LayerZero: Technology and Evaluation of Cross-Chain Interoperability Protocol

Introduction

LayerZero, as a cross-chain interoperability protocol, has seen its valuation soar to $3 billion in just one year, raising another $120 million in funding. This article will comprehensively outline LayerZero's technical principles, cross-chain lifecycle, and provide a comprehensive analysis of its advantages and disadvantages.

1. LayerZero Technology Principles

1.1 Overview

LayerZero is a trustless cross-chain communication protocol. It utilizes a lightweight node mechanism to separate trust components through relayers and oracles, achieving higher security at a lower cost. LayerZero focuses on message cross-chain rather than asset cross-chain, serving as a foundational protocol to support upper-layer applications.

1.2 Light Node Technology

Light nodes are a type of node operating mode that only saves block header information without storing specific transactions. The authenticity of transactions can be confirmed through Merkle tree verification. On-chain verification for light nodes can achieve high decentralization and security, but the cost is relatively high.

1.3 Ultra-Light Node Technology

Ultra-light node ( ULN ) performs the same validation as on-chain light nodes, but does not store all block headers in sequence; instead, it is transmitted on demand by oracles. This reduces costs but may sacrifice some security. Application scenarios need to weigh the pros and cons, such as social protocols that can adopt an optimistic execution model.

2. The Core Role of LayerZero in Cross-Chain

2.1 Positioning of Oracle and Relayer

The Oracle( is responsible for informing the target chain contract when to validate and the validation answer. The Relayer) provides the necessary proof and cross-chain information content for validation.

( 2.2 The division of labor between Oracle and Relayer

The oracle transmits the Blockhash and Block Receiptsroot of the cross-chain request from the source chain. The relayer transmits the Receipt and Merkle Proof path information for verification.

) 2.3 LayerZero's Cross-Chain Lifecycle

The cross-chain process involves multiple components such as user applications, communicators, validators, network layers, oracles, and relayers. By breaking down transactions and verifying the correctness of information, it is ultimately executed on the target chain.

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3. Evaluation of LayerZero protocol's advantages and disadvantages

( 3.1 Security Considerations

LayerZero allows applications to customize relayers and oracles, forming a many-to-many selection pattern to achieve decentralized supervision. The protocol itself does not store funds or data, reducing the risk of attacks. It has passed multiple security audits and established a large bug bounty.

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( 3.2 Advantages Compared to Other Protocol Layer Cross-Chain Products

• Stronger general scalability, supporting multiple chains
• Lower complexity for developer access
• Eliminate multi-chain fragmentation, support non-encapsulated assets

) 3.3 Summary

LayerZero, as an important infrastructure in a multi-chain landscape, has advantages such as high determinism and a clear business model. As a communication protocol embedded in various Dapps, it is expected to become an important cornerstone of the Web3 ecosystem.

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