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Interconnection is a rigid need that has not been resolved

Only by opening up the interoperability between various blockchains can the full circulation of data and assets be realized, and the interoperability of the whole chain (Omnichain) can be solved to make super applications more likely to appear.

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Full chain interoperability is the new paradigm of interconnection

When there was no cross-chain protocol at the earliest, if users needed to cross-chain assets, they needed to use a centralized exchange to complete asset conversion on the centralized exchange and then withdraw coins to the target chain. In this way, the intermediate operations are complicated, the loss of handling fees is high, and the efficiency is low. Moreover, it only involves cross-chain assets and does not involve cross-chain messages.

Currently, there are two main types of blockchain interoperability solutions that simultaneously realize asset cross-chain and message cross-chain:

1. Trusted repeater: This scheme sends transactions through the source chain, the relay chain verifies the transaction and reaches a consensus, and finally sends the transaction to the target chain;

2. Light node mode: This scheme is to deploy the light nodes of the other chain between the two chains, and synchronize the complete block header of the other chain with each other, so that the transactions of the other chain can be verified.

The first solution is not decentralized enough, and the final result is often not an open cross-chain ecology, but a new closed ecology, and there is still a risk of being attacked by a single point; the second solution is too costly, such as in Ethereum To run a light node on the chain, each target chain will cost a lot of money every day.

Aiming at the development status of blockchain interoperability, Layerzero proposes a new solution:

Through the ultra-light node model, Layerzero makes local cross-chain transactions possible.

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How Layerzero achieves full-chain interoperability

Layerzero is an Omnichain interoperability protocol. Layerzero has built a new ultra-light node model to provide a safe and reliable infrastructure for various cross-chain protocols.

Layerzero is equivalent to an ultra-light node running the entire chain. Layerzero relies on Oracle and Relayer to transmit information between Layerzero Endpoints on different chains. Oracle transmits block headers (block headers contain transaction information, message m, etc.), and Relayer transmits transactions Proof (Proof information), mutual verification to ensure security.

The following figure shows the flow of the user application (UA, User Application) on Chain A sending a message to the user application on Chain B through Layerzero:

1、Endpoint：Layerzero consists of three core components: Endpoint, Oracle, and Relayer. in:

2、Oracle：Responsible for direct interaction with users or applications, the User Application is presented on the user side. Endpoint can be understood as consisting of a series of smart contracts, one deployed on each chain. Endpoint specifically includes 3 modules - Communicator (communicator), Validator (validator), Network (network);

3、Relayer：The repeater is responsible for obtaining and transmitting the Proof information of the specified transaction. At present, Layerzero provides the relayer service, and in the future, specific business parties can perform the role of relayer. Relayer can earn most of the cross-chain fees.

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Full-chain interoperability based on Layerzero has many advantages

Omnichain interoperability has outstanding advantages over interoperability achieved by cross-chain protocols. In addition to the security and low-cost results due to different solutions, cross-chain protocols and full-chain applications based on Layerzero also have many benefits for the application layer protocol itself.

Application layer protocols can focus more on their own business development. Applications based on Layerzero can be less concerned about the development prospects of the underlying public chain, and more focused on developing the business of the project itself. When there are more and more applications of Omnichain, it may even change the status quo of "fat protocols and thin applications" that has always existed in the industry to a certain extent, enabling more entrepreneurial teams to develop Omnichains that attract a large number of users. Application layer products.

Omnichain global state sharing can be realized. Previous application layer protocols, if they exist on multiple chains, are actually running isolated applications. Let me give you an example: If Uniswap is deployed on three chains, according to the general cross-chain scheme, a bridge needs to be deployed between every two chains, then three bridges are needed on the three chains, then you need to write The code for the three bridges will end up with 3 independent interfaces and 3 different security properties. If it needs to be deployed on more chains, the workload will be even greater. But with Layerzero, there only needs to be a single interface and codebase for all cross-chain pairs.

The bridging of unified liquidity can be realized. The capital efficiency of general bridging protocols is very low. Still take the deployment of Uniswap on 3 chains as an example: according to the general cross-chain scheme, 3 bridges are required, and these 3 bridges are on each source chain and target chain. There needs to be 1 pool, so 6 pools are needed, each pool needs to be filled with liquidity, and the capital efficiency is very low; but if you do this based on layerzero, you only need to build a bridge, on each chain you only need 1 pool. Under the same capital situation, the depth of the pool can be more guaranteed, and the capital efficiency is higher.

• Based on the full-chain interoperability of Layerzero, it can run through many businesses that were not easy to achieve in the past, such as:

• Full-chain cross-chain bridge;

• Cross-chain transactions;

• Full chain revenue aggregator;

• Cross-chain lending;

• Full-chain Token/Full-chain NFT;

……

In short, in solving the isolated island problem of the blockchain, Layerzero has achieved dimensionality reduction with Omnichain thinking.

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Layerzero's ecological development status

Layerzero has been established for less than two years, and the mainnet has been launched for three or four months, but it has already achieved very good results.

In terms of platform data, the mainnet has reached a TVL of US$4.4 billion within two weeks of its launch, and a transaction volume of billions of US dollars.

In terms of ecological development, more than 700 smart contracts have been deployed on Layerzero during the testnet period. As of August, more than 4,300 smart contracts have been deployed, of which more than 600 are very active.

In terms of blockchain coverage, Layerzero is an absolute leader and explorer on the road to Omnichain. Initially, it only supported 7 EVM-compatible chains (including Layer1 and Layer2 chains), and now it has begun to expand to non-EVM public chains such as Solana, Aptos, and SUI, and plans to cover most of the leading Layer1 and Layer2 chains in the industry.

Layerzero not only has beautiful data, but the top projects in its ecology are also developing very well. for example:

1. Full-chain cross-chain bridge Stargate

Stargate is a Layerzero-based full-chain cross-chain bridge, mainly focusing on cross-chain assets of USDC, USDT and ETH, with unified liquidity and fast transaction finality.

At the beginning of its launch, it had a TVL of 4 billion U.S. dollars, and it still maintains a TVL of 590 million U.S. dollars. It has received investment from many first-line institutions such as FTX, A16Z, Sequoia, Binance, and Coinbase. When FTX was doing IEO, its valuation was as high as 1 billion U.S. dollars. A demonstration ecological project based on the Layerzero full-chain interoperability protocol by the founding team of Layerzero.

2. Cross-chain DEX Hashflow

Hashflow is a Layerzero-based bridgeless cross-chain transaction service. Up to now, the total transaction volume has exceeded 9 billion US dollars, and the transaction volume in the last 24 hours has reached 23.6 million US dollars, with 1335 daily active users. Hashflow announced its Series A funding round late last month, raising $25 million at a valuation of $400 million.

Most notably, Hashflow can help professional market makers better manage liquidity pools by using the RFQ model, and it also has MEV protection.

3. Full chain NFT Gh0stly Gh0sts

Launched on April 4th, Gh0stly Gh0sts is the first Layerzero-based full-chain NFT set, and quickly attracted widespread market attention with its Free mint and Omnichain features.

Since Gh0stly Gh0sts launched Omnichain NFT based on Layerzero with great success, Holograph, Tiny donos, Yakuza Pandas, etc. launched Omnichain NFT based on Layerzero.

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The development prospect of Layerzero and Omnichain

Finally, regarding the development prospects of Layerzero and Omnichain, we quote the views of Wang Xi, partner of Bixin Ventures, and Zi, partner of NGC Ventures:

"Layerzero will become the industry standard for the whole chain and cross-chain in the future, and become the definition of the whole chain. As an important infrastructure for the development of the web3 industry, it will make outstanding contributions to the great development of the industry. Like excellent companies such as Tesla Like La/DJI drones, Layerzero is also a company that defines a sub-industry and a big track.”

——Wang Xi, Partner of Bixin Ventures

——NGC Ventures, Zi

"Although there are many cross-chain bridges and applications at present, the experience is still fragmented. The real target user experience of Layerzero's Omnichain is to make users no longer perceive the existence of cross-chains, and at the same time seamlessly manage all assets. to interact."

"Layerzero defines a new standard for Omnichain interconnection and will become an Omnichain infrastructure with a very strong network effect. It has long-term value in the blockchain industry and fits well with our long-term investment thinking."