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Key Points

  • The LayerZero project is committed to building bridges between various blockchain networks, with the goal of achieving seamless cross-chain communication so that assets and data can move freely between different chains.

  • LayerZero leverages Ultra Light Nodes (ULNs), relayers, and oracles to provide an efficient, secure, and scalable interoperability solution.

  • LayerZero improves user experience and creates a more unified ecosystem for decentralized applications (DApps), which is expected to promote the development of multiple Web3 fields such as DeFi, NFTs, and games.

Introduction

Blockchain technology has revolutionized the digital world by introducing a decentralized system. However, the ecosystem is currently fragmented, with each blockchain operating independently. This has created a huge demand for interoperability solutions that can connect different networks. The LayerZero project is one of these solutions, which aims to build a bridge between blockchains.

This article will introduce the concept of LayerZero, its working principle and its potential impact on the blockchain field. In addition, this article will also introduce the basics of LayerZero’s native token ZRO and its airdrop.

What is LayerZero?

LayerZero is an interoperability protocol designed to facilitate frictionless communication between blockchains. The protocol aims to create a unified and interconnected blockchain ecosystem where assets and data can move freely between networks. Interoperability is critical for decentralized applications (DApp) to interact with multiple blockchains to leverage their unique capabilities and resources.

LayerZero Key Features

1. Interoperability

The main goal of LayerZero is to enable cross-chain communication. This means that users can easily transfer assets and data between blockchains. For example, users can transfer tokens from Ethereum to BNB Smart Chain (BSC) without the need for centralized exchanges or complicated exchange processes.

2. Ultra Light Node (ULN)

One of the most notable features of LayerZero is its use of Ultra-Light Nodes (ULNs). Traditional blockchain bridging usually relies on full nodes or light clients, which is very resource-consuming. In contrast, ULN provides the necessary security guarantees without extensive computational and bandwidth requirements. Therefore, LayerZero is more efficient and scalable higher.

3. Relays and Oracles

LayerZero uses a unique combination of relayers and oracles to verify cross-chain messages. Relays are responsible for sending transaction proofs, while oracles provide the data required for verification. This dual mechanism ensures that no entity can control the transaction process alone, thereby improving security and trust.

4. Security

LayerZero’s architecture distributes trust across multiple entities, greatly enhancing security. Relays and oracles must agree for transactions to be validated. This reduces the risk of fraud or attacks, as entities would have to collude to compromise the system.

5. Scalability

The protocol is designed to be efficient and can handle large volumes of cross-chain transactions without bottlenecks. This scalability is critical to meeting the growing demand for cross-chain interactions, especially in areas such as decentralized finance (DeFi) and non-fungible tokens (NFT).

6. Easy for developers to use

LayerZero provides a set of software development kits (SDKs) and application programming interfaces (APIs) so that developers can easily integrate cross-chain functions into DApps. This simplifies the development process and makes the protocol widely popular.

How LayerZero works

To understand how LayerZero works, it is important to delve deeper into its architecture and the roles of key components such as ultralight nodes, relayers, and oracles.

Ultra Light Node (ULN)

Hyperlink nodes are lightweight nodes that provide the security of full nodes without the need for resources. They rely on off-chain entities (relayers and oracles) to perform the heavy computation and verify transactions to achieve security.

  • Efficiency: ULN does not need to store or process large amounts of data, making it highly efficient.

  • Security: By offloading verification tasks to trusted off-chain entities, ULN maintains security without compromising performance.

Repeater

The relayer is responsible for transmitting transaction proofs between blockchains. When a transaction occurs on one blockchain, the relayer sends proof of the transaction to the target blockchain.

  • Decentralization: Multiple independent relayers can operate in the LayerZero network, reducing the risk of centralization.

  • Verification: Relayers do not have the authority to finalize transactions themselves; their role is to provide the necessary proofs.

Oracle

Oracles provide the data needed to verify cross-chain transactions. Oracles work in conjunction with relayers to ensure that transaction proofs are accurate and reliable.

  • Data accuracy: The oracle obtains data from reliable sources and confirms transaction details.

  • Double verification: The relayer’s proof and the oracle’s data must match for the transaction to be verified.

Verification Process

1. Initiate a transaction: The user initiates a transaction on the source blockchain.

2. Generate proof: The relayer generates a transaction proof.

3. Oracle provides data: The oracle provides the data required to verify the transaction.

4. Cross-chain verification: Both the relayer’s proof and the oracle’s data will be sent to the target blockchain.

5. Transaction finalization: If the proof and data match, the target blockchain verifies the transaction and completes the cross-chain transfer.

Example: Transferring tokens from Ethereum to BNB Smart Chain (BSC)

1. Initiation: User sends 100 tokens from Ethereum wallet to LayerZero smart contract on Ethereum.

2. Locking: The LayerZero smart contract locks these 100 tokens in Ethereum.

3. Generate proof: The relayer generates a proof of this transaction and sends it to the BSC.

4. Oracle Data: The oracle retrieves and verifies transaction details from Ethereum.

5. Cross-chain verification: BSC verifies the transaction after receiving the proof and data.

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

7. Final confirmation: The user will receive 100 tokens in his BSC wallet.

So how is this different from a regular blockchain bridge? Find out below.

LayerZero vs. Blockchain Bridge

LayerZero's cross-chain transmission method is different from traditional bridging in many ways. The significant differences are in architecture, security and efficiency. Here are the key differences between LayerZero and traditional blockchain bridges.

1. Architecture:

  • LayerZero: Uses ultra-light nodes (ULN) and relies on off-chain entities (relays and oracles) for verification, reducing the need for heavy computing resources.

  • Traditional bridging: usually relies on full nodes or light clients, both of which are more resource-intensive.

2. Security:

  • LayerZero: Using a dual mechanism of relayers and oracles, which can disperse trust and reduce the risk of single point failure. The two must collude with each other to destroy the system.

  • Traditional bridging: Usually relies on a centralized or single-party validator. More vulnerable to attack if the centralized entity is compromised.

3. Efficiency:

  • LayerZero: Aims to achieve high efficiency, enabling cost-effective cross-chain transactions by reducing computing and bandwidth requirements.

  • Traditional bridging: Usually has high resource consumption and may incur high transaction fees.

LayerZero Advantages:

  • Universal interoperability: can connect to any blockchain, providing a flexible and scalable solution.

  • Convenient for developers: SDK and API are provided to easily integrate cross-chain functions into DApps.

  • Reduced risk of attack: A decentralized trust model improves security compared to centralized bridges.

LayerZero's innovative approach addresses many of the limitations of traditional blockchain bridges, ensuring more efficient, secure, and flexible cross-chain interactions.

ZRO Token

The ZRO token is LayerZero’s native governance token and can be used to incentivize participation and decision-making within the LayerZero community. ZRO token holders can vote on major changes and improvements to the LayerZero protocol.

ZRO tokens will be listed on Binance with a seed tag on June 20, 2024. Please refer to the official listing announcement for details.

ZRO Token Airdrop

The ZRO token airdrop will distribute 8.5% of the total supply to eligible wallets. 5% will be distributed to the core community, 3% to the Request for Proposal (RFP), and 0.5% to the community pool.

qualifications

1. Request for Proposal (RFP). Wallets listed in the approved protocol RFP are eligible to receive a minimum of 5 ZRO and a maximum of 10,000 ZRO. The specific protocol allocation amount is determined by the following factors:

  • The number of messages sent before and after the snapshot.

  • The number of days after the first message was sent on LayerZero.

  • Application category (OApp, OFT, ONFT).

The developer allocation target is a 90/10 split, with each development team being able to own up to 100,000 ZRO. Anything above that will be distributed to other developers.

2. Core. All users who traded on the LayerZero protocol before the snapshot are eligible for a minimum allocation of 25 ZRO and a maximum of 25,000 ZRO. Allocation is determined by protocol fees paid and the following other factors:

  • Transactions under $1 and valueless non-fungible token (NFT) transactions will have their weight reduced by 80% to prioritize real engagement.

  • Both early users and post-snapshot users can receive multiple rewards to recognize their continued participation in the protocol.

How to claim ZRO airdrop?

Please be wary of fake websites and phishing attempts, and make sure you are using official websites and channels.

Please follow the steps below to verify eligibility and claim your ZRO tokens:

1. Visit the official airdrop website.

2. Connect to your Ethereum Virtual Machine or Aptos Wallet to see if you are eligible to participate in the airdrop. If you are eligible, the page will show you the number of tokens you can claim.

3. Select the claim network from the given options.

4. Donate USDC, USDT or native Ethereum worth $0.10 per ZRO to claim the token.

5. Click [Receive] to receive ZRO tokens.

Potential Impact of LayerZero

LayerZero enables seamless cross-chain communication and has far-reaching implications for the blockchain ecosystem.

1. Enhanced Decentralized Finance (DeFi)

DeFi platforms can greatly benefit from LayerZero's interoperability. Currently, DeFi users often face challenges when transferring assets between different blockchains, resulting in fragmented liquidity and increased transaction costs. LayerZero can simplify these processes, making DeFi applications more integrated and efficient.

2. Expanding the application of NFT

LayerZero can have a significant impact in the NFT space. LayerZero enables NFTs to be transferred between different blockchains, increasing their utility and reach. Artists and creators can leverage the unique advantages of various blockchains, such as lower fees or higher scalability, to optimize their NFT projects.

3. Connected Games and the Metaverse

In the gaming and metaverse space, LayerZero helps create connected experiences. Players can transfer assets and in-game items between different platforms and enjoy an immersive and seamless experience. This interoperability can drive innovation and attract more users to participate in blockchain games and metaverse projects.

4. Improve user experience

One of LayerZero’s key goals is to improve the user experience by providing fast, secure, and cost-effective cross-chain transactions. Users no longer need to rely on multiple wallets or go through complicated processes to transfer assets between blockchains. This simplicity can drive widespread adoption of blockchain technology.

5. Unified DApp ecosystem

LayerZero enables seamless communication between different blockchains, which helps create a more unified DApp ecosystem. Developers can build applications that leverage the strengths of multiple blockchains, thereby developing more powerful and comprehensive DApps.

challenge

While LayerZero offers a promising solution for blockchain interoperability, it also faces challenges. Ensuring the security and reliability of relayers and oracles is critical. Additionally, both developers and users will need to trust the benefits of the protocol to achieve widespread adoption.

Securities

While the dual mechanism of relayers and oracles enhances security, it also introduces potential points of failure. Therefore, it is important to ensure that these entities remain honest and reliable. Regular audits, decentralized governance, and incentive mechanisms can help mitigate these risks.

Adoption and Integration

It will still take time to convince developers to integrate LayerZero into their DApps. Providing comprehensive documentation, support, and incentives can encourage user adoption. Collaboration with existing projects and blockchain networks can also speed up the process.

Conclusion

LayerZero solves one of the most pressing challenges in the blockchain space by enabling seamless communication between different blockchains. Unlike traditional blockchain bridges, LayerZero innovatively uses ultra-light nodes, relayers, and oracles to provide a more efficient, secure, and scalable solution.

Further reading


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