Is LayerZero a bridge or something more?
Is sending messages the future of cross-chain communication?
LayerZero presents itself as a “messaging layer”, allowing applications on different blockchains to interact together. Imagine it like this; a messaging layer, nestled beneath various blockchains, capable of seamlessly transporting messages across chains. It's like the conductor orchestrating a symphony of interconnected blockchains, not just a mere bridge connecting lonely islands.
You know those frustrating times when you had to bridge from one blockchain to another, navigating through multiple sites, juggling tokens on different dApps, praying you don’t mess up a single step? Yeah, we didn't enjoy those either. That's where LayerZero swoops in with a heroic solution. This omnichain liquidity layer acts as a hub, knitting different blockchains together into a seamless multi-chain experience.
For one, the numbers already speak for themselves. LayerZero has achieved an impressive valuation of over $3 billion after undergoing over 35 audits and seamlessly processing 50 million cross-chain interactions between blockchains, and embraced by over 3 million unique users. I guess it’s safe to say that people enjoy this…
LayerZero has created DeFi’s most secure bridge ever because it is not a bridge at all.
So how exactly does it work?
Connecting blockchains securely is a major challenge. One issue is that storing on-chain data is expensive. A second problem is security - interacting with the chain via bridges creates extra points of failure, something that DeFi has struggled with time and time again as bridges continue to be exploited or hacked.
Two models with very different approaches to tackling the above problems are on-chain light nodes, which are deemed the most secure, and middle chains, which are the fastest. On-chain light nodes involve running simplified versions of a blockchain's node directly on the main chain. While these provide robust security, they can be resource-intensive and require significant computation power.
In contrast, middle chains, also known as relay or hub chains, act as intermediaries between multiple blockchains. They facilitate faster transactions by aggregating and batching transfers before confirming them on the main chain. However, this approach introduces a level of centralization and potential reliance on the middle chain's security.
LayerZero has put forth its elegant solution: Ultra. Light. Nodes, or ULNs for short. These incorporate the best of both worlds without making any sacrifices. They allow the security of light nodes to coincide with the cost-effectiveness of middle chains.
How is this possible? They work by executing validations the same way as on-chain light nodes, but instead of keeping all block headers sequentially, they stream the blocks on demand from decentralized oracles (ie. Chainlink, Pyth), enhancing their resistance to censorship. Think of block headers as digital receipts, that are way more cost-effective to keep rather than the entire data.
Enter LayerZero with its Ultra Light Node v2 (ULNv2). This hinges on two parties for validation, the Oracle and Relayer, which work together to transfer messages across various on-chain waypoints. When messaging between chains, they follow a route from the source chain’s endpoint to ULNv2’s validation library.
Now onto the really cool part. The ULNv2 library plays messenger, notifying the Oracle and Relayer of the message and its destination. The Oracle forwards the packet hash to the endpoint on chain B, and the Relayer submits the packet to be verified on-chain against the hash and delivers the message.
FWIW, oracles are any system that takes a block header and submits it to the destination, and relayers are any system that takes transaction proofs & submits it to the destination. They can come in any form and be as complex as they need to be. Choice lives at the application layer.
Valid delivery is a fundamental property of creating trustless inter-chain communication. It ensures that every message sent over the network is associated with a valid transaction and is delivered only when the transaction is committed on the sender-side chain.
What does this all mean for WOOFi?
WOOFi has already taken a huge leap forward and lightened the load for users with our creation of seamless one-click cross-chain swaps, all thanks to the power of LayerZero. Given the rise of layer 2 solutions (each with its own benefits), it’s prominent that the safe connection of these L2s becomes paramount.
The ingenuity of WOOFi doesn't stop there. We’ve introduced omnichain $WOO staking mechanics, which bid farewell to the inefficiencies tied to varying yields on different chains. Like an orchestra in harmony, WOOFi unifies all yields together, making it possible to stake on any supported chain, while being rewarded the same yield as any other.
As the adoption of LayerZero gains prominence, WOOFi is dedicated to nurturing the growth of this ecosystem.
Ultimately, progressing towards a multi-chain, multi-layer world is where crypto is headed in the not-so-distant future. At WOOFi, our mission is clear: create an omnichain liquidity layer that fuses user experience into a singular multichain dApp. The synergy with LayerZero fits like a glove, creating a seamless partnership that drives the landscape of crypto to unity.
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