What is LayerZero

LayerZero is a technology that enables applications to move data across blockchains. It supports censorship-resistant messaging and is developed with a permissionless mechanism. It offers cross-chain interoperability capabilities, making it a powerful and efficient choice for bridging between blockchains, utilizing widely adopted standards for cross-chain activities.

LayerZero Labs, a Vancouver-based startup founded in 2021, developed the LayerZero protocol. The project launched in September of that year and was spearheaded by a team of University of New Hampshire alumni. Bryan Pellegrino, Caleb Banister, and Ryan Zarick, the company's founders, serve as CEO, lead engineer, and CTO, respectively.

Left Caleb Banister, Center Ryan Zarick, Right Bryan Pellegrino – Image Source Sequoia

LayerZero is considered one of the most prominent startups in the blockchain industry, having raised over $260 million in funding. Notable investors include Sequoia Capital, OpenSea, Uniswap (UNI), PayPal, and over 40 other institutional investors. LayerZero currently boasts a valuation of $3 billion, ranking among the highest-valued blockchain protocols and DApps. 

In December 2023, LayerZero announced the launch of LayerZero V2, scheduled for an upgrade in December 2024. This major upgrade will enhance security, introduce programmability to the Omnichain blockchain network, and streamline blockchain verification processes. As of 8 October 2024, LayerZero supports over 70 blockchains and powers over 200 applications.

Total Messages in LayerZero Scan — Source: LayerZero

Key Features of LayerZero

1. Interoperability:

LayerZero's primary objective is to enable cross-chain communication, allowing users to transfer assets and data across various blockchains effortlessly. For instance, users can seamlessly move tokens from Ethereum to Solana without the complexities of decentralized exchanges or swaps.

2. Ultra Light Nodes (ULNs): 

A standout feature of LayerZero is its utilization of Ultra Light Nodes (ULNs). Unlike traditional blockchain bridges that often rely on full nodes or light clients, which can be resource-intensive, ULNs offer a more efficient approach. ULNs provide security without demanding substantial computational power or bandwidth, enhancing LayerZero's scalability and performance.

3. Relayers and Oracles:

LayerZero employs a unique combination of relayers and oracles to verify cross-chain messages. Relays transmit transaction proofs, while oracles provide the necessary data for verification. This dual mechanism ensures that no single entity can control the transaction process, bolstering security and trust.

4. Security:

LayerZero's architecture significantly enhances security by distributing trust among its components. Both relayers and oracles must agree for a transaction to be validated, reducing the risk of fraud or attacks.

5. Scalability: 

The protocol is designed to handle a high volume of cross-chain transactions without encountering bottlenecks. This scalability is crucial for accommodating the massive demand, especially in DeFi and NFT applications.

6. Developer-Friendly:

LayerZero provides a comprehensive suite of software development kits (SDKs) and application programming interfaces (APIs) to simplify the integration of cross-chain capabilities into DApps. This reduces development complexity and promotes broader adoption of the protocol.

What is ZRO used for?

The ZRO token, LayerZero’s native token, plays a pivotal role within the LayerZero ecosystem. It serves as both a utility token and offers various benefits to its holders.

• Transaction Fees: ZRO tokens facilitate the payment of fees for cross-chain transactions and other services.

• Validator and Network Participant Rewards: The protocol rewards validators and other network participants to maintain security and efficiency.

• Governance Participation: ZRO holders can participate in governance, including voting on upgrades, developments, and significant changes, thereby influencing the protocol's future direction.

• Staking Rewards: Users can stake their ZRO tokens to earn rewards, incentivizing long-term holding and active participation in the ecosystem.

• Airdrop Eligibility: Involvement in LayerZero projects and token holdings can increase eligibility for airdrops. The most recent airdrop concluded on 20 June 2024.

Token Supply and Token Distribution

• Ecosystem Fund: 25%

• Airdrops: 19% (5% for Initial DEX Offering (IDO)

• Contributors: 19%

• Investors: 17%

• Retroactive Public Goods Funding (RPGF): 20%

Interesting information about ZRO

According to CoinMarketCap, as of 3 December 2024, ZRO had a market capitalization of $683,798,215 or 23,577,847,086 THB. 

At the time of writing, ZRO was trading at approximately $6.22 or 213 TH per token. ZRO reached its all-time high of $6.82 or 234.98 THB per token on 2 December 2024.

References

• LayerZero Team
• LayerZero Network
• CoinMarketCap

Disclaimer:

• Cryptocurrency and digital tokens involve high risks; investors may lose all investment money and should study information carefully and make investments according to their own risk profile.
• Past Returns do not guarantee future returns/performance.