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LayerZero

LayerZero is a cross-chain interoperability platform that enables developers to create (dApps) that work seamlessly across multiple through a straightforward and uncomplicated interface. [1][3]

Overview

LayerZero was founded by Caleb Banister, Bryan Pellegrino, and Ryan Zarick in 2021 and is headquartered in Vancouver, British Columbia, Canada. [2]

LayerZero aims to ensure valid delivery by utilizing a system that operates based on the independence of the and Relayer, allowing for a light and efficient system. The protocol ensures delivery of a message only if the transaction proof can be validated through a validation step that succeeds if the block header and proof match. This reduces the possibility of collusion between the Oracle and Relayer and guarantees valid delivery to the user application. LayerZero is unique in its ability to provide trustless valid delivery and is a promising solution for cross-chain messaging. [4]

With LayerZero, developers have the ability to convert their dApps into multi-chain applications by using on-chain Ultra Light Nodes, a combination of the security offered by light nodes and the affordability of middle chains. [5]

Ultra-Light Node

Ultra Light Node (ULN) is a novel approach to cross-chain bridging and messaging. ULN combines the security of on-chain light nodes with the cost-effectiveness of middle chains. On-chain light nodes receive and validate every block header for each pairwise chain on the opposing chain, making it the most secure way to transmit messages between chains, but it comes with a high cost. Middle chains, on the other hand, are less secure but more cost-effective. [5]

ULN solves this dilemma by performing the same validation as an on-chain light node, but instead of keeping all block headers sequentially, block headers are streamed on demand by decentralized oracles. This eliminates the need for a node to store every block header, reducing the storage and computational overhead, making it a more cost-effective solution. The oracles are incentivized to provide accurate and reliable block headers, ensuring the security of the messages transmitted between chains. [5]

Infrastructure of LayerZero

Endpoints

LayerZero Endpoints are the main access point for users to interact with the LayerZero protocol. They are implemented as a series of on-chain for each chain in the LayerZero network. The purpose of these endpoints is to facilitate the sending of messages using the LayerZero protocol and to ensure valid delivery.

Endpoint Modules

A LayerZero Endpoint is divided into four modules: Communicator, Validator, Network, and Libraries. The Communicator, Validator, and Network modules make up the core functionality of the endpoint, while new chains are added as additional Libraries. This design allows for easy support of new chains without modifying the core modules. [4]

The Oracle

The Oracle is a third-party service that reads block headers from one chain and sends it to another chain, independently of other LayerZero components. This service is provided by , the current industry leader in decentralized oracle networks. [4][6]

The Relayer

The Relayer is an off-chain service that functions similarly to the Oracle but instead of fetching block headers, it fetches the proof for a specified transaction. The LayerZero protocol does not require a specific implementation for the Relayer, and users are free to implement their own service. To ensure valid delivery, the Oracle and Relayer must be independent of each other to prevent any potential collusion. In practice, LayerZero provides the Relayer service while the Oracle is handled by the Chainlink decentralized oracle network and associated consensus mechanisms. [4]

Utility

LayerZero is a infrastructure that provides a range of utilities to developers and users. Its key features include a cross-chain , multi-chain yield aggregator, and multi-chain lending. These utilities allow for seamless transfer of native assets across different chains, access to high yield opportunities, and cost-efficient lending options. [4]

Cross-Chain Decentralized Exchange

LayerZero facilitates a cross-chain decentralized exchange (DEX) that operates solely with native assets. Unlike traditional DEX designs that use wrapped tokens or go through intermediary sidechains, LayerZero enables DEXs that have on both chains, allowing users to deposit their native assets on one chain and withdraw native assets from another. With LayerZero's messaging capabilities, direct bridges, automated market making, and other pricing models can be implemented. [4]

Multi-Chain Yield Aggregator

When using LayerZero for cross-chain transactions, a multi-chain yield aggregator would be able to tap into the high yield opportunities across multiple ecosystems, maximizing access to high-yield opportunities and allowing users to take advantage of market inefficiencies. This would be an improvement over single-chain yield aggregators that restricts their access to yield opportunities outside of their current ecosystem, and instead would provide more yield opportunities to choose from. [4]

Multi-Chain Lending

Multi-chain lending on LayerZero allows users to take advantage of opportunities on different chains while keeping their assets consolidated on their preferred chain. Through a lending protocol, users can lend their assets on their preferred chain and borrow the desired asset directly on another chain, eliminating the need for costly intermediary steps like bridge and swap fees. [4]

Funding

On April 1st 2021, LayerZero raised $2 million as their first ever seed funding round. [2][10]

On September 16th 2021, LayerZero's series A funding round, led by and Multicoin Capital, raised a total of $6 million. Additional investors included, Sino Global Capital, Defiance, Delphi Digital, Robot Ventures, Spartan, Hypersphere Ventures, Protocol Ventures, Gen Block Capital and Echelon Capital. [2][7]

On March 20th 2022, LayerZero's series B funding round was led by , and Sequoia, raising $135 million. Some of the main investors included, Ventures, PayPal Ventures, Tiger Global and Labs. [8][9]

Pudgy Penguins

On January 26, 2023, , a hand-drawn, penguin NFT collection project partnered with LayerZero to allow the transfer of their NFT across different chains. Pudgy Penguins chose to work with , , and due to their growing usage and exposure. Polygon was selected for its ability to attract new users to the community, BSC was chosen for its low gas fees and commitment to inclusivity, and Arbitrum was chosen for its suitability for DeFi development.
By bridging Pudgy Penguins NFTs to any of the chosen chains, users will receive a SoulBound token as a commemorative souvenir tied to their wallet. This partnership between Pudgy Penguins and LayerZero enables the project to achieve its goal of making it easy for new Web3 users to become part of the ecosystem without worrying about high gas fees, offering both "provenance and user experience". [14][15]

wiki

Team

Leadership Team

  • Head of Research: Daniel P. Ahn
  • Head of Strategy: Max Glassman
  • Head of Talent: Richard Dietrich[11]

Executive Team

  • Co-Founder and CEO: Bryan Pellegrino
  • Co-Founder and CTO: Ryan Zarick
  • COO: Ari Litan[12]

Board of Directors

  • Angel Investor: Rob Sadow[13]

LayerZero V2

On January 29, 2024, the LayerZero V2 went live. The update includes Decentralized Verification Networks (DVNs), which replace the V1 Oracle and allow any entity capable of verifying cross-chain data packets to join LayerZero, promoting decentralization. Adapters for Axelar and CCIP DVNs are available on testnet and will be on mainnet at launch, with additional adapters planned for 2024 to support various native bridges, third-party bridges, middle chains, oracles, and other verification methods, preventing vendor lock-in. The X of Y of N Verification feature provides a modular approach, enabling applications to customize their security by choosing a combination of DVNs, thus optimizing costs and security levels based on specific needs. [16]

Permissionless Execution introduces Executors, a new role that handles execution on the destination chain separately from verification, simplifying gas payments and offering customizable gas settings. Each application must configure a Security Stack comprising DVNs, Executors, chain confirmations, MessageLibraries, and chain pathways, granting full control over security settings. Increased throughput is achieved by offering lazy or strict nonce enforcement options, allowing developers to choose between in-order or out-of-order transaction execution, thereby aligning LayerZero’s throughput with the destination chain’s while maintaining censorship resistance. [16]

Enhanced programmability is facilitated by improved protocol contract interfaces, path-specific libraries, new design patterns, and horizontal composability, fostering flexibility and uninterrupted cross-chain transactions. Unified semantics ensure that applications function uniformly across all blockchains with LayerZero endpoints, including non-EVM chains. Finally, the V2 launch supports both forward and backward compatibility, aiding teams currently building on V1. [16]

LayerZero Airdrop

On June 14, 2024, the LayerZero team introduced the 'LayerZero Foundation'[17] and also, Bryan Pellegrino, the CEO of LayerZero Labs released his calculations on the ZRO token in a tweet on X;

Ok let's talk some numbers.
23.8% of the supply is going directly to the community and builders. This does not include foundation, growth, etc. Directly to community. 8.5% of this is being distributed day 1 (5% core, 3% RFP, 0.5% community pool) The majority of the remainder will be given over the next 36 months with additional retroactive distribution every 12 months, along with some forward looking RFPs for builders.... - he tweeted on June 14, 2024[18]

Per the tweet, ZRO has a supply of 1 billion of which 23.8% is reserved for allocation to community and builders. 23.8% excludes foundation, growth, and other heads. 8.5% of the tokens allocated to the community and builders will be distributed on the first day of the airdrop, the rest of the tokens will be allocated within three years. The project plans an additional allocation every 12 months, and some forward-looking Request for Proposals (RFPs) will be provided for builders in the ecosystem. [19]

LayerZero Labs also mentioned June 20 as the airdrop date for the token while asking users to determine their eligibility status via the official website [20]

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LayerZero

Commit Info

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Edited On

July 14, 2024

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