Highlights:
- Developers can create specific sections of their dapps to utilise the capabilities of different blockchains by utilising LayerZero’s protocol.
- The LayerZero protocol aims to address the issue of the crypto ecosystem’s numerous blockchains, each of which tends to solve a different problem but cannot interact with others.
Cross-chain interoperability protocol startup LayerZero Labs Inc. revealed that it has received USD 120 million in fresh funding at a USD 3 billion valuation.
The latest Series B round triples LayerZero’s valuation from its previous USD 135 million financing round in March 2022. Thirty-three investors participated in the round, including Andreessen Horowitz’s cryptocurrency division, BOND, Circle Ventures, Samsung Next, Sequoia Capital, OKX Ventures, and OpenSea Ventures. The Christie’s auction house, renowned for selling pricey works of crypto art, also participated in the round.
LayerZero’s messaging protocol enables decentralized apps to communicate with each other across various blockchains. Its protocol platform facilitates flexible and trustless message delivery, allowing the programmers to quickly build dapps that can operate on multiple blockchains and still communicate.
Developers can create specific sections of their dapps to utilize the capabilities of different blockchains by utilizing LayerZero’s protocol. For keeping track of action-packed gameplay in one area of their app, a developer might use a highly scalable blockchain with low fees and high transaction rates, and for betting or storing in-game items, they might use a different blockchain that operates more slowly and with higher security.
Ryan Zarick, Co-founder and Chief Technology Officer of LayerZero Labs, said, “Imagine a future where a single user-facing application can harness the speed of Solana, the security of Ethereum, and the cheap file storage of Arweave, while also being fully abstracted to the user. The days of choosing one chain to build on are over; the future is omnichain applications.”
LayerZero’s protocol aims to address the issue of the crypto ecosystem’s numerous blockchains, each of which tends to solve a different problem but cannot interact with others. Developers now choose which blockchain they migrate to and lock themselves in, which has caused fragmentation.
Several multichain interoperability initiatives are also being developed; however, LayerZero contends they are inadequate. Examples include Cosmos IBC, which uses lightweight nodes, and Polkadot, a centralized solution with hub-and-spoke architecture. Due to Ethereum transaction fees, the former may lose security while the latter becomes more expensive.
In September 2021, the business began operations with USD 6 million in financing. Since then, the LayerZero protocol has transmitted over 2 million messages across 30 networks, locked in USD 7 billion, and handled over 6 billion transactions. The business reports that the platform has deployed more than 300,000 contracts on its testnet and 3,500 on its mainnet, in addition to more than 10,000 distinct apps and hundreds of thousands of unique users.
Some of the most well-known apps in the cryptocurrency sector, including the biggest decentralized crypto exchanges PancakeSwap, SushiSwap, TraderJoe, and Uniswap, use the company’s technology.
Zarick compared the development of blockchain technology to that of the Internet, saying that computers existed in fragmented and isolated data centers until a distributed networking system was developed to connect them. Zarick further said, “LayerZero is revolutionizing blockchains by creating one unified ecosystem, like the internet, that connects each blockchain’s developers and user community.”
