Original author: Grapefruit, ChainCatcher

Original author: Grapefruit, ChainCatcherLayerZeroRecently, cross-chain infrastructure

With a valuation of US$3 billion, it received US$120 million in Series B financing, making it a hot topic project in the encryption community again. According to RootData, an encrypted data platform, as of today, LayerZero has completed 3 rounds of financing with a total of 315 million US dollars, the first two were 6 million US dollars and 135 million US dollars respectively.

In an interview with the latest round of financing, LayerZero co-founder Bryan Pellegrino publicly stated that LayerZero will consider governance token airdrops after the protocol is developed, although it is not expected to happen soon.

Originally, LayerZero has been airdropped with high hopes by the encryption community because no currency has been issued. This financing has completely ignited the enthusiasm for airdrops. Research articles about LayerZero are flying all over the sky, various airdrop tutorials are spread in major communities, and some exchanges even launch exchange voucher collection activities about LayerZero’s future tokens. For example, on April 25, Bitget launched an LZBG airdrop event to support users with It will be exchanged for LayerZero official tokens in the future.

LayerZero interaction data has also exploded. According to Dune data, since April 4, the amount of interaction on the LayerZero chain has begun to surge. In the past two weeks, the number of transactions completed in a single day has exceeded 200,000, which is comparable to the number of daily transactions on the Optimism and Avalanche mainnet chains. (about 290,000 pens). Among them, Stargate, the official cross-chain product, has had around 150,000 transactions in the past two weeks, with a 24-hour transaction volume of around US$100 million and a TVL of US$440 million.

But regardless of the "traffic" expected to be brought by the airdrop, and returning to the product itself, has LayerZero really realized the innovation of the cross-chain bridge and really brought users a better cross-chain experience?StargateMany users have also reported that LayerZero products are expensive and have poor user experience. For example, when usingAptos BridgeWhen crossing chains, some users found that the actual amount received was less than the displayed amount, and the final fee calculation was much higher than other common cross-chain bridges such as MultiChain, Hop, etc. In addition, the cross-chain bridge developed by LayerZero

Users who do not understand the underlying technology do not care about the innovative mechanism of LayerZero, but pay more attention to the real user experience. If the functions of Stargate and other products are not updated and improved, a large number of users will be lost after the airdrop is expected.

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Overview of LayerZero Technology and Ecosystem

Well-known crypto capital such as a16z, Sequoia Capital, Coinbase Ventures, Binance Labs, and Multicoin Capital have basically participated in the financing of LayerZero. What is the magic of LayerZero to attract such capital support?

LayerZero itself is a cross-chain infrastructure rather than a cross-chain bridge, which can help users or developers realize the information transfer between different block networks, and can also realize the information transfer between DApps in different block networks, such as the A-chain The data and asset interaction information of DeFi applications can be passed to the DeFi applications on the B-chain. With LayerZero, developers can deploy DApp applications across multiple blockchains, and interact without cross-chain bridges, which is the so-called full-chain DApp.

Currently, LayerZero already supports information transfer between EVM chains such as Ethereum, BNB Chain, Polygon, Avalanche, Fantom, Arbitrum, Optimism, Metis, and non-EVM chains such as Aptos.

The current common cross-chain information communication methods are mainly divided into two categories. One is the intermediate chain, which builds an intermediate chain between the target chain and the source chain, such as Multichain. Under this mechanism, it is necessary to believe that the intermediate chain is a complete and reliable signature mechanism. In addition, the intermediate chain is easily broken by hackers; Delivery, such as Cosmos IBC. Using light nodes to transmit information is the most secure, but also the most expensive, currently running an on-chain light node on Ethereum costs tens of thousands of dollars per day for each opposing chain.

For example, if Xiao Ming wants to use LayerZero to send a message from chain A to chain B, he must first notify the oracle and repeater on chain A to send a message, and the oracle will send the relevant block header (summary of the latest transaction on chain A) to the ultra-light nodes of the B chain. The repeater will submit the transaction proof on chain A to chain B, and if both the block header and the transaction proof are considered valid, the message can be sent to the receiver on chain B. If the block header and transaction proof do not match, the message will be ignored.

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LayerZero node

Through LayerZero, not only cross-chain assets can be realized, but also cross-chain state sharing, lending, governance, etc. can be realized after cross-chain message transmission is realized, which is also the so-called full chain. Today, Layerzero has deployed and explored in fields such as cross-chain DEX, multi-chain lending, and stable coins.

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Layerzero ecological products:

The official cross-chain bridge Stargate—supports native asset cross-chain.

USDC Bridge - a USDC native assets full-chain bridge cross-chain jointly developed by Layerzero and Circle.

Aptos Bridge - a cross-chain bridge customized by Layerzero and Liquidswap DEX, supporting asset cross-chain between Aptos ecology and BNB Chain, Polygon and other networks

BTC.b (Bitcoin Bridge) - a bridge specially built for BTC assets, which supports the seamless integration of BTC in the network supported by LayerZero

Testnet Bridge - is a public product launched by LayerZero for developers. Developers can exchange for ETH on Ethereum through the GETH bridge of the Ethereum Goerli testnet.

Rage Trade - is a derivatives exchange built on LayerZero, users can trade futures or options on this platform.

Multi-chain lending RadiantCapital - a multi-chain lending project deployed on Arbitrum based on LayerZero.

Multi-chain NFT project gh 0 stlygh 0 sts - a LayerZero-based full-chain NFT that supports transfer between different chains.

In addition, Sushiswap, Pancakeswap, TradeJoe, and HashFlow have officially integrated LayerZero and adopted Stargate for cross-chain DEX development.

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The security of LayerZero has been questioned many times

Although LayerZero has many advantages, some developers still question it. Although LayerZero is ingeniously designed, there are still loopholes, such as the possibility of joint evil between the oracle and the repeater, or the delay of oracle information.

In fact, the safety of LayerZero has never stopped questioning. In January of this year, L 2B eat used an experiment to crack LayerZero's claim that "its design eliminates the possibility of collusion between oracles and repeaters." The modification authority of the repeater makes it possible for hackers to attack at will after obtaining the authority. This makes LayerZero rely on two off-chain components, the relay and the oracle, to transmit messages between different chains. Users must trust that the relay and the oracle will not conspire to do evil, and they must also trust that the protocol itself will not cause harm to the Relayer . However, according to the experiments of L2B EAT and others, in LayerZero's architecture, repeaters and oracles can be changed, and attackers can extract underlying assets by changing repeaters and oracles at any time.

Prior to this, in March 2022, Shenyu's Cobo blockchain security team issued a document stating that there was a loophole in LayerZero, which could affect the assets of all cross-chain projects built on LayerZero. Although the LayerZero project party has fixed the vulnerability, the possibility of other exploited vulnerabilities cannot be ruled out. In addition, it is added that most of the key contracts of the LayerZero project are currently controlled by EOA, and no multi-signature mechanism or time lock mechanism (TimeLock) is adopted. If the private keys of these privileged EOAs are leaked, the assets of all upper-layer protocols may also be affected. As of today, LayerZero officials have not explained this.

However, some users said that the current project technology is not the most important thing. As the underlying infrastructure, the project’s operational capabilities and ecology are more tested. Judging from today’s ecological development and market influence, LayerZero is undoubtedly successful .

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Stargate Becomes a "Cross-chain Assassin": Expensive and Opaque

For ordinary users, in addition to the security of the cross-chain bridge, the most intuitive evaluation of the product comes from the experience. At present, there are far more praises for LayerZero than criticisms in the market, but in fact, there are many shortcomings in the use of LayerZero-related ecological products.

For example, Stargate, as an official product based on LayerZero, has naturally become an important main battlefield for airdrop interaction, but it has also become the most controversial product in the LayerZero ecosystem.

Launched in March 2022, Stargate is the first cross-chain application based on LayerZero, mainly focusing on the cross-chain of native assets.

Stargate believes that the current cross-chain bridge also has an "impossible triangle", that is, "the immediacy of cross-chain asset transfer", "the unity of the cross-chain liquidity pool", and "the originality of assets after cross-chain transfer". Of the three elements, only one or two can be satisfied in the current cross-chain facilities. Stargate claims to be able to solve this "impossible triangle" and realize the timely arrival of native assets.

Currently, Stargate has been launched on Ethereum, Avalanche, Polygon, BNB Chain, Fantom, Arbitrum, Optimism, and Metis, and supports native assets such as USDT, USDC, ETH, FRAX, DAI, and BUSD to be transferred between different blockchain networks.

Users' biggest dissatisfaction with Stargate mainly centers on the cost. Because the actual amount received when using Stargate cross-chain is less than the displayed amount, the final fee calculation is much higher than other common cross-chain bridges such as MultiChain and Hop. Is Stargate deliberately hiding the real cross-chain fees to attract users?

Generally, the cross-chain bridge will deduct the handling fee and on-chain GAS fee from the cross-chain amount, and the displayed cross-chain amount is also the amount after deducting the on-chain GAS fee and handling fee. 100 USDC is cross-chained to Ethereum, and the displayed amount is 60 U, which is the final amount after deducting the 0.1% handling fee of the platform and the gas fee on the Ethereum chain.

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Multichain cross-chain fees

However, in Stargate, the amount displayed is the highest. Only the handling fee charged by the platform is deducted, and the on-chain GAS paid is not deducted. When Stargate cross-chains, the target chain GAS fee is paid by the source chain token.

For example, if you cross-chain the USDC on Fantom to Ethereum, the Stargate page shows that you have received 99.94 USDC, but you will see it when you click on the fee details page, and you need to pay an additional 79.61 FTM as the gas fee on the chain. This fee is still estimated The amount paid in the actual cross-chain may be higher. For example, the final gas fee paid for this cross-chain is 79.8 FTM. After deducting the source chain GAS fee (0.15 FTM), the target chain Gas (79.77 FTM) needs to be paid. FTM), in fact, the final amount received is (99.94 USDC-79.61 FTM), and the actual amount received is about 67 USDC.

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Stargate cross-chain fees

In addition, Stargate's charging details are generally not actively displayed. In the early days, there were even no details at all. Users need to click the small triangle symbol below the amount to see the charging details. This will lead many users to think that the displayed amount is the final payment When paying the GAS fee, it is discovered that it takes a huge amount of money, which makes the user feel cheated. Therefore, Stargate is called a hidden "cross-chain assassin" by users.

NANA, a player on the chain, once said in the community: "When I used Stargate to cross-chain ETH from Arbitrum to Ethereum, I didn't notice it because the fee was ETH, but when I cross-chain from Fantom, the GAS fee payment token is different, and I paid it at once. Dozens of FTMs were taken aback and never used Stargate again."

There is also the Aptos Bridge cross-chain bridge jointly developed by LayerZero and Liquidswap DEX. It is easy for assets to enter Aptos, but it is difficult to exit. It only takes a few minutes for users to recharge assets to Aptos, but it takes at least 500,000 blocks after confirmation to withdraw from Aptos to other chains To complete, it will take about 2-3 days, and even 1 million block confirmations are required in the early stage. The exit time of Wormhole and Celer, which also support Aptos ecological cross-chain, is instant. Although the official statement is based on safety considerations, in this era when efficiency is king, slow time is the biggest fatal injury.

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Aptos Bridge cross-chain bridge

As a result, more and more users expressed on social media that if it was not for airdrops, cross-chain bridges with low fees and fast arrival times would definitely be preferred, and Stargate and Aptos Bridge would not be used at all. The reason why they use them now is that Enduring its high fees is for its airdrops.

Most users do not care whether the cross-chain assets are native assets, but pay more attention to the cross-chain fees and arrival time. However, compared with other third-party cross-chain bridges, Stargate has no obvious advantages in these two aspects. It can also be seen from the current data that the user frequency of LayerZero is not high, and the number of transactions is less than 5 times, accounting for 61.9% of the total transaction volume. Among them, Stargate's cross-chain funds are mainly concentrated below 500 USD, accounting for 61.9% of the total transaction volume. 69.5%.

Stargate has been online for 1 year, but there has been no improvement in the charging mechanism. However, among the proposals for the upgraded version of Stargate V2 on March 15, one of the proposals will optimize the gas fee on the chain, which has won the support of many community users.