Besides #AccountAbstraction, is#Omnichainconsidered an indispensable piece for the future crypto market?
Omnichain Fungible Tokens (#OFTs) are attracting attention as a multi-chain standard for tokens with commonality 👇
#Research
1, Current status:
To scale #multi-chain, instead of unifying liquidity,#bridgesare creating independent liquidity “isolation boxes”.
These boxes exist between independent chains, making them difficult to use, and there is a risk of losing#pegswhen users withdraw from the pool.
2, Solution
The#OmnichainFungible Token ( #OFT) standard was created by
@LayerZero_Labs
designed to be a common fungible token standard that is interoperable with other established fungible-tokens on different chains
3, An interoperable OFT with ERC-20, BEP-20, fungible-tokens on Aptos and more. Almost a year after the first OFT was created with the launch of#stargatefinancegovernance token, $STG, OFTs are starting to be widely used in crypto
4, In short,#OFTis the concept of projects using#LayerZeroto issue their tokens to another blockchain without having to go through a wrapped liquidity solution.
5, Notable benefits:
- OFTs do not require assets locked on one chain before being minted on another chain. Instead, assets are burned on the source chain and minted on the destination chain. Eliminate vector attacks on honeypots on Bridges.
6, Notable benefits:
- No need for liquidity networks common in other bridges (as assets can be minted and burned 1:1 on demand). This means that the only fee a user has to pay to bridge an OFT is the gas fee. Transfer $10k horizontal transfer fee $100k
7, As Ethereum Layer-2 and other Layer-1 networks continue to gain momentum, the benefits that OFTs provide make them applicable in a variety of ways across the multichain terrain.
8, Projects are integrating #OFTs
- @traderjoe_xyz Trader Joe partners with LayerZero, launching JOE as OFT
- @PancakeSwap In December 2022, PancakeSwap announced it had partnered with LayerZero to launch Aptos PancakeBridge
- @Avax and#LayerZerohave teamed up to launch BTC.b, an OFT representing Bitcoin on Avalanche that is automatically bridged
- @StargateFinance - Hub for OFT tokens
Stargate voted in December 2022 to add OFT tokens to its user interface and charge a 0.02% fee on all transfers
9,#OFTsand#LayerZerowere able to solve the multi-chain problem in the#cryptoworld. Any application that wants multi-chain support for its native token can adopt the OFT standard and issue tokens on any connected chain
In the future, the#OFTstandard can be used to develop next-generation decentralized#stablecoinprotocols.