ZenIP 42406 Addendum: Proposing a Bold Leap Forward to Base for $ZEN and EON

[zain]

Preamble

• ZenIP: 42408
• Title: ZenIP 42406 Addendum: Proposing a Bold Leap Forward to Base for $ZEN and EON
• Owner: Zain Cheng
• Discussions-To: zain@horizenlabs.io
• Status: Draft
• Type: Technical
• Created: February 13, 2025
• License: MIT

Abstract

The blockchain landscape is evolving at an extraordinary pace, and Base has emerged as the cornerstone in scalability, ecosystem integration, and developer support. This addendum outlines a more efficient model: migrating $ZEN and EON to Base as an appchain optimized for privacy-preserving apps. Base is an Ethereum Layer 2 (L2) offering a secure, low-cost, builder-friendly way for anyone, anywhere, to build onchain. An appchain is a dedicated Layer 3 blockchain that rolls up to a L2, inheriting its security and liquidity while offering enhanced scalability, interoperability, and customization for specialized applications.

This shift represents a major opportunity for Horizen to align with a rapidly growing ecosystem and leverage unparalleled scalability. While ZenIP 42406 outlines a migration to EON 2.0 using the Substrate framework, this document argues that Base’s rapidly expanding ecosystem, unmatched scalability, and robust developer infrastructure present a groundbreaking opportunity for Horizen.

Even though I authored the original ZenIP 42406, it has become clear that migrating to Base offers a far superior strategy. This addendum doesn’t propose a new mission for Horizen 2.0 - our goals and vision remain unchanged. Instead, it presents a more effective deployment environment that better aligns with our long-term objectives. The foundational work from ZenIP 42406 can be repurposed to support this strategic shift to Base, ensuring that our initial efforts continue to add value in this new direction. By aligning with Base, Horizen can leapfrog competitors and enhance its impact within the decentralized ecosystem.

Motivation

Choosing Base as our appchain environment is not just a migration - it’s a strategic leap into the future of permissionless, global systems. This bold move offers several compelling advantages over the previous Substrate-based EON 2.0 plan:

• Enhanced Ecosystem Integration: Base’s deep integration with the Ethereum ecosystem provides immediate access to a wide range of DeFi protocols, wallets, and dApps, significantly boosting $ZEN’s utility and adoption.

• Unprecedented Scalability and Performance: Base leverages Optimism’s OP Stack for high throughput and fast transaction finality. Its 2025 roadmap aims to scale blockspace capacity to 250 Mgas/s with sub-1 second transaction speeds at costs below 1 cent - creating a foundation for mass adoption of ZK applications.

• Developer Ecosystem and Resources: Base’s rapidly growing developer community, combined with Coinbase’s support infrastructure, accelerates dApp development, and attracts high-quality projects to Horizen.

• Institutional Trust and Security: Built by Coinbase, Base offers regulatory compliance and enterprise-grade security, continuing to position $ZEN as a trusted asset in both institutional and retail markets.

• Network Growth and Future-Proofing: Jesse Pollak, Creator of Base and VP of Engineering at Coinbase, anticipates over 100 L3s launching on Base in 2025. This surge reflects a growing demand for dedicated blockspace and underscores the network effects Base offers. We have the opportunity to be among the first to establish a presence, positioning Horizen as an early leader in this rapidly expanding ecosystem. Base’s mission to build a global onchain economy focused on innovation, creativity, and inclusivity perfectly aligns with Horizen’s vision.

• Rapid Growth in Total Value Locked (TVL): In an eye-opening analysis, Base is shown to be surpassing established platforms like Arbitrum, Optimism, Sui, and Aptos in TVL within just a year. This extraordinary pace of growth highlights Base’s robust ecosystem and its capacity to attract substantial capital and user engagement—positioning it as the ideal environment for $ZEN and EON.

• Flexibility and Cost Reduction: As outlined in Coinbase’s ELI5 blog post, Layer 3 solutions offer up to 1000x cheaper transactions by utilizing alternative data availability solutions and more predictable gas fees. Layer 3s provide unparalleled flexibility for developers to experiment with tokenomics, virtual machines, and data structures, offering Horizen the freedom to innovate while capitalizing on Base’s existing liquidity and network effects.

• Joining the Superchain Ecosystem and the Greater Ethereum Movement: By migrating to Base, Horizen could become part of the broader Superchain ecosystem, joining prominent chains like World Chain and Unichain. This potential integration would tap into the collective network effects and liquidity of interconnected Layer 2s and Layer 3s. This alignment not only enhances $ZEN’s visibility and adoption but also situates Horizen within the greater Ethereum movement, amplifying its role in the future of decentralized technology.

• Enhancing Privacy in a Scalable Ecosystem: By migrating to Base, Horizen would also bring its strong privacy-focused mission into the broader Superchain ecosystem. This integration offers a unique value proposition, combining Horizen’s expertise in privacy-preserving technologies with Base’s scalable, interoperable framework. As privacy becomes an increasingly critical component of blockchain applications, Horizen’s robust privacy features will complement the transparency and efficiency of Base, providing users and developers with versatile, secure solutions.

• Successful L3 Case Studies on Base: Several projects have successfully launched as L3 solutions on Base, demonstrating the platform’s potential for fostering innovation and growth:

  • B3 Gaming Layer: Developed by former Coinbase engineers, B3 is a gaming-focused Layer 3 built on Base. B3 has achieved significant milestones, including a recent Coinbase listing. This underscores the strategic advantages of aligning with Base, highlighting how Horizen can similarly benefit from deep integrations and ecosystem support.

  • Degen (DEGEN): Originating as a reward token within the Farcaster community, Degen has evolved into a Layer 3 protocol aiming to enhance blockchain interoperability and user engagement. By leveraging community-driven initiatives, Degen seeks to create a more interconnected and efficient blockchain ecosystem.

• Optimized ZK Integration: Base’s modular architecture allows for seamless ZK integration. This flexibility enables Horizen to leverage existing rollup infrastructure while focusing on pioneering ZK innovations.

• Cross-Chain Interoperability: Base’s robust bridging capabilities foster interoperability with other L2s and L1s, expanding the reach and composability of $ZEN and Horizen.

• Cost Efficiency: By leveraging Base’s established infrastructure, Horizen can reduce overhead and maintenance costs significantly compared with the costs of developing and maintaining a standalone Substrate-based chain.

Specification

Executing this bold leap will involve the following technical adjustments:

• Architecture: $ZEN and EON will operate as a Layer 3 on Base, harnessing its scalability while enhancing ZK application functionality.

• Migration Path: Account balances will be transferred, with all smart contracts on EON wound down prior to the snapshot. This streamlined approach will allow for a quicker, more efficient transition while minimizing technical complexities. $ZEN holders will experience a seamless migration, with future smart contracts deployed natively on the Base appchain.

• Consensus: Base’s Optimistic Rollup architecture will handle consensus, while Horizen retains control over application-layer governance and staking mechanisms.

• Security & Compliance: Base’s infrastructure benefits from Coinbase’s industry-leading security protocols and regulatory compliance, offering the reliability and assurance of a “Made in the USA” platform. This foundation fortifies Horizen’s ecosystem with robust protections and regulatory clarity.

Rationale

This strategic shift positions Horizen for rapid growth, technological leadership, and ecosystem integration. Base’s robust infrastructure, combined with its expansive vision for the future, offers a compelling alternative to the standalone Substrate-based Horizen 2.0 architecture. Furthermore, the foundational work laid out in ZenIP 42406 remains invaluable and can be adapted to support this strategic transition, ensuring continuity and maximized resource utilization.

• Security & Privacy Considerations: Base’s infrastructure is fortified by Coinbase’s stringent security protocols and regulatory compliance.

• Estimated Timeline and Cost: A comparative analysis of migration costs and timelines will be conducted. Early estimates suggest cost savings due to reduced infrastructure maintenance and faster development cycles.

Conclusion

This addendum proposes a strategic migration: transitioning $ZEN and EON to Base as an appchain. By leveraging Base’s infrastructure, rapid ecosystem growth, and Layer 3 innovations, Horizen can outpace competitors, enhance its ecosystem, and secure its position as a leader in the blockchain space. The efforts from ZenIP 42406 will be integral in this transition, providing a strong foundation for the proposed advancements.

[blockops]

I am totally in suppor of this idea! The big worry I had about Horizen 2.0 as a standalone blockchain was if we could give people enough of a reason to bridge over it to use it

Also, with ZEN limited to 21 million supply, the ongoing costs of running the infrastructure were a concern for me

As an Appchain on Base, Horizen get

• Really low infrastructure costs
• Easy access to liquidity through efficient bridges
• Integration into the much bigger Ethereum community
• Gettin ZEN off Horizen and into other blockchain DEX’s

Being part of Horizen Labs last year and seeing how well the process went in working with a Rollup As A Service provider really demonstrated how well this type of upgrade can work

[nrdl]

Your idea is excellent. Looking at the Artemis Terminal, BASE currently holds the third-largest active user base after Solana and NEAR, and its Total Value Locked (TVL) has grown nearly tenfold over the past year. As you mentioned, migrating to BASE would not only tap into its ecosystem but also expose Horizen to future possibilities across other EVM-compatible Layer networks. Ultimately, the core value of blockchain lies in active users. At this point, the majority of Ethereum Layer 2 active users are effectively concentrated on BASE, and this dominance is likely to grow further due to its integration with Coinbase.

Given Coinbase’s status as a U.S.-listed company, there is clear potential for regulated institutions to launch financial products on BASE in the future. By aligning with BASE, we could integrate its DeFi offerings with Horizen’s zero-knowledge (ZK) capabilities, enabling the development of innovative DApps that highlight Horizen’s unique strengths.

[blockops]

I think that by buying a token you join a club and express support for what the club does. The corollary of that is the club has to have a reason to exist. There could be a different emphasis for each individual, and it should be able to expressed by the people in the club, the token holders, in many different ways, but it should encompass a basic idea held by all the members of the club.

We have always talked about Horizen supporting privacy in transactions. We removed private payments so as to not get banned by governments, and are pursuing this goal in a different way, one that is more in line with what crypto is capable of these days.

I believe that crypto is going to be used much more by individuals and small business when it encompasses Basic Business Privacy.

I get paid in crypto as a token on Ethereum, and I know people can track my wallet activity. I don’t like that, and I don’t want it to happen. I want to see the Horizen L3 Appchain on Base be a place where there are applications that enable Basic Business Privacy, where a business can pay others without the getting tracked by its competitors.

I think Horizen is well positioned to accomplish this, and I think Coinbase has been in the forefront of standing up to regulators in the USA. The Base team has indicate they would like to have a privacy project as part of their ecosystem, and I believe people who support that will buy ZEN and use the privacy enabled apps we are going to get built on Horizen

[nrdl]

I think it’s a great idea to make Horizen EVM-compatible, as it ultimately aims to attract more EVM developers. Therefore, migrating to the most active EVM Layer 2 could also be a solid strategy. However, developer interest in new chains tends to surge significantly when the market is in an upward trend, as this period naturally drives higher activity and visibility.

While moving to Base seems like an excellent idea, I’m concerned that such a transition might push back the originally planned timeline. It’s crucial to prioritize rapid development to maximize exposure during this bull market and seize the opportunity while it lasts…

[blockops]

I believe that DAO‘s are going to be one of the major organizing methods for people in the future and their importance will continue to grow.

Current organizing methods of where a person was born and lives, or what company or organization they work for have restrictions built into them.

When you buy a token and become a member of an organization that is governed by a DAO, it lets you choose who you will associate with.

That’s one reason why buying a token is more than a financial decision, it’s an expression of who you are

The people who choose to be part of the Horizen community by buying Zen would of course like to get the benefit of an increase in the price of Zen, because that means the demand for the token is going up, it means that the be beliefs of the members of the club, as expressed through their DAO voting preferences, are becoming more important and more popular.

This is the long-term way to raise the price of a token, especially one with a limited supply, like Zen has.

I enjoy being part of this group of people who are similar to me in many ways, and yet are their own unique individuals. I’ve been a Zen holder since the very beginning, and have worked for many years to help make it a project for people to be proud of, and will continue doing so for a long time

How this pertains to the decision for Horizen to be a Blockchain in the Base ecosystem, is I truly respect with the Coinbase leadership team has done over the last four years in standing up to the onerous regulation by the US government.

I think by Horizen associating with Base in this technically intertwined way is yet another way for us to express our beliefs that we can bring the advantages of crypto with a bit of privacy to many people all over the world

[blockops]

Completely agree with you. Both the Horizen Labs and the Base tech team are working to step through this process as quickly as possible

The first and most important part of this process is to engage the community and get full support so that the Horizen DAO positive vote gives the greenlight for all the work to go ahead

[finpunk]

I’m also hugely in favor of this proposal. Horizen should go to where the users are and where it can provide unique value, like bringing ZK and privacy to Base.

[AltTimeHigh]

Really exciting timing for this move, especially looking at the traction Base is gaining.

Feels like we’re positioning ourselves at the forefront of something big, rather than playing catch up.

Regulatory compliant privacy is going to be huge, it’s been proven many times over that it won’t work any other way - we’ve seen that as a project first hand.

Lets spend more time innovating and attracting all the things we’ve been missing, killer dapps, marketing exposure, users, developers.

Lets see Horizen get the recognition it deserves.

[AstarZens]

I’m curious about what will change when migrating from the parachain to the Base chain.

1. What are the pros and cons of changing from Parachain(L2) to Basechain(L3)?
   → Little understand (Refer to the attached link)

If EON Remains a Parachain (Polkadot-Based)
Advantages
Shared Security from Polkadot

As a parachain, Polkadot’s Relay Chain provides security, eliminating the need for a separate validator network.
Reduces the initial costs of securing the network.
Interoperability with the Polkadot Ecosystem

EON can seamlessly communicate with other parachains using XCMP and HRMP.
This makes it easier to connect with other chains in the Polkadot ecosystem.
Governance and Network Stability

EON can leverage Polkadot’s governance framework, ensuring transparency and stability.
Disadvantages
Parachain Slot Auction Costs

To maintain a parachain slot, DOT staking and auction fees can be expensive.
Limited Flexibility

Parachains must follow Polkadot’s rules, restricting their ability to implement custom blockchain infrastructure.
Integrating alternative data availability (DA) solutions can be more difficult.
Potential Scalability Constraints

Because parachains share resources with the Relay Chain, transaction throughput (TPS) may be limited.
This could be a drawback for EON if it needs high transaction processing capacity.
If EON Migrates to a Base Chain (Independent Blockchain)
Advantages
Full Independence and Flexibility

Free from Polkadot’s limitations, EON can design its own blockchain architecture.
Custom tokenomics and gas fee models can be implemented.
Better Scalability

Can integrate Layer 2 solutions (e.g., Rollups) and other scaling technologies.
More suitable for handling high transaction volumes.
Enhanced EVM Compatibility and Technology Integration

Since EON is an EVM-compatible smart contract platform, it can easily integrate with external solutions like Celestia DA or EigenDA.
Provides more flexibility in cross-chain connectivity.
Potential Cost Savings

No need to bid for a parachain slot, allowing EON to establish its own economic model.
Disadvantages
Security Considerations

Unlike a parachain, EON must establish and maintain its own validator network.
Early-stage security costs could be higher.
Loss of Direct Polkadot Interoperability

Loses access to Polkadot’s built-in interoperability (XCMP, HRMP).
Requires additional bridging solutions, which add development complexity.
User and Developer Migration Uncertainty

Existing users and developers may not transition smoothly from Polkadot to the new base chain.
Conclusion: Parachain vs. Base Chain – Which is Better for EON?
Staying a Parachain is better if:
EON relies on Polkadot’s interoperability and shared security.
Running an independent validator network is not feasible.
The goal is to retain existing Polkadot users and projects.

Migrating to a Base Chain is better if:
EON wants full autonomy and no longer wants to rely on Polkadot’s structure.
Greater EVM compatibility and integration with technologies like Celestia DA or EigenDA is needed.
Eliminating parachain slot costs and establishing an independent economic model is a priority.

For long-term growth as an EVM-based smart contract platform, transitioning to a Base Chain may be the better option. However, it’s essential to establish a strong validator network and secure cross-chain bridges to address potential risks.

2. Are ZkPV and ZEN’s plans (Zk home) valid?
   → Is Zen used for gas? The basechain doesn’t have its own token. Isn’t ETH used for gas, fees?

[rocket]

If EON has taught us anything, it’s that bootstrapping an ecosystem from scratch as a standalone Layer 1 in today’s landscape is extremely difficult if not impossible. Competing with established ecosystems in terms of liquidity, developer adoption, and network effects requires immense resources, time, and momentum that are hard to sustain.

By joining Base, we bypass these challenges and immediately tap into a thriving, high-growth environment. Base offers deep Ethereum integration, instant access to liquidity, and a robust developer ecosystem, eliminating the need to build from the ground up. Instead of spending years overcoming adoption barriers, Horizen can focus on innovation trough ZK.

[AltTimeHigh]

Although it would have been a parachain it would not have been attached to Polkadot or be involved in auctions or attached to their ecosystem. It would have been attached to zkVerify which was its own completely new relay chain. It was just built using the same technology - substrate.

So moving to Base provides a lot more opportunity I think, in terms of other connected chains and dapps as well as having a much better integration with Ethereum.

[krile]

Can someone explain what exactly this means technically?

When I hear Base I just hear extremely centralized (Coinbase being the only sequencer) and memecoin fairyland. Can someone please convince me otherwise, I might be out of the loop on this

Edit:
Went ahead in trying to wrap my head around this annuncement. Is this chatgpt definition regarding the fees correct?

How Would Base Charge Horizen (L3) for Transactions?

Since Base ultimately submits transactions to Ethereum, it incurs costs for data availability, computation, and security. If Horizen moves to Base as an L3, it would need to pay Base for these services.

Here’s how this cost structure might work:

1. Horizen (L3) Users Pay Gas in ZEN (or a Chosen Token)

• If Horizen sets up its L3 to use ZEN as the gas token, users will pay transaction fees in ZEN when sending transactions.
• This fee would help cover Horizen’s operational costs, including the cost of submitting batches to Base.

2. Horizen (L3) Pays Base (L2) for Batch Submission

• Horizen’s network will aggregate transactions and submit them to Base.
• Base will charge a fee (in ETH) to Horizen for processing these batches and posting them to Ethereum.
• This cost is similar to what L2s pay Ethereum for security.

3. Base (L2) Pays Ethereum (L1) for Final Settlement

• Eventually, Base will batch its own transactions (including Horizen’s L3 data) and submit them to Ethereum.
• Base will pay Ethereum gas fees in ETH to secure these transactions.

---

Who Ultimately Pays the ETH Fees?

• Horizen (L3) itself must acquire ETH to pay Base for its rollup services.
• This could be done by:
  • Charging users ZEN and converting it to ETH behind the scenes.
  • Making users pay directly in ETH for certain operations (less likely).
  • Having an alternative revenue stream to subsidize these fees.

Horizen could bundle these fees into the ZEN gas fees users pay, meaning users would never need to directly interact with ETH.

---

Final Summary:

1. Horizen (L3) users pay gas fees (likely in ZEN).
2. Horizen (L3) pays Base (L2) in ETH to batch & settle transactions.
3. Base (L2) pays Ethereum (L1) in ETH for final security & settlement.

Horizen would need some ETH in its treasury to cover payments to Base, unless it builds a system to automatically swap a portion of collected ZEN fees into ETH.

[blockops]

EON is not on a parachain, it is on a custom EVM written in Scala on the Scorex framework

The Horizen proposal was to move to the parachain, but we stopped before building the parachain testnet to see if there were other, better options

Horizen as an L3 is a better option for more users and lower costs than a standalone EVM on substrate

[blockops]

This is correct. L2’s pay much lower fees than Ethereum, and L3’s pay much lower fees than L2’s. The transaction fees would be very small

[krile]

But still in the end ETH must be payed to Base? There is nothing in the proposal about this. I think this should be made more clear.

Also I don’t see the extreme centralization of Base to be considered an issue here? More like a benefit?

[Khan]

How and will this affect node operators? I assume this is the “substrate” referred to in the Cost Efficiency section. Can you clarify?

[Blockchainzilla]

Thank you for this Zain!

A handful of questions:

• Can you expound on cross-chain interoperability? Are the plans on Base’s side different than Optimism’s more broadly? Will the Base ecosystem inherit the interop framework that OP is developing (Superchain interoperability explainer | Optimism Docs)?

• Relatedly, in terms of accessing both Base and OP’s liquidity (OP Stack | Superchain Eco), that’s not something we’ve seen a lot of flowing outside of the top handful of chains so would be interested in understanding the plans there for:

1. Common Bridging Standards
2. Chain Abstraction
3. Atomic Swaps
4. Cross-Chain Messaging Standards
5. Token Deployment standards and assistance

• What does joining the Superchain ecosystem actually mean? Would Horizen builders be able to lean on broader OP grants like retroactive funding? Would they be eligible for Base’s (albeit limited) small builder grants, etc.? Is there a list of applications that would be inherited from Base (i.e. Aerodome?), these are things that helped immensely in terms of ApeChain in the Arbitrum ecosystem so would want to see similar commitments here!

• Can you expound on the modular architecture? Would Horizen have its choice of VMs for example (like Degen, would it be able to implement a Rust/C++ compatible VM like Stylus)? It sounds like yes (which is great obviously). What controls are there over protocol level decisions (gas token, fees, sequencing times, etc)?

• Interested in what makes the case studies referenced successful in your mind. Overall I think it really points to this being a new ecosystem, which comes with both high reward potential and high risk potential. Degen has been beset by issues w/ their RaaS provider, bridging problems, liquidity, etc while B3 is a bit too new to make a determination on, but my hunch is will be more successful. If it’s in relation to timeline and estimated costs and reduced infra, faster development times, etc. then I definitely think the educated hunch is right, but interested in any lessons learned or any concerns.

• Are there other benefits to joining the Base ecosystem re: Coinbase? Is there a commitment to have Day 1 on/off-ramping from the CEX? Listing of new projects?

[blockops]

there is less need for node operators, lowering the costs to run the Horizen protocol

[blockops]

yes, the gas token for Base is ETH. It is possible to design Horizen on Base for ZEN to be the gas token.

ZEN started out as very centralized, and moved toward decentralization.

For projects like Base to thrive long term they need to become more decentralized. I expect them to do this as they proceed and grow