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Key points:

  • LayerZero is a project aimed at bridging the gap between different blockchain networks. Its purpose is to provide seamless cross-chain communication, allowing assets and data to move freely between different blockchains.

  • Using Ultra Lightweight Nodes (ULNs), relays, and oracles, LayerZero can provide an efficient, secure, and scalable interoperability solution.

  • LayerZero has the potential to improve various Web3 sectors such as DeFi, NFT and gaming by improving user experience and creating a more unified ecosystem for decentralized applications (dApps).

Introduction

Blockchain technology revolutionized the digital world by introducing decentralized systems. However, the ecosystem is fragmented and different blockchains operate in isolation. This has created significant demand for interoperability solutions that can bring these disparate networks together. LayerZero is one such project aimed at bridging the gap between different blockchains. 

In this article, we'll take a look at what LayerZero is, how it works, and its potential impact on the blockchain landscape. The basics of the native LayerZero (ZRO) token and the ZRO token airdrop will also be covered.

What is LayerZero?

LayerZero is an interoperability protocol designed for seamless communication between different blockchains. It aims to create a single, interconnected blockchain ecosystem in which assets and data can move freely between different networks. This capability is critical for developing decentralized applications (dApp) that need to interact with multiple blockchains to utilize their unique features and resources.

Key features of LayerZero

1. Compatibility

The main purpose of LayerZero is to enable cross-chain communication. This means that users will be able to effortlessly transfer assets and data between different blockchains. For example, a user can move tokens from Ethereum to BNB Smart Chain (BSC) without the need for a centralized exchange or complex swap process.

2. Ultralight node (ULN)

One of the notable features of LayerZero is the use of Ultra Light Nodes (ULN). Traditional blockchain bridges often rely on full nodes or thin clients, which can be resource intensive. ULNs, on the other hand, provide the necessary security guarantees without heavy computational and bandwidth requirements. This makes LayerZero more efficient and scalable.

3. Repeaters of her oracles

LayerZero uses a unique combination of relays and oracles to verify cross-chain messages. Relays are responsible for sending proof of transactions, while oracles provide the necessary data for verification. This dual mechanism ensures that no single entity can control the transaction process, increasing security and trust.

4. Security

The LayerZero architecture significantly increases security by distributing trust between multiple entities. Both the relays and the oracles must agree for the transaction to be verified. This reduces the risk of fraud or attacks, as it would require collusion between these individuals to compromise the system.

5. Scalability

The efficient design of the protocol allows processing a large number of cross-chain transactions without interference. This scalability is critical to support the growing demand for cross-chain interactions, especially in areas such as decentralized finance (DeFi) and non-fungible tokens (NFT

6. Convenience for developers

LayerZero provides a set of Software Development Kits (SDK) and Application Programming Interface (API) to help developers easily integrate cross-chain capabilities into their dApps. This simplifies the development process and promotes wider adoption of the protocol.

How LayerZero works

To understand how LayerZero works, you need to delve into its architecture and the roles of its key components: ultralight nodes, repeaters, and oracles.

Ultralight nodes (ULN)

ULNs are simplified nodes that offer the security guarantees of full nodes without their resource requirements. They achieve this by relying on off-chain entities (repeaters and oracles) to perform heavy calculations and verify transactions.

  • Efficiency: ULNs do not need to store or process large amounts of data, making them highly efficient.

  • Security: By offloading verification tasks to trusted off-chain entities, ULNs support security without sacrificing performance.

Repeaters

Relays are responsible for transferring proof of transactions between blockchains. When a transaction occurs on one blockchain, the relay sends confirmation of that transaction to the target blockchain.

  • Decentralization: Multiple independent relays can operate on a LayerZero network, reducing the risk of centralization.

  • Verification: relayers do not have the ability to complete transactions on their own; their role is to provide the necessary evidence.

Oracles

Oracles provide the data needed to validate cross-chain transactions. They work together with relays to ensure that proof of transactions is accurate and reliable.

  • Data Accuracy: Oracles obtain data from reliable sources to verify transaction details.

  • Double Validation: Both the relay proof and the oracle data must match for the transaction to be verified.

Verification process

1. Transaction Initiation: A user initiates a transaction on the source blockchain.

2. Proof generation: The relay generates proof of the transaction.

3. Data provision by the oracle: The oracle provides the necessary data to confirm the transaction.

4. Cross-chain validation: Both the relay confirmation and the oracle data are sent to the target blockchain.

5. Transaction Completion: The target blockchain verifies the transaction or confirmation and the data matches, completing the cross-chain transfer.

Example: Token transfer from Ethereum to BNB Smart Chain (BSC)

1. Initiation: A user sends 100 tokens from their Ethereum wallet to a LayerZero smart contract on Ethereum.

2. Blocking: LayerZero smart contract blocks 100 tokens on Ethereum.

3. Proof generation: the relay generates a proof of this transaction and sends it to the BSC.

4. Oracle data: The oracle receives and verifies transaction details from Ethereum.

5. Cross-chain verification: BSC receives confirmation and data verifying the transaction.

6. Minting/Unlocking: LayerZero smart contract on BSC mints 100 wrapped tokens or unlocks 100 pre-locked tokens.

7. Completion: User receives 100 tokens in his wallet on BSC.

At this point you may be asking: How is this different from regular blockchain bridges? Let's find out.

LayerZero and blockchain bridges

LayerZero's approach to cross-chain transfers differs from traditional bridges in many ways, including in terms of architecture, security, and efficiency. Below are some of the key differences between LayerZero and traditional blockchain bridges.

1. Architecture:

  • LayerZero: Uses Ultra Lightweight Nodes (ULNs) that reduce the need for heavy computing resources by relying on off-chain entities (repeaters and oracles) for validation.

  • Traditional bridges: often rely on full nodes or thin clients, which are more resource intensive.

2. Security:

  • LayerZero: Uses a dual mechanism of relays and oracles, distributing trust and reducing the risk of single points of failure. Both must conspire to compromise the system.

  • Traditional bridges: Often rely on centralized or one-way validators, making them more susceptible to attacks if the central object is compromised.

4. Efficiency

  • LayerZero: Designed for high efficiency with lower computational and bandwidth requirements, enabling cost-effective cross-chain transactions.

  • Traditional bridges: These typically have higher resource consumption, resulting in potentially higher transaction fees.

Advantages of LayerZero:

  • Universal compatibility: Can connect any blockchain, providing a flexible and scalable solution.

  • Developer-friendliness: Offers SDK and API for easy integration of cross-chain functionality into dApp.

  • Reduced attack surface: Decentralized trust model increases security compared to centralized bridges.

LayerZero's innovative approach provides more efficient, secure, and flexible cross-chain interaction, eliminating many of the limitations of traditional blockchain bridges.

Token ZRO

The ZRO token is LayerZero's native control token. It drives participation and decision-making within the LayerZero community. ZRO token holders can vote on important changes and improvements to the LayerZero protocol.

The ZRO token was listed on Binance using the seed tag on 06/20/2024. Please see the official listing announcement for details.

Airdrop of ZRO tokens

The Airdrop of ZRO tokens distributed 8.5% of the total supply to the respective wallets. This includes 5% for the core community, 3% for the request for proposal (RFP), and 0.5% for the community pool.

Criteria

1. Request for Proposals (RFP). The wallets listed in the approved RFP protocol were acceptable with a minimum allocation of 5 ZRO and a maximum of 10,000 ZRO. Specific protocol allocations were determined based on various factors, such as:

  • Number of messages sent before and after the snapshot.

  • The number of days since the first message was sent to LayerZero.

  • Application category (OApp, OFT, ONFT).

Developer allocations were targeted at a 90/10 split, with a maximum of 100,000 ZRO per development team. The surplus was distributed among other developers.

2. The basis. All users who transacted on the LayerZero protocol prior to the snapshot were eligible for a minimum allocation of 25 ZRO and a maximum of 25,000 ZRO. The allocation was based on the protocol fee paid and some additional factors such as:

  • Transactions under $1 and non-fungible token (NFT) transactions with no value received 80% less to prioritize genuine engagement.

  • Multipliers were given to early adopters and users who joined after the snapshot to recognize ongoing participation in the protocol.

How to get ZRO airdrop?

Beware of fake websites and phishing attacks. Make sure you are using official websites and channels. 

Follow these steps to verify your eligibility and claim your ZRO tokens:

1. Visit the official airdrop site. 

2. Connect your wallet that supports EVM or Aptos and check if you are eligible for the airdrop. If you are eligible, the page will show the number of tokens you can get.

3. Select a network to receive from the options provided.

4. To get the tokens, you will need to donate $0.10 in USDC, USDT or native ETH for each ZRO token.

5. Click [Get] to get ZRO tokens.

Potential impact of LayerZero

LayerZero's ability to provide seamless cross-chain communication has far-reaching implications for the blockchain ecosystem.

1. Advanced Decentralized Finance (DeFi)

DeFi platforms can greatly benefit from LayerZero interoperability. Currently, DeFi users often face problems moving assets between different blockchains, resulting in fragmented liquidity and higher transaction costs. LayerZero can simplify these processes, allowing for more integrated and efficient DeFi applications.

2. Wider use of NFTs

The NFT space is another area where LayerZero can make a significant impact. By allowing NFTs to move between different blockchains, LayerZero can increase their utility and reach. Artists and creators can use the unique features of different blockchains, such as lower fees or better scalability, to optimize their NFT projects.

3. Interrelated games and metauniverses

In the gaming and metaverse sectors, LayerZero can facilitate the creation of interconnected interfaces. Gamers can move assets and in-game items across platforms, creating a smoother and more immersive experience. This compatibility can drive innovation and attract more users to blockchain-based games and metaverse projects.

4. Improved user experience

One of LayerZero's key goals is to improve the user experience by enabling fast, secure, and cost-effective cross-chain transactions. Users no longer need to rely on multiple wallets or go through complex processes to transfer assets between blockchains. This simplicity may contribute to the wider adoption of blockchain technology.

5. A unified dApp ecosystem

By ensuring seamless communication between different blockchains, LayerZero can help create a more unified dApp ecosystem. Developers can build apps that leverage the strengths of multiple blockchains, resulting in more reliable and versatile dApps.

Challenges

Although LayerZero is a promising solution for blockchain interoperability, it is not without problems. Ensuring the safety and reliability of repeaters and oracles is critical. In addition, to achieve widespread adoption, developers and users will need to be convinced of the benefits of the protocol.

Security

While the dual mechanism of repeaters and oracles improves security, it also creates potential points of failure. It is very important to make sure that these objects remain honest and reliable. Regular audits, decentralized management and incentive mechanisms can help reduce these risks.

Acceptance and integration

Convincing developers to integrate LayerZero into their dApps may take time. Providing comprehensive documentation, support and incentives can drive adoption. Cooperation with existing projects and blockchain networks can also accelerate this process.

Results

By providing seamless communication between different blockchains, LayerZero solves one of the most pressing problems in the blockchain space. Its innovative use of ultra-lightweight nodes, relays and oracles sets it apart from traditional blockchain bridges, offering a more efficient, secure and scalable solution.


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