The main innovation of CryptoEconomic DVN Framework is that it provides core components for DVN through AVS, defines the pledged assets and penalty mechanisms.
● CryptoEconomic DVN Framework The framework combines LayerZero’s cross-chain messaging with EigenLayer’s economic security and incentives;
● The DVN framework operates through a structured process with three main stages: verification, rejection and punishment;
● LayerZero chose to work with EigenLayer to further deepen the decentralization of its DVN, accepting ETH, ZRO, and EIGEN as collateral assets while also bringing new growth flywheels to both tokens;
● CryptoEconomic DVN Framework may help improve the security of the entire chain in the future.
According to a news release on October 2, 2024, LayerZero Labs and Eigen Labs have jointly launched a crypto-economic decentralized verification network (DVN) framework, which aims to provide crypto-economic security for full-chain messaging. Under this framework, developers can not only deploy their own DVN on EigenLayer, but also enhance the security and reliability of cross-chain messaging by introducing incentive mechanisms.
The CryptoEconomic DVN framework combines the cross-chain security mechanism of LayerZero with the dual protection of EigenLayer's re-staking cryptographic economy. Its core purpose is to use EigenLayer's cryptoeconomic model to provide higher security and incentives for the decentralized verification network (DVN).
LayerZero is not only an asset cross-chain but also a trustless cross-chain communication protocol. It separates the ultimate trust link through repeaters and oracles, that is, it realizes cross-chain messages through a super light node mechanism.
The core design of the LayerZero V2 architecture can be divided into three categories: protocols, standards, and infrastructure.
The protocol part of LayerZero is consistent across all supported blockchains and is immutable and permissionless, ensuring censorship resistance and long-term stability. This part consists of two main components: Endpoints and MessageLibs.
The standards provided by LayerZero allow developers to build applications and tokens that run consistently across multiple blockchains, achieving cross-chain “unified semantics”, meaning that applications or tokens behave the same across different blockchains. These standards help simplify the development process and ensure consistency and scalability of cross-chain applications.
LayerZero's infrastructure layer is fully open and modular, and any entity can join the LayerZero network to verify and execute transactions. This design enables applications to choose different verification and execution methods according to their needs to achieve the optimal balance in terms of security, cost, speed, etc.
EigenLayer consists of a series of smart contracts that allow users to choose to "re-stake" their ETH or Liquid Staking Tokens (LST) to guide new Proof of Stake (PoS) networks and services in the Ethereum ecosystem, obtain additional staking income/rewards, and provide security and decentralization properties for other modular components and blockchain networks. Simply put, its essence is to sell the security of Ethereum.
CryptoEconomic Distributed Verification Networks (DVNs) improve cross-chain security in three key ways: cryptoeconomic security, AVS-defined security, and permissionless security.
The CryptoEconomic DVN framework is an open source system that works to enhance the security of the decentralized verification network (DVN) through economic incentives tied to tokens. It relies on LayerZero's DVN verification messages and adds an additional layer of security. Specifically, four key mechanisms are used to protect LayerZero's cross-chain messaging: staking, verification, veto, and punishment.
Today, the Ethereum infrastructure is becoming more and more complete, and the multi-chain structure has become a foregone conclusion. The communication security issue between different chains is still a challenge that cannot be ignored. The main innovation of the CryptoEconomic DVN Framework is that it provides core components for DVN through AVS, defines the pledged assets and penalty mechanism. In the long run, it may help improve the security of the entire chain, but the uncertain impact it brings is also a common problem in the industry. How to find a balance between security and flexibility is a problem that needs to be solved in the future.
There is no doubt that the CryptoEconomic DVN Framework is a two-way empowerment cooperation between LayerZero Labs and Eigen Labs. From a technical perspective, it provides protection through staking, penalty mechanisms, verification and veto mechanisms; but from an economic benefit perspective, this is still a "nesting doll" operation of PoS staking income.
LayerZero has chosen to work with EigenLayer to further decentralize its DVN, accepting ETH, ZRO, and EIGEN as collateral assets while also bringing new growth flywheels to both tokens. LayerZero provides technology and EigenLayer provides funding. The cooperation between the two parties allows validators to be rewarded and encourages honest behavior in this economic system.