The First: Interpreting the Interchain Operation Protocol LayerZero

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Dec 13, 2023
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With the rise of DeFi projects, cross-chain interoperability has become a hot topic in the blockchain field. Among many cross-chain platforms, Layer Zero has attracted attention for its innovative technology and design. Recently, Layer Zero released a token airdrop plan, which has sparked community discussion. With the launch of its token on The First platform, it is bound to trigger a new round of airdrops and the outbreak of cross-chain ecology. Today, we will introduce the technology and characteristics of Layer Zero, as well as its current expansion ecology.
What is Layer Zero?
LayerZero is a trustless full-chain interoperability protocol, which is a communication platform between blockchains designed for cross-chain transmission of lightweight information. It provides real and guaranteed message transmission through configurable trustlessness. LayerZero provides a powerful underlying communication network structure, which can be used to build various cross-chain application assemblies, breaking the isolation of blockchains from each other. For developers, LayerZero can seamlessly link applications, eliminate barriers between different blockchains, and achieve efficient and accurate information exchange. For users, it allows transactions to be conducted between different chains, improving liquidity.
Unlike traditional single-asset cross-chain solutions, LayerZero cannot be simply understood as an asset cross-chain bridge. Instead, it is a lower-level infrastructure protocol than the L1 public chain, which enables higher-level message cross-chain to break through the island effect between chains. What LayerZero needs to do more is to build a richer cross-chain ecosystem based on the LayerZero protocol, providing a network infrastructure and message transmission layer for the entire chain ecosystem.
LayerZero's most prominent feature is its ultra-lightweight nodes, which use ultra-lightweight node technology to transmit messages between endpoints of different chains through relays and oracles, reducing costs while ensuring security.
(1) Ultra-light node
Firstly, each node in the blockchain network is actually the end point of each computer or server that stores data. Light nodes are just one mode of operation of nodes. Unlike full nodes, light nodes only store a small part of the blockchain data, such as block headers and other information, and do not store specific transaction information within the block. Compared with light nodes, ultra-light nodes have the same verification method as light nodes on the chain, but do not retain all block headers. Instead, they transmit streaming block headers on demand through oracles, thus more efficiently synchronizing off-chain entities to achieve the required state.
(2) Core components of LayerZero
According to the LayerZero white paper, there are two core components of LayerZero, namely oracle and relay.
The oracle is a third-party service that provides a mechanism component independent of other LayerZero. It can read a block header from one chain and send it to another chain, which can verify the validity of transactions on the source chain on the target chain. LayerZero uses Chainlink as its oracle.
A repeater is an off-chain service that is functionally similar to an oracle, but it does not obtain block headers, but rather proof of a specified transaction. To ensure effective delivery, the only requirement is that for any given message sent using the LayerZero protocol, the oracle and repeater must be independent of each other. LayerZero can even implement its own relay service. This design allows users to determine that the repeater cannot collude with the oracle, and this independence enables LayerZero to achieve trustless verification delivery.
The block header submitted by the oracle will be cross-validated with the transaction proof submitted by the relay, without forming any consensus, only transmitting messages. Simply put, the oracle acts as a notary in LayerZero cross-chain, letting the target chain know the verification result, while the relay is responsible for providing the proof process required to verify the transaction and the specific content of the cross-chain information.
(3) Operation mode
According to the LayerZero white paper, when transmitting a cross-chain message (such as from chain A to chain B), the smart contract of LayerZeroEndpoint needs to be called first. The ultra-light node on chain A receives this task and packages the message (transaction proof and block header) and the information destined for chain B, respectively, to remind the oracle and repeater outside the chain. Here, the oracle and repeater are independent of each other, and they cannot collude off-chain. The oracle obtains the block header information, and the repeater obtains the transaction proof. When the ultra-light node on chain B receives the block header message of the oracle, the repeater submits the corresponding transaction proof again. Only when the block header message and the proof message match, the real message content will be sent to chain B Complete cross-chain communication.
Both oracles and repeaters can be customized and configured. Users can only use LayerZero's light nodes, and then use repeaters different from LayerZero and oracles different from Chainlink.
As a hub for information transmission between chains, LayerZero can do more than just cross-chain asset transmission. After achieving cross-chain message transmission, LayerZero can also achieve cross-chain state sharing, lending, governance, etc.
In addition, unlike the traditional cross-chain bridge model currently on the market, LayerZero does not need to run nodes on each connected chain to monitor the state on the source chain, and hands over the role of the original validator to the oracle. An intuitive advantage here is that there is no need to deploy a new node on each new chain. Starting from this point, LayerZero can integrate new chains into the network faster and at a lower cost.
As a full-chain interoperability protocol to achieve cross-chain state sharing, lending, governance, etc., LayerZero currently supports more than 30 chains, including Ethereum, BNB Chain, Avalanche, Aptos, Polygon, Arbitrum, Optimism, and Fantom. The LayerZero ecosystem has rapidly expanded and has made significant progress in areas such as Defi, NFT, and cross-chain bridges.

LayerZero Token Economics
On June 20th, LayerZero announced token economics and its native asset ZRO token distribution plan. The total amount of ZRO is 1 billion tokens, including:
Community Allocation: 38.3% (383,000,000 ZRO) allocated to the LayerZero community, including users, developers, and community members;
Strategic Partners: 32.2% (322,000,000 ZRO) allocated to strategic partners for a period of 3 years, of which one year is locked and the following two years are unlocked monthly. Includes investors and advisors;
Core Contributors: 25.5% (255,000,000 ZRO) Allocated to core contributors (including current and future LayerZero Labs employees), subject to a three-year vesting period, which includes a one-year lock-up period and monthly unlock periods for the next two years;
Repurchase tokens: 4.0% tokens (40,000,000 ZRO) , which have been repurchased by LayerZero Labs and committed to the community pool.
With the development of blockchain, interoperability between chains has become extremely important, and secure, efficient, and seamless interaction must be achieved between each chain. As the underlying protocol, LayerZero's product design is different from the cross-chain bridge projects currently on the market. By using ultra-light node technology, it chooses oracle network instead of traditional cross-chain continuous streaming transmission, making the protocol more flexible and reducing costs. By launching ZRO, it not only meets the opportunity for The First platform to participate in the development of cross-chain ecology, but also provides reference for The First to explore the multi-chain ecological pattern, and creates a good foundation for future multi-chain wallets.