The LayerZero ecosystem is forming very quickly and moving faster than most of the market is sensing. And in this article, I will go deeper into LayerZero’s ecosystem with everyone and look for potential projects for myself.
To better understand this article, people can refer to some of the following articles including:
- What is LayerZero? LayerZero Cryptocurrency Overview
- LayerZero’s Working Mechanism
- LayerZero Ecosystem: The Number of Projects Is Constantly Growing. Will It Open Up A New Trend?
- LayerZero & Wormhole: Some people are eight ounces, some people are half a pound
LayerZero Platform Overview
General introduction to LayerZero
LayerZero is a messaging platform between various Blockchains such as Ethereum, Avlanche, Polygon, Optimism, Arbitrum and many more. It should be noted that LayerZero only has a set of message broadcasting tools and does not have the function of transferring assets from one blockchain to another.
The highlight of projects applying LayerZero’s technology is that users can send native tokens from one blockchain and receive native tokens from another blockchain without having to receive an asset in a wrapped form with many security and payment risks. clause. That is the Omnichain concept first introduced by LayerZero.
LayerZero’s mechanism of action
The main components of LayerZero include:
- Endpoint: These are smart contracts mounted on blockchains that are mainly responsible for transmitting information between blockchains.
- Oracle: This is a service where LayerZero uses Chainlink’s service with the goal of verifying the correctness of messages before being transmitted.
- Relayer: Similar to Oracle, Relayer is also in charge of LayerZero’s security but will have many other tweaks.
The mechanism of operation and structure of LayerZero itself is extremely complex. You can learn more in-depth in the article How LayerZero Works.
Potential Projects on the LayerZero Ecosystem
Stargate Finance – The first bridge built by LayerZero
Stargate Finance is the first project built on LayerZero’s ecosystem by LayerZero’s own development team and Stargate Finance is a cross-chain solution. Currently, Stargate Finance is supporting a number of major blockchains such as Ethereum, BNB Chain, Avalance, Polygon, Arbitrum, Optimism, Fantom & Metis DAO.
It can be said that Stargate Finance is LayerZero’s strategic and practical product in the crypto market because LayerZero essentially does not perform the function of transferring assets, but only transmits messages between blockchains and ensures compliance. Those messages are correct.
Stargate Finance will also be a product that proves the effectiveness of LayerZero technology when in theory, it can be seen that LayerZero’s technology has differences and superiority compared to traditional bridge platforms that are popular on the market. school.
Besides, Stargate Finance is also supporting many types of assets such as ETH, STG, USDC, USDT,…
Currently, Stargate’s development situation is relatively optimistic as in March 2023 Stargate Finance witnessed a number of transactions reaching ATH levels. However, things do not stop there, the retro fever continues to spread to April 2023 when in just the first 12 days of the month, 1.1M trans were witnessed and will certainly not stop here.
According to my personal experience, I think Stargate has the following advantages and disadvantages:
|
Advantage |
Defect |
|---|---|
|
Stargate is relatively smooth to use |
The amount of fees is relatively high compared to another bridge platform. |
|
Receive native tokens from the other blockchain |
The average speed is neither the slowest bridge nor the fastest |
|
User-friendly UI UX |
Relatively few supporting assets. |
Lil Pudgy – The first NFT collection using LayerZero’s technology
Lil Pudgy is a junior collection of Pudgy Penguins that was extremely famous in the past when it changed ownership extremely successfully. Lil Pudgys includes 22,222 NFTs with different features such as skin, hats, shirts, handheld apps, equipment,… all of the above factors will create the rarity of an NFT.
Lil Pudgy has officially successfully integrated with Layer Zero allowing Lil Pudgy NFTs to be moved between many different blockchains such as BNB Chain, Polygon, Arbitrum and Ethereum.
Up to now, there are 22,222 NFTs including:
- Ethereum has 21,055 NFTs
- Arbitrum has 650 NFTs
- Polygon has 451 NFTs
- BNB Chain has 399 NFTs
However, bringing NFTs from blockchain to blockchain does not really make much sense when NFTFi pieces are mainly on Ethereum and are not strong on other blockchain platforms. At the time of writing if you transfer Lil Pudgy’s NFT from one blockchain to another without that NFT ever being passed on, you will receive a sounbond token from the project.
Trader Joe – The largest AMM is integrating LayerZero
February 2023: Trader Joe announced the successful integration of LayerZero with the goal of bringing native JOE tokens to many different blockchains such as Arbitrum, BNB Chain or Avalanche. Trader Joe also shared that this is just the beginning of JOE and that JOE will be available on more blockchains in the future.
Although Trader Joe did not share that in addition to JOE, this platform plans to integrate many other types of assets such as stablecoins, AVAX, ETH, BNB, ARB,… to help users carry their assets. providing liquidity on many different blockchains. I believe that JOE is just the initial experiment of the project and in the near future stablecoins may be added.
Let’s take a look at how JOE is currently distributed on blockchains:
- Avalanche: 483.607.735
- Arbitrum: 29,347,846
- BNB Chain: 1,330,001
It can be seen that JOE is being quite actively migrated to Arbitrum. However, bringing JOE to Arbitrum does not bring many benefits to users except retroactivity for LayerZero. That’s why Trader Joe should offer many solutions such as increasing incentives, increasing revenue sharing,…
Randiant Capital – Lending & Borrowing New style Cross-chain
Radiant Capital is one of the popular Lending & Borrowing platforms on the Arbitrum ecosystem. It allows users to deposit assets into the protocol for interest, and users can use that asset as collateral to borrow out more assets to earn profits.
Radiant Capital’s goal was relatively clear from the moment the project launched when it was identified as a platform. Radiant Capital is a Cross-chain Lending & Borrowing platform and uses LayerZero technology. That means users’ assets can earn profits on many different blockchain platforms,
At present, similar to Trader Joe, Radiant Capital only allows moving RDNT from Arbitrum to BNB Chain in the opposite direction. But I believe that in the long term, if the project continues and develops, it will integrate many different types of assets such as ETH, BTC, Stablecoin,…
Pontem – AMM of Super Layer 1 Aptos
The relationship between Aptos and LayerZero is deeper than ever as LayerZero has supported Aptos in building the first bridge for its ecosystem, Aptos Bridge, with the goal of bringing crypto assets from many different blockchains to Aptos. . Normally, Layer 1 will build its own bridge such as Arbitrum with Arbitrum Bridge, Near Protocol with Rainbow Bridge,…
Pontem – the first AMM on the Aptos ecosystem, is also one of the teams accompanying Aptos in the first days of launch and has integrated with Aptos Bridge to bring assets to Pontem.
Currently, Pontem is supporting many blockchains such as Polygon, BNB Chain, Arbitrum, Optimism,… along with a number of assets such as ETH, wETH, USDC, USDT, USDD, BTC.b and CAKE.
Some Projects Under Development
Rage Trade – Perpetual platform with huge ambitions
Rage Trade was also built by a number of members closely related to the Dopex team that I wrote about in the article Series 9: Real Builder in Winter | Dopex – Growing Amid Difficult Insects. Rage Trade is a Perpetual platform on Arbitrum specializing in Ethereum.
Rage Trade’s goal when integrating LayerZero is to be able to integrate ETH from all different blockchains such as Ethereum, Optimism, BNB Chain,… into its protocol, making its liquidity the highest, leading to low price slippage. Besides, Rage Trade also uses excess liquidity to provide liquidity for Curve to make profits, so the more ETH, the more profitable Rage Trade is.
Cedro Finance – Lending & Borrowing with omnichain vision
Cedro Finance is a Lenidng & Borrowing platform similar to Radiant Capital. In the future, Cedro Finance allows users to bring collateral from one blockchain to another or mortgage on one chain and borrow on another chain. . Then, the other person can return the money to another chain and get the collateral back on their original chain.
Besides, Cedro Finance also positions itself as a liquidity layer so that other protocols can build on its liquidity such as Stablecoin Omnichain, Lending & Borrowing Cross-chain, DEX Cross-chain, Credit Protocol, Perpetual Cross -chain,… It seems like a pretty bright future is being created by Cedro Finance.
Cashmere Labs – DEX Aggregator with cross-chain ambitions
According to the platform’s introduction, Cashmere Exchange is a MEV-resistant DEX and a StableSwap that allows users to trade any type of asset on any blockchain chain without the need for support. of bridge platforms.
Regarding the operating mechanism, I can explain briefly and easily to understand with the example of a user wanting to transfer ETH from Ethereum to ARB on Arbitrum, the way the project operates is as follows:
- Step 1: Cashmere Exchange transfers ETH to Stablecoin on Ethereum.
- Step 2: Using LayerZero technology, the message will be transmitted from Ethereum to Arbitrum.
- Step 3: Successfully transmitted message Cashmere Exchange at Arbitrum will swap stablecoin from the pool on Arbitrum to ARB and then pay it to the user.
It can be seen that this mechanism has eliminated the liquidity risk that would occur if wrapped assets were used.
Summary
Above are some outstanding projects on LayerZero’s ecosystem, besides there are many other potential projects that people can search for more on Weakhand’s website. And if LayerZero’s differentiating concept, omnichain, becomes a trend, pioneering projects will certainly benefit greatly.
