LayerZero Protocol: The Inexorable Rise of Omni-chain NFTs

2022-05-06, 10:34

1. LayerZero is a Omni-chain interoperability protocol, which will be used as the message transmission layer to realize the communication of smart contracts between almost all blockchains.

2. On March 31, LayerZero Labs announced that it had completed the round A + financing of $135 million, which was led by a16z, FTX Ventures, Sequoia Capital, Paypal Ventures, Uniswap Labs and other investors.

3. When assets are transferred from one blockchain to another, they need to be locked on the cross-chain bridge first, and then mint the same number of tokens on the other chain according to the smart contract.

4. LayerZero Protocol adopts the "ultra-light node" mode, and the repeater and oracle jointly complete the information transmission, with low cost and high security.

In recent weeks, omni-chain NFTs have become a hot topic in the crypto community. The inexorable rise of the concept of omni-chain NFTs is inseparable from LayerZero Protocol. Compared with the "multi-chain" claimed by traditional cross-chain projects, LayerZero goes further on this basis and needs to realize "omni-chain".

What is LayerZero

With the development of the whole blockchain industry, many different public chains with their own ecosystem have emerged. Because these public chains are not interoperable, the cross-chain bridge has become the only channel for public chains to communicate and exchange value. Cross-chain bridge is extremely important for the whole blockchain system, and it locks in great value. However, the cross-chain bridge itself is not safe, and it is difficult to completely avoid vulnerabilities in design, which has become a weakness of the blockchain network and coveted by many hackers. The amount of theft events on the cross-chain bridge is constantly refreshed, and all kinds of security events emerge endlessly. LayerZero was born to solve the contradiction of cross-chain bridges.

Specifically, LayerZero is an omnichain interoperability protocol. The protocol, launched by Canadian team LayerZero Labs, will serve as a message transport layer to realize the communication of smart contracts between almost all blockchains. At the beginning of the project planning, LayerZero was only prepared to support projects compatible with Ethereum virtual machines (EVM), including Ethereum, Polygon, Arbitrum, Optimism and Avalanche. However, according to Bryan Pellegrino, co-founder and CEO of LayerZero Labs, the project will complete support for non-EVM projects such as Solana and Terra within four weeks. In the end, LayerZero's goal will be to "connect every smart contract on each blockchain".

On March 15, the main network of the project was officially launched, and the first cross-chain bridge application StarGate was launched. On March 31, LayerZero Labs announced that it had completed the round A + financing of $135 million, which was led by a16z, FTX Ventures, Sequoia Capital, PayPal Ventures, Uniswap Labs and other investors. After the completion of financing, the project valuation reached $1 billion.

New cross-chain industry standards

According to the principle of traditional cross-chain bridge, when assets are transferred from one blockchain to another blockchain, they need to be locked on the cross-chain bridge first, and then mint the same number of tokens on the other chain according to the smart contract. This process is complex, expensive and unsafe, which also explains why the TVL on the cross-chain bridge is so large and vulnerable to hacker attacks. Generally speaking, the information communication in the cross-chain scheme adopts two modes: intermediate chain or on-chain light node. In the intermediate chain mode, the intermediate chain is responsible for receiving, validating and forwarding the information between the chains. This mode has low cost, but it is not safe enough. As the intermediate chain has advanced authority, once the intermediate chain is hacked, all assets will be at risk. Relatively speaking, the light node mode in the chain is really safe. The light node needs to accept and validate all the blocks of the original chain to confirm the transaction information and realize reliable cross-chains. However, the cost of this mode is extremely high.

Different from the traditional cross-chain scheme, LayerZero Protocol adopts a unique "ultra-light node" mode, which has both low cost and security. In this mode, the information transfer between blockchains is jointly completed by the relayer and oracle. Similar to the on-chain light node, the ultra-light node will also validate the block information, but the block information is allocated by the oracle on demand. Specifically, oracle will send the block information to the target chain, while the relayer is responsible for submitting the transaction certificate and validating it on the target chain. If you want to use LayerZero, you just need to pay gas fees once on the original chain of cross-chain.

Image：LayerZero White Paper

In the meanwhile, by splitting the responsibility of information transmission, LayerZero has better security performance, because only when the oracle and relayer are hacked simultaneously, the system will really be in danger. Compared with the cross-chain "bridge" of two-way flow of assets and information, LayerZero may realize the simultaneous communication of multiple chains. This is why the project calls itself a "omni-chain cross-chain agreement" rather than a "cross-chain bridge". The project also has the ambition to become a cross-chain industry standard.

For example, SushiSwap is deployed on more than ten blockchains simultaneously. Presently, it is deployed separately on each chain, and it was not interoperable before. In order to achieve interoperability with each other, according to the previous cross-chain standards, it needs to be synchronized through more than ten cross-chain bridges. If it is based on LayerZero, it can be deployed on all blockchains simultaneously without managing complex cross-chain bridges.

Gh0stly Gh0sts: omni-chain NFTs are coming overwhelmingly

Image: Opensea

Based on the powerful cross-chain capability provided by LayerZero, the first omni-chain NFT series Gh0stly Gh0sts was officially released on April 4. The NFT series includes 7710 ghost avatars, and supports seven blockchains including Ethereum, Polygon, Arbitrum, Optimism, BSC, Avalanche and Fantom. Through smart contracts, these ghosts can shuttle freely between blockchains.

Image: Opensea

The cross-chain characteristics of these NFTs can be reflected by image features. The background color of the image represents the chain on which the NFT is minted. For example, gray refers to Ethereum, red refers to Avalanche and purple refers to Fantom. The border color of the image indicates which blockchain the NFT is on. The NFTs in the above image are all on Ethereum because the trading marketplace is OpenSea.

Conclusion

The emergence of cross-chain NFTs has created infinite imagination space for us. Gh0stly Gh0sts is an interesting attempt. NFTs are important infrastructures of the metaverse, and the future metaverse must be characterized by multi-chain interconnection and interoperability. In future blog posts, we will explain many existing cross-chain mechanisms in detail. Please stay tuned!

Author: Gate.io Researcher: Edward H. Translator: Joy Z.
* This article represents only the views of the researcher and does not constitute any investment advice.
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