What is Layer Zero Labs and Should We Pay Attention?

A cryptic tweet was released last week from Animoca Insights that hinted at something happening over at Layer Zero Labs. They are building LayerZero, an omnichain interoperability protocol.

LayerZero is built to give applications full control over their own security settings including selecting their own oracle, relayer, validation library, and block confirmations. On November 30th, Layer Zero announced that Chainlink oracles were live on their mainnet and were now an option. 

What is Layer Zero and should we pay attention to it?

They claim to be “Interoperability that actually works.” The ability for applications to operate on multiple chains has been a problem plaguing the ecosystem for some time. In order for things to run cross-chain, communication has to occur. Layer Zero in a blog post explained that in order for cross chain bridging and messaging to happen either a middle chain or a light node is needed. 

A middle chain is inexpensive to run but less secure, and a light node is wildly expensive but more secure. Instead, Layer Zero offers a user application configurable on-chain endpoint that runs on an ultra-light node. It is inexpensive like a middle chain, but extremely secure like a light node. According to Layer Zero, when a user application sends a message from chain A to chain B, the message is routed through the endpoint on chain A. The endpoint then notifies the user application specified Oracle and Relayer of the message and its destination chain. The Oracle forwards the block header to the endpoint on chain B and the Relayer then submits the transaction proof. The proof is validated on the destination chain and the message is forwarded to the destination address.

Without boring you all with the details, what this means is messages can be sent cross chain securely and inexpensively with this technology. Within 7 months of operation, 1 million messages were sent.

LayerZero will connect all chains seamlessly, having users unaware they are even using it. It will enable current and new dApps to expand beyond the borders of Ethereum to offer onmichain applications. Cross chain swaps for example, ETH on Ethereum for SOL on Solana, can happen in a single transaction on the source chain. 

The cryptic tweet sent by Animoca Insights seemed to hint at some hacker house event in Hong Kong that involved Layer Zero Labs, Zellic.io, and osec.io. These two companies are designed to find and exploit risks in blockchain projects and we’ll be watching Layer Zero Labs to see what comes out of this endeavor.