Saturday, 20 April 2024

Crypto News

LayerZero’s multi-chain ecosystem grows as airdrop hunters ramp up their efforts

LayerZero’s multi-chain ecosystem grows as airdrop hunters ramp up their efforts

LayerZero is a communication method that facilitates cross-chain applications. Its low-level messaging capabilities enable the development of omni-chain functionalities on top of it, such as decentralized exchanges, money market protocols and numerous other DeFi applications that can benefit from cross-chain liquidity provisions.

The LayerZero platform was launched in September 2021 with Stargate Finance, a cross-chain bridge, as the first application built on it. The project raised $261 million in three funding rounds, doubling its valuation from $1 billion to $2 billionfrom March 2022 to March 2023.

Data analytics firm Nansen reported that decentralized applications (Dapps) built on LayerZero are some of the top-used entities across blockchain platforms like Aribtrum, Optimism, Ethereum, Binance Chain and Polygon.

In the first week of April, LayerZero-powered applications like Stargate and Radiant Finance were most used on Arbitrum and Optimism. On Polygon, Binance Chain and Ethereum, LayerZero and its applications ranked between 7th and 30th concerning user activity.

The primary motivation for the increasing adoption is the speculation around the native token airdrop of LayerZero. The team has included a mention of the ZRO token in their source code on Github, which makes an airdrop toward early users likely.

Mention of ZRO token in the official documentation of LayerZero. Source: LayerZero Gitbook

LayerZero ecosystem growth

Stargate Finance is the building block of the LayerZero ecosystem. The cross-chain bridge enables transfers between Ethereum, Binance Chain, Polygon, Aribtrum and Optimism with optimum liquidity and security. The total value locked (TVL) in Stargate pools is $419 million, per DeFiLlama data, second only to the Multichain protocol.

The LayerZero protocol has also been used to bridge isolated ecosystems like Aptos with Ethereum, demonstrating the messaging protocol’s ability to bridge incompatible ecosystems. There’s also a bridge exclusively for Wrapped Bitcoin (WBTC) transfers across Ethereum-compatible blockchains.

Besides bridges, the messaging protocol also finds application in decentralized exchanges…

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