The crypto ecosystem always tries to release the latest innovations to either complement existing ones or improve them. Let's get acquainted with LayerZero's innovations in this article.
Understanding LayerZero
First launched in March 2022, LayerZero is a messaging system or infrastructure for bridges. Essentially, it is a cross chain communication protocol aimed at overcoming the current limitations plaguing omnichain activities.
How LayerZero Works
LayerZero has two important components for sending and verifying messages, namely Oracles and Relayers.
Oracle, It passes the block header (containing the root of the receipt or message). No oracle is specified, and can be the oracle of protocol choice. Meanwhile, the Relayer forwards proof of transaction.
Protocols that choose to build with LayerZero technology will have the freedom to control their security parameters. This means they can choose which oracles and relayers to rely on, making it a fairly modular process.
Advantages of Using LayerZero
Isolated Risk
Recent bridge exploit incidents are related to compromised relayers, which is further exacerbated by storing liquidity in a single pool. Instead, LayerZero isolates risks into “application-specific risks” rather than entire ecosystems.
To carry out an attack, collusion between the oracle and a specific relayer is required. Because the protocol can choose which oracles and relayers to use, potential exploits are limited to protocols that use the problematic oracle-relayer pair.
While attacks are still possible, the damage is greatly reduced, affecting only certain liquidity pools.
Efficient & Light
LayerZero prioritizes efficiency and designed the platform to be lightweight, by offloading the traditional task of fetching block headers to oracles and relayers off-chain, reducing storage space usage.
This design ensures scalability, considering the high costs associated with sending cross-chain messages on the L1 chain.
More Than Just an Asset Bridge
While many moving solutions focus primarily on transferring assets between chains, LayerZero broadens its scope by serving as a versatile cross-chain messaging platform.
This approach aims to achieve true composability, allowing a contract on one chain to be connected to any contract on another chain, opening up a new range of functionality that goes beyond simple asset transfers.
Also Read:
What is Layer 1 Blockchain? How Crypto Layer 1 Works and List
Layer 1 vs Layer 2 Blockchain, What's the Difference?
What is Layer 2 Blockchain? How Crypto Layer 2 Works and List
DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to
sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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