Key Takeaways:
- LayerZero, a firm that aims to solve the challenge of blockchain interoperability, has secured $135 million in a round headed by Andreessen Horowitz (a16z), the venture capital arm of crypto exchange FTX, and Sequoia Capital, with a $1 billion valuation.
- LayerZero is a protocol that connects decentralised applications (dapps) from several blockchains.
- Stargate, a cross-chain liquidity transfer mechanism, was just launched by the startup.
By performing transactions in a verifiable and permanent manner, blockchain technology has enormous possibilities for companies and services. It works as an open distributed ledger that allows two parties to record transactions. Adoption and application of blockchain technologies in many businesses and services, on the other hand, is a difficult undertaking.
What LayerZero offers?
According to the motto of ‘one chain to rule them all,’ many blockchain aficionados now predict that the industry will be made up of several separate blockchain networks that connect with one another. Users of iOS and Android can now make FaceTime calls. ,
“The longer term is multi-chain,” has become the latest cryptography catchphrase.
However, until recently, this was not possible because most of the big blockchains, including Bitcoin, Ethereum, Solana, and Avalanche, had moats between them, and clients had to choose a team. “We don’t have to make these decisions,” FTX Product Supervisor and FTX Ventures Investor Ramnik Arora believes.
By performing transactions in a verifiable and permanent manner, blockchain technology has enormous possibilities for companies and services. It works as an open distributed ledger that allows two parties to record transactions. Adoption and application of blockchain technologies in many businesses and services, on the other hand, is a difficult undertaking.
A one-year-old firm located mostly in Vancouver, Canada, has a market capitalization of $1 billion. Coinbase Ventures, PayPal Ventures, Tiger World, and Uniswap Labs are among the buyers. The company had previously raised $ 2 million in startup money and $ 6 million in collection funds. Binance Labs, Multicoin Capital, Sino World Capital, and others have contributed to the project.
The majority of cross-chain communication takes place today via “bridges,” which solve interoperability by locking assets on one chain and generating tokens of equal merit on the other. According to DeFi Lama, the Bridge protocol is now holding around $33 billion in cryptocurrencies.
Issues with existing “Bridges”
However, these bridges add to the amount of centralization and security vulnerabilities that have been abused to the tune of $ 1 billion in recent months. Only a few days ago, the world learned of a $ 600 million hack of the Ronin Bridge, an Ethereum-based network utilised in the popular online game Axie Infinity. After a February assault on the wormhole bridge between Solana and Ethereum, one of the many wormhole sponsors, Bounce Crypto, was finally reimbursed in the form of assistance. Caused.
In an alleged hack, Wormhole, one of the most popular bridges connecting the Ethereum and Solana blockchains, lost around $320 million.
It is the largest attack on Solana, a rival to Ethereum that is gradually gaining pace in the non-fungible token (NFT) and decentralized finance (DeFi) ecosystems, and it is DeFi’s second-largest exploit ever, barely after the $600 million Poly Network crypto theft.
In the world of DeFi, where programmable contracts can replace attorneys and bankers in some transactions, and NFTs, the two blockchains are popular.
Pellegrino declined to comment on the Ronin hack and its implications for LearZero when approached at this time.
Investors, on the other hand, believe that LayerZero will not be a victim of similar crimes. “We believed in the cross-chain future, but the technology to enable it was lacking – until we encountered LearZero,” said Michelle Bailey, a Sequoia partner.
LayerZero Labs’ main service, the LayerZero Protocol, which is now in beta, is described by Ryan Zarick, CTO and cofounder, as a communications layer that offers direct cross-chain communication. It’s a decentralised version of SWIFT, the key messaging infrastructure that handles $5 trillion in daily transactions over its 11,000 member network. Ethereum applications, for example, will soon be able to access liquidity on Serum, a decentralised exchange based on Solana, thanks to LayerZero.
LayerZero still includes a bridge called Stargate, but unlike previous projects, it relies on a token with the same name to handle property transfers. Stargate has a market capitalization of $ 3 billion and is now buying and selling for $ 3. Bridge sent over $ 264 million in donations in less than two weeks after its launch.
Achievements of Layer Zero
LayerZero now supports seven networks, including Ethereum, Avalanche, and Phantom, with more to come. “We’ll be on Solana and Terra for the next four weeks or so,” says the captain.
