Multichain strategy has now become essential. Blockchain, Dapp, and token projects should expand beyond their home chains to reach more users and access liquidity. One of the most common approaches is using “Token Framework” built on top of cross-chain messaging protocols, which enables token transfers and management across blockchains.
In this article, we’ll explore the current landscape, focusing on leading token framework OFT by LayerZero, and examine what the future holds for this sector.
Token standards are designed specifically for their respective blockchains. Standards like ERC20, SPL20, CW20, and Sui Coin each have features tied to their native chain. For example, Sui Coin lacks an approve function, and although tokens can have different object IDs, they maintain their fungibility. Since these standards are confined to a single blockchain, challenges arise in managing liquidity and wrapped token versions when third-party bridges move tokens to chains.
Projects are adopting token frameworks primarily for two major benefits:
OFT (Omnichain Fungible Token) by LayerZero is the most adopted token framework in the current token framework market.
This standard enables transfer of fungible tokens across multiple blockchains without asset wrapping. It works by burning tokens on the source chain when a cross-chain transfer is initiated, then sending a message via LayerZero’s protocol to mint an equivalent amount on the destination chain. This mechanism ensures a unified token supply across all supported networks.
Source: LayerZero V2 OFT Quickstart | LayerZero
OFT can be customized in two ways to be more “Protocol-Aligned.” First is to use OFT Adapter: This adapter works as an intermediary contract for existing ERC20 tokens. So for existing tokens, it can expand their tokens to other blockchains without burning their token, rather locking and having them minted.
Source: LayerZero V2 OFT Quickstart | LayerZero
Another way is to customize the configuration of verifiers (DVNs) and executors, which each play roles in the cross-chain message verification and execution. Recent Ondo Finance’s case is a good example. Ondo Finance and LayerZero have created a bridging system that meets institutional standards. The system uses multiple DVNs to verify messages. These collective of DVNs include Polyhedra’s zkBridge, Axelar, LayerZero Labs’ general DVNs, and Ondo’s custom DVN — creating an environment that aligns with Ondo Finance and prevents single points of failure.
The bridge is now operational, enabling users to transfer Ondo’s USDY tokens with no slippage between Ethereum, Arbitrum, and Mantle networks, with future blockchain integrations planned.
Source: Setting a New Standard for Institutional-Grade Bridging with LayerZero
The adoption of OFT has gained significant traction across various token categories. OFT adoption is highest among these token types:
Also another notable trend is having the chain’s native gas token as OFT, for example APE, VANA, BTCN. This means that the chain itself can run the LayerZero infrastructure, DVN, to serve as the gateway for the token transfer. For example, the APE token is secured by Horizen Labs, the developer of Apechain. This means that the operator of the chain secures how the native APE token comes in and out. This provides an additional security layer for chains to have a native bridge embedded in the chain.
Extending the scenario above, let’s think about runningSui native bridgewith LayerZero, which is secured by Sui validators and connects with Ethereum. This native bridge enables secure asset transfers from Ethereum to Sui through chain validator verification. If some Sui validators were to participate as a LayerZero DVN for their chain, they could establish connections with other blockchains. This would enable Sui to connect with established chains like Solana and Arbitrum, as well as upcoming chains such as Initia, Berachain, Sonic, and Abstract from launch. This would allow OFT tokens to be available in the Sui ecosystem, which would be secured by Sui validators.
Source: LayerZero OFTs
The rationale for using multichain tokens is clear. With low integration costs, they can be used across different blockchains. However, the direct use cases are limited when leveraging just the token framework. For example, if I want to hold ENA in Solana and stake it for points, this requires separate OApp logic to support it. Without specific implementation, the token simply exists as a pure token in different blockchains.
For token issuers, I believe the adoption of token frameworks will evolve in three steps:
Token Framework has stood out as one of the largest use cases for cross-chain messaging, and this led most messaging protocols to develop their own token frameworks. Major frameworks include OFT by LayerZero, ITS by Axelar, NTT by Wormhole, Warp Token by Hyperlane, and CCT by Chainlink. Additionally, messaging-agnostic frameworks like xERC20 and ecosystem-specific tokens like superchainERC20 by Optimism are emerging. Among these, OFT currently leads in both total value secured and project adoption.
Three key factors will determine success in token framework development as competition intensifies:
In this competitive landscape, LayerZero has been the one that had its token framework since 2022, and most of the others were shipped in 2024. So the first-mover advantage, no hacks, and its quick market adoption had put OFT as the leader in this position.
So, “Just OFT it?” For now, yes. But as others are still in an early stage of production, looking into how they will ship in the market would be important to track.
Related Articles, News, Tweets etc. :
Multichain strategy has now become essential. Blockchain, Dapp, and token projects should expand beyond their home chains to reach more users and access liquidity. One of the most common approaches is using “Token Framework” built on top of cross-chain messaging protocols, which enables token transfers and management across blockchains.
In this article, we’ll explore the current landscape, focusing on leading token framework OFT by LayerZero, and examine what the future holds for this sector.
Token standards are designed specifically for their respective blockchains. Standards like ERC20, SPL20, CW20, and Sui Coin each have features tied to their native chain. For example, Sui Coin lacks an approve function, and although tokens can have different object IDs, they maintain their fungibility. Since these standards are confined to a single blockchain, challenges arise in managing liquidity and wrapped token versions when third-party bridges move tokens to chains.
Projects are adopting token frameworks primarily for two major benefits:
OFT (Omnichain Fungible Token) by LayerZero is the most adopted token framework in the current token framework market.
This standard enables transfer of fungible tokens across multiple blockchains without asset wrapping. It works by burning tokens on the source chain when a cross-chain transfer is initiated, then sending a message via LayerZero’s protocol to mint an equivalent amount on the destination chain. This mechanism ensures a unified token supply across all supported networks.
Source: LayerZero V2 OFT Quickstart | LayerZero
OFT can be customized in two ways to be more “Protocol-Aligned.” First is to use OFT Adapter: This adapter works as an intermediary contract for existing ERC20 tokens. So for existing tokens, it can expand their tokens to other blockchains without burning their token, rather locking and having them minted.
Source: LayerZero V2 OFT Quickstart | LayerZero
Another way is to customize the configuration of verifiers (DVNs) and executors, which each play roles in the cross-chain message verification and execution. Recent Ondo Finance’s case is a good example. Ondo Finance and LayerZero have created a bridging system that meets institutional standards. The system uses multiple DVNs to verify messages. These collective of DVNs include Polyhedra’s zkBridge, Axelar, LayerZero Labs’ general DVNs, and Ondo’s custom DVN — creating an environment that aligns with Ondo Finance and prevents single points of failure.
The bridge is now operational, enabling users to transfer Ondo’s USDY tokens with no slippage between Ethereum, Arbitrum, and Mantle networks, with future blockchain integrations planned.
Source: Setting a New Standard for Institutional-Grade Bridging with LayerZero
The adoption of OFT has gained significant traction across various token categories. OFT adoption is highest among these token types:
Also another notable trend is having the chain’s native gas token as OFT, for example APE, VANA, BTCN. This means that the chain itself can run the LayerZero infrastructure, DVN, to serve as the gateway for the token transfer. For example, the APE token is secured by Horizen Labs, the developer of Apechain. This means that the operator of the chain secures how the native APE token comes in and out. This provides an additional security layer for chains to have a native bridge embedded in the chain.
Extending the scenario above, let’s think about runningSui native bridgewith LayerZero, which is secured by Sui validators and connects with Ethereum. This native bridge enables secure asset transfers from Ethereum to Sui through chain validator verification. If some Sui validators were to participate as a LayerZero DVN for their chain, they could establish connections with other blockchains. This would enable Sui to connect with established chains like Solana and Arbitrum, as well as upcoming chains such as Initia, Berachain, Sonic, and Abstract from launch. This would allow OFT tokens to be available in the Sui ecosystem, which would be secured by Sui validators.
Source: LayerZero OFTs
The rationale for using multichain tokens is clear. With low integration costs, they can be used across different blockchains. However, the direct use cases are limited when leveraging just the token framework. For example, if I want to hold ENA in Solana and stake it for points, this requires separate OApp logic to support it. Without specific implementation, the token simply exists as a pure token in different blockchains.
For token issuers, I believe the adoption of token frameworks will evolve in three steps:
Token Framework has stood out as one of the largest use cases for cross-chain messaging, and this led most messaging protocols to develop their own token frameworks. Major frameworks include OFT by LayerZero, ITS by Axelar, NTT by Wormhole, Warp Token by Hyperlane, and CCT by Chainlink. Additionally, messaging-agnostic frameworks like xERC20 and ecosystem-specific tokens like superchainERC20 by Optimism are emerging. Among these, OFT currently leads in both total value secured and project adoption.
Three key factors will determine success in token framework development as competition intensifies:
In this competitive landscape, LayerZero has been the one that had its token framework since 2022, and most of the others were shipped in 2024. So the first-mover advantage, no hacks, and its quick market adoption had put OFT as the leader in this position.
So, “Just OFT it?” For now, yes. But as others are still in an early stage of production, looking into how they will ship in the market would be important to track.
Related Articles, News, Tweets etc. :