoin L2 network”, which means it can help the Bitcoin network achieve functional expansion and enjoy the security guarantee of the Bitcoin network. The security guarantee includes both the economic security and the network security of the Bitcoin network.

Specifically, economic security is achieved by staking Bitcoin to form a POS network that protects the off-chain state correctness of the Zulu network. Once there is suspicion of issues with the Zulu network, a challenge can be initiated on the Bitcoin network, and the finality of the challenge will be executed on the Bitcoin network. Currently, this functionality is only achievable by Zulu and it is also the key point of our collaboration with Babylon: they provide a comprehensive asset slashing mechanism, while we act as the off-chain execution operation network. Considering the data load issue of the Bitcoin network, we also prefer to store data in the network of our partners who specialize in Bitcoin ecosystem DA applications. Therefore, in partner selection, we value mutually beneficial cooperation.

As for the developer ecosystem construction, I think it’s the same as the traditional model. First of all, Zulu is providing a “stage” for developers, which is a very meaningful thing. After the L3 network goes online, Bitcoin ecosystem developers will be able to carry out diversified development experiments and application explorations on it. We will also invest a lot of effort and funds to help expand more application scenarios for the Bitcoin ecosystem, especially based on the extended UTXO type, to try more types of fair issuance of assets.

Moreover, based on parallel mechanism, Zulu’s L3 network also supports the implementation of more innovative gameplay, and the so-called Mass Adoption is no longer a castle in the air.

Zulu official website interface

Q: Will Bitcoin Lightning Payments and the Lightning Network develop rapidly in the future? As mentioned in the Bitcoin White Paper, its initial design was as a peer-to-peer payment system, but currently, it is more valued as a store of value, often referred to as ‘digital gold’. What is your opinion on this?

**Cyimon：**Personally, I think that Bitcoin is now equivalent to the existence of precious metal assets such as gold. So few people are willing to trade it back and forth, most people want to hold Bitcoin, and try to get more Bitcoin. So, regarding the Lightning Network issue, there are developers around me doing related things, and I look forward to them pushing the Lightning Network to a wider range of applications.

Q: Finally, what is Zulu’s ultimate vision, and what are the milestones set at different stages? Is it more data-oriented, or what kind of type?

Cyimon: In summary, the ultimate vision of Zulu is to contribute to the expansion of the Bitcoin network. In other words, Zulu is the ‘real Bitcoin network expansion layer’, which includes various aspects such as performance improvement, cost reduction, and ecosystem expansion. I would also like to mention that I am very fond of Babylon’s market positioning, which aims to leverage the economic value of 21 million Bitcoins. In contrast, we prefer to achieve a comprehensive expansion of the Bitcoin network. (Reporter: Does this imply an ecological combination?)

Cyimon: Yes, as for different milestones, we focus more on technological iterations and updates because we feel that Bitcoin has fallen behind many other public chains in terms of infrastructure, but it is still the largest ecological network in terms of economic value. Therefore, our future goals will still be Zulu bridge, L3 network, and Bitcoin ecosystem expansion as the three major parts that we need to continuously break through. (Reporter’s note: It really is the perspective of a technician, giving a sense of the V1, V2, V3 versions of product updates.)

Q: Are there any stories about the Bitcoin ecosystem or technical development process that had a spark of inspiration to share in the end?

Cyimon: Yes, there happens to be a very interesting ‘industry misunderstanding’ that I can take this opportunity to clarify and express my personal opinion. I hope that more people can understand what Zulu bridge is and what it means, especially in relation to BitVM. Many projects in the market claim to be built on BitVM when building their own bridges, but there is a very significant misconception regarding the ‘BitVM bridge’ here.

The inventor of BitVM, Robin, did indeed write a bridge design in BitVM. However, this bridge is different from the bridge of Ethereum. Strictly speaking, it is not open to ordinary users for asset transfer; instead, it focuses on the issuance of assets, so it is designed more for fixed amounts of inflow and outflow.

For example, it can be understood as a centralized entity that issues an asset on Ethereum, such as WBTC. Users use the bridge based on their trust in this centralized entity to control this centralized asset. However, BitVM’s bridge is designed for asset issuance, not for ordinary users’ asset cross-chain transfer. Of course, Zulu will also release relevant articles to explain the specific details and precautions about which cross-swap based on BitVM is used for asset issuance and which is used for ordinary user asset transfer. However, here is only one of the most intuitive limitations mentioned, that is, once the user crosses 1 Bitcoin over, if they subsequently make money through operations and this 1 Bitcoin becomes 1.5 Bitcoins, they cannot cross back because the bridge now limits users to only cross 1 Bitcoin back. Therefore, once the user’s assets change, this bridge may not be used properly, and this mechanism will also be invalid. So, this bridge is not for ordinary users to use.