Key Takeaways:
- LayerZero enables seamless and secure cross-chain transactions, promoting interoperability across various blockchain networks.
- The protocol uses Ultra Light Nodes, oracles, and relayers to ensure authentic and guaranteed message delivery.
- LayerZero connects over 70 mainnet blockchains, including Ethereum and Avalanche, supporting large-scale applications like cross-chain decentralised exchanges (DEXs) and lending platforms.
- The ZRO token facilitates payment for transaction fees and governance participation, and may earn staking rewards and potentially increase eligibility for future airdrops.
- Purchasing ZRO tokens can be easily achieved via the Crypto.com App, allowing users to fund accounts with multiple fiat currencies.
What Is LayerZero?
LayerZero, self-described as an omnichain, is an innovative blockchain protocol designed to enable seamless and secure cross-chain transactions. According to its white paper, “LayerZero is the first system to trustlessly enable direct transactions across two chains.” It was created by Caleb Banister, Bryan Pellegrino, and Ryan Zarick with the aim to provide a foundational layer for authentic and guaranteed message delivery across different blockchain networks, promoting interoperability and communication between decentralised applications (dapps).
The LayerZero protocol went live in March 2022, and has since launched on various blockchains, including:
It currently connects 70-plus chains, an achievement that has gained the project investments from companies like Samsung.
This extensive integration across diverse blockchain networks underscores LayerZero’s commitment to providing a foundational infrastructure for communication between them, thereby fostering interoperability and enabling the creation of omnichain applications that can communicate and transact across multiple chains from a unified interface.
How Does LayerZero Work?
LayerZero operates as a groundbreaking interoperability protocol that enables seamless communication between different blockchains without compromising security or decentralisation. It employs an ‘Ultra Light Node’ (ULN), as well as oracles and relayers, to securely transfer messages between chains.
A light node in blockchain technology refers to a type of node that does not store the entire blockchain history, but instead maintains only the necessary data to validate transactions and blocks. Ultra Light Nodes for LayerZero introduce a new model for blockchains, minus the hefty cost of running light nodes, and are more secure than running a sidechain-based model.
What Are ULNs?
The Ultra Light Nodes (ULNs) are integral components of LayerZero’s interoperability protocol, serving as mini validator nodes on the destination blockchain. They handle the reception of data from a source chain and integrate it into the destination chain, hence facilitating cross-chain communication.
ULNs operate similarly to traditional light nodes, but optimise cost-effectiveness by packaging and sending multiple transactions at once upon the destination chain’s request. This minimises the computational resources required for transactions, while maintaining a high level of security akin to on-chain light nodes.
ULNs ensure that the majority of the system remains unharmed in the event of exploitation, providing enhanced security and minimising potential losses.
What Are Decentralised Oracles?
Decentralised oracles bridge the gap between the Web3 and Web2 realms, facilitating communication between decentralised systems, dapps, and the external world. They create data feeds and seamlessly integrate them into the target system for easy utilisation and play a crucial role in ensuring the security and reliability of cross-chain data exchange.
LayerZero’s modular approach allows developers to choose preferred oracles, including Chainlink, Band, and Google Cloud, for example. LayerZero utilises external services like oracles and relayers to facilitate the exchange of messages between blockchains. Oracles provide a mechanism for reading block headers from one chain and sending them to another, while relayers fetch the proof for a specified transaction — both working independently to ensure message validity.
Learn more about Layer-0 blockchains.
Cross-Chain Transactions With LayerZero and Use Cases
By directly connecting over 70 mainnet blockchains, including Ethereum, Avalanche, and Polygon, LayerZero enables various large-scale applications to communicate, as well as cross-chain decentralised exchanges, multi-chain yield aggregators, and cross-chain lending.
This allows users to freely move liquidity between blockchains without the need for third-party systems.
Security
LayerZero ensures secure message delivery with a simple and effective design with few fault points, plus risk sharding through various oracle/relayer combinations and mitigating potential risks and enhancing the security of cross-chain transactions — all of which make attacks inefficient for hackers.
LayerZero’s innovative approach to cross-chain interoperability offers a promising solution to the challenges posed by the isolation of different blockchains, making it easier to exchange assets and use different applications across multiple blockchains.
What Is the ZRO Token Used For?
The ZRO token plays a key role in the LayerZero ecosystem, offering various utilities and benefits for token holders. The token distribution model includes allocations for the development team, validators, community incentives, and public sales.
Below is a breakdown of its key utilities and functions within the LayerZero platform:
- Transaction Fees
ZRO token facilitates payments for cross-chain transaction fees and other services within the LayerZero ecosystem. It also provides reward mechanisms for validators and other network participants to maintain the protocol’s security and efficiency.
- Governance Participation
ZRO allows token holders to actively participate in governance proposals, including decisions on upgrades, integrations, and other significant changes, influencing the future development and policies of the LayerZero protocol.
- Staking Rewards
Users can stake their ZRO tokens to potentially earn rewards, incentivising long-term holding and active participation in the ecosystem.
- Airdrop Eligibility
Engaging with LayerZero projects and holding ZRO tokens may increase eligibility for future airdrops, offering additional tokens or benefits.
How to Buy LayerZero
Opening a position in LayerZero (ZRO) is easy using the Crypto.com App, which offers over 250 cryptocurrencies, from meme coins like Dogecoin and Shiba Inu to Bitcoin, Ethereum, Solana, and Ripple. Fund an account with one of over 20 fiat currencies like USD, GBP, and EUR.
Just follow these simple steps:
- Download the Crypto.com App, available free on the Apple App Store or Google Play Store.
- Complete the simple sign-up process.
- Fund the account using bank transfer, Apple Pay, or a debit/credit card. Allow 1–3 business days for bank transfers.
- Once funds hit the account, start buying ZRO.
Conclusion
LayerZero represents a significant advancement in blockchain technology, addressing the critical challenge of cross-chain interoperability. By enabling secure and efficient communication between different blockchains, LayerZero fosters the creation of omnichain applications, enhancing the overall functionality and user experience across decentralised platforms.
Its innovative use of Ultra Light Nodes and decentralised oracles ensures that message delivery between chains remains secure and reliable without compromising decentralisation. The extensive integration of LayerZero across multiple blockchains, including Ethereum, Avalanche, and Polygon, highlights its commitment to providing foundational infrastructure for cross-chain communication.
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