LayerZero

Definition

A cross-chain messaging protocol that connects many blockchains through endpoint contracts, with each application configuring its own verifiers and delivery settings.

In depth

LayerZero deploys immutable endpoint contracts on each supported chain. When an app sends a message, independent verifiers called Decentralized Verifier Networks, or DVNs, check that the message was committed on the source chain, and an executor delivers it to the destination once the required DVNs have confirmed it. Each application chooses its own security configuration, such as which DVNs to require and how many must agree, so security varies from app to app. Token issuers commonly use its Omnichain Fungible Token standard, known as OFT, which moves tokens by burning and minting or by locking and releasing. LayerZero Labs develops the protocol, and ZRO is its governance token.

What does LayerZero mean?

An application on the source chain calls the LayerZero endpoint with a message and a destination chain, paying a fee. The endpoint records the message and emits an event. The DVNs that the application has selected independently verify the message and submit their confirmations on the destination chain. Once the required DVNs agree, an executor calls the destination endpoint, which delivers the message to the receiving application. If the message moves an OFT token, the source contract burns or locks the tokens and the destination contract mints or releases them.

An example

A token issuer deploys its token as an OFT on three chains and requires two independent DVNs to verify every transfer. A holder sends 400 tokens from one chain to another, paying about $0.80. The tokens are burned on the source chain, both DVNs confirm the message within about a minute, and 400 tokens are minted to the holder's address on the destination chain.

Figures are illustrative only.

What beginners get wrong

• Many people assume every app using LayerZero has the same security. Each app picks its own verifiers and thresholds, so one integration can be much weaker than another.
• It is easy to think LayerZero is a blockchain. It is a messaging protocol made of contracts on existing chains plus off-chain verifiers, and it has no chain of its own.
• Some users believe that tokens sharing a brand across several chains are automatically interchangeable. Tokens move only through the route the issuer has configured, and look-alike versions from other bridges can be different assets.