Blockchain Brief: LayerZero and the 'Omnichain', On-Chain Outlook, Edition #33 (11/04/2022)
Who you gonna call... gh0stlygh0sts?! 👻 Read on for the latest blockchain research feature covering LayerZero, Omnichain and the cutest Ghostly collection 👇
Q deep dives LayerZero, a new entrant into the Crypto-verse in tonight’s research. Receive more market analysis direct to your inbox 👇
Omnichain. The next hidden unicorn?
For today’s edition of the On-Chain Outlook, let us take a dive into LayerZero.
This new entrant into the cryptocurrency universe—otherwise known as the Cryptoverse—has been rightly seizing some attention in recent times.
As such, the buzz around LayerZero begs closer assessment by the Qluster Data Labs team. But first, it is helpful to gain an understanding of the technology…
What is LayerZero protocol?
LayerZero is an interoperability protocol that allows all chains to be connected. It enables new and existing users of Decentralised applications to connect to other chains, despite the nature of the current chain they are using.
In other words, Ethereum Virtual Machine (EVM) and non-EVM chains can connect and allow for interoperability, creating the world’s first ‘omnichain’ application.
Think of LayerZero as the glue between all blockchains… 😎
What are current LayerZero applications?
Since its inception a fortnight ago, it has surpassed a US$3.8 billion total value locked (TVL) and allowed for millions of cross-chain transfers.
More simply put, Stargate allows users to transfer tokens between chains.
For now, it allows transfers between 7 blockchains compatible with the Ethereum Virtual Machine (EVM): Ethereum, Avalanche, Polygon, BSC, Fantom, Arbitrum and Optimism. In the coming months, the team plans to add support for other chains like Solana, Terra, Cosmos Hub and Osmosis.
What are the advantages of LayerZero and what does this mean for NFTs?
Immediate advantages include:
Minting an NFT on a low gas chain (e.g. Solana or Near) and then transferring the NFT to your preferred chain (e.g. Ethereum)
Longer-term advantages include:
Combining the user base of multiple chains and allowing them to all play together
What is gh0stlygh0sts and how does it work across many chains?
gh0stlygh0sts is the first natively omnichain NFT.
The collection features an assortment of 10,000 ghosts. They were a ‘free mint’ that could be minted from any chain based on the below quantities:
How is gh0stlygh0sts omnichain?
The gh0stlygh0sts’ (GG) origin chain it was minted on is reflected in the background, whereas the current chain it resides on is reflected on the border.
The border is essentially updated each and every time the NFT is transferred between chains. When a GG is transferred, it burns the existing NFT and mints it on the destination chain, now making it native to that chain.
Note that gh0stlygh0sts is the first omnichain NFT to exist, making it an important historical asset for LayerZero and interoperability. If LayerZero continues to flourish, analysis suggests the value of gh0stlygh0sts NFT collection to thrive accordingly—based on having a first-mover advantage here.
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The value of interoperability brought by LayerZero and what they are working towards is sure to be a very exciting new development for the future of crypto.
The crypto world has always been broken up by maxis who believe their chain is the best. Though it is too early to say how successful omnichain will be long term and whether users stay for the long term, it looks as though the project is off to a remarkable start.
Needless to say—watch this space!
See you again for the next update.
Did you learn something new in tonight’s research feature? Let us know in the comments to help us deliver more quality crypto and blockchain research 🤗
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