LayerZero Protocol: A New Standard for Cross-Chain Interoperability

Recently, the full-chain interoperability protocol LayerZero completed a $120 million financing round with a valuation of $3 billion, tripling its valuation from the previous round. This article will delve into the technical principles of LayerZero and its advantages in the cross-chain field.

LayerZero Technical Principles

LayerZero is a trustless cross-chain communication protocol. It divides the intermediary trust elements into relayers and oracles through a ultra-light node mechanism, achieving higher security at a lower cost. It is worth noting that LayerZero primarily provides message cross-chain services, rather than direct asset cross-chain.

ultra-light node mechanism

The ultra-light node (ULN) is the core technology of LayerZero. Unlike traditional light nodes, ULN does not require storing all block headers in sequence, but instead transmits data on demand through decentralized oracles. This approach significantly reduces cross-chain costs, but also brings certain security trade-offs.

The Core Role of LayerZero in Cross-Chain

LayerZero's cross-chain process primarily relies on two key roles: Oracle( and Relayer).

1. Oracle is responsible for providing the information required for validation to the target chain, including Blockhash and Block Receiptsroot.

2. The relayer is responsible for transmitting the specific cross-chain message content and validating the required proofs.

This division of labor mechanism effectively reduces the risk of single points of failure and enhances the overall security of the system.

LayerZero's Cross-Chain Lifecycle

A complete LayerZero cross-chain process includes the following steps:

1. The user application initiates a cross-chain request.
2. Information is processed through the LayerZero protocol.
3. The oracle and the relay handle relevant information separately.
4. Verification information of LayerZero endpoints on the target chain
5. The target chain executes cross-chain operations

During the entire process, only one transaction is required to be executed on the source chain, while there will be three transactions on the target chain, executed by the relayer, oracle, and LayerZero executor.

Advantages of LayerZero

1. Highly customizable: Applications can freely choose relayers and oracles, enhancing system flexibility.

2. Diversifying Risk: Multiple participants reduce the risk of single points of failure.

3. Security Audit: Passed security audits from multiple well-known institutions and established a high bounties for vulnerabilities.

4. Powerful versatility: Compared to other protocol layer cross-chain solutions, LayerZero has a broader applicability.

5. Developer-friendly: Simplified the onboarding process for developers and lowered the entry barrier.

6. Solve multi-chain fragmentation: adopt non-encapsulated asset approach, support EVM and non-EVM environments, and provide a unified liquidity layer.

Conclusion

As the infrastructure for cross-chain communication, LayerZero is becoming an indispensable part of the multi-chain ecosystem. Its innovative technology solutions and wide applicability have earned it market recognition, and it has also pointed the way for the future development of multi-chain interoperability.