Published
9 months ago on
July 26, 2023
Table of Contents
Bridge Protocol LayerZero has revealed that it has achieved a significant landmark, crossing 50 million cross-chain messages.
The landmark shows the surging demand among users in the crypto space to conduct cross-chain token swaps and transfer liquidity between different chains.
What Is LayerZero?
Interoperability issues have plagued the blockchain ecosystem. For seamless interoperability between blockchains, projects must implement standardized data formats, secure communication channels, common consensus mechanisms, and secure, scalable interoperability protocols. This is where LayerZero comes into the picture. LayerZero is a cross-chain communication protocol that facilitates trustless, direct communication between different blockchains, supporting prominent players such as Solana, Aptos, SUI, EVM Chains, and others.
The communication protocol could potentially revolutionize how blockchains interact with one another, eliminating the need for intermediaries such as bridges and facilitating direct communication instead.
LayerZero’s Unique Approach
LayerZero uses a unique approach called Ultra Light Nodes (ULNs) to facilitate interoperability. Ultra Light Nodes are essentially lightweight blockchain clients that can validate transactions on other chains without requiring them to download the entire blockchain state. This allows LayerZero to achieve a significantly high throughput, along with low latency during inter-chain communication with blockchains that have different architectures and consensus mechanisms.
The Ultra Light Nodes are deployed on chains that wish to communicate with one another and maintain a partial view of the chain they are deployed on, which is then used to validate transactions. Relayers, a type of off-chain service, are responsible for relaying messages between ULNs on different chains. As an incentive, relayers are adequately compensated for each message they transmit between chains. Oracles, another third-party service, are used to pass on the block header to the target chain’s endpoint, following which the transaction proof is submitted. Once submitted, the destination chain validates the proof using its consensus mechanism.
The 50 Million Milestone
LayerZero crossed the 50 million messages milestone for messages between blockchains on Tuesday. The landmark achievement highlights the high demand among users in the crypto space to conduct cross-chain token swaps and liquidity transfers between chains, despite several vulnerabilities and risks. This is because data from Chainalysis has shown that bridge exploits accounted for over $2 billion in stolen assets in 2022 alone.
The news also comes just three months after LayerZero Labs, the entity behind LayerZero raised $120 million in capital from over 33 backers. The list of backers included prominent names such as auction house Christies’ Sequoia Capital, Samsung Next, and Andreessen Horowitz. The Series B funding round was done at a valuation of $3 billion, nearly tripling its valuation from its $135 million round, held in March 2022. Other backers in the latest funding round included OpenSea Ventures, Circle Ventures, and BOND.
The funding round also marked a rare funding deal in a prolonged crypto bear market that has seen funding dry to a crisp. Co-founder and CEO of LayerZero Labs stated,
“LayerZero is to blockchains what the internet was to computing clusters. LayerZero allows chains not only to build bridges (to transfer assets/value between them) but send and execute arbitrary data just like a packet on the internet. What this means is that you can now build applications that are orders of magnitude more complex than existing applications and do so with a completely seamless experience between chains.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Investment Disclaimer
