LayerZero: Technical Principles and Evaluation of the Cross-Chain Interoperability Protocol

Preface

In just one year, the full-chain interoperability protocol LayerZero has raised $120 million again, with a valuation of $3 billion, which is three times that of the last round. This article will comprehensively sort out the technical principles of LayerZero and conduct a comprehensive analysis of it.

1. LayerZero Technical Principles

1.1 Overview

LayerZero is a trustless cross-chain communication protocol. It utilizes the principles of lightweight node technology to design an ultra-light node mechanism, splitting the intermediate trust links into two through relayers and oracles, achieving better security at a lower cost. LayerZero mainly provides cross-chain messaging functionality, rather than cross-chain asset transfers.

1.2 Light Node Technology

Light nodes are a type of node operating mode that only stores the headers of all historical blocks and does not store specific transaction information. The authenticity of transactions can be verified through the Merkle Root of the block headers. Using light nodes can achieve a high degree of decentralization, but the cross-chain costs are relatively high.

1.3 Ultra-Light Node Technology

The ultra-light node (ULN) performs the same validation as an on-chain light node, but does not retain all block headers in order; instead, it streams them on demand via decentralized oracles. This reduces costs but also sacrifices some security.

2. The Core Role of LayerZero in Cross-Chain

2.1 Positioning of Oracle and Relayer

Oracle( oracles) inform the target chain contracts when to verify and the verification answers. Relayer( relayers) provide the necessary proofs and cross-chain information content for verification.

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 to the target chain. The relayer transmits the Receipt and Merkle Proof path information to the target chain contract for verification.

2.3 LayerZero's cross-chain lifecycle

1. The user application initiates a cross-chain transaction.
2. Information transmitted to the validator and network layer
3. Oracles and relays obtain and transmit block headers and transaction proofs
4. Validator confirms transaction validity
5. The target chain executes cross-chain operations

3. Evaluation of LayerZero protocol

3.1 Security Considerations

LayerZero allows applications to customize relayers and oracles, forming a many-to-many selection pattern. Even if some nodes fail, the overall system can still remain secure. The protocol itself does not store funds or data, reducing the risk of attacks.

The advantages compared to other cross-chain protocols 3.2

• Stronger general extensibility: supports more inter-chain interoperability
• Lower developer access complexity: simplified the dApp access process
• Eliminate multi-chain fragmentation: unify the liquidity layer, support complex cross-chain operations

3.3 Summary

As a fundamental communication protocol, LayerZero holds an important position in the multi-chain ecosystem. Its low cost and high efficiency characteristics provide a solid foundation for cross-chain applications. Although there are compromises in security, further enhancement of overall security can be achieved through application layer fortification. The future development prospects are broad and worth continuous attention.