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LayerZero Labs, the company behind the LayerZero protocol, has announced the launch of LayerZero V2, a major upgrade that aims to improve the security, throughput, and versatility of the cross-chain messaging platform. LayerZero V2 enables developers to create and deploy universal applications, tokens, and data primitives that can operate across more than 20 blockchains, without sacrificing decentralization, censorship resistance, or immutability.

What is LayerZero?

LayerZero is an omnichain solution that connects blockchains through the transmission of arbitrary messages, such as data, external function calls, and tokens. LayerZero allows developers to build applications that can interact with any chain, regardless of the underlying consensus mechanism, smart contract language, or token standard. LayerZero also provides a unified semantic framework for cross-chain development, including OApp (Omnichain Applications), OFT (Omnichain Fungible Tokens), and ONFT (Omnichain Non-Fungible Tokens) contracts.

LayerZero was launched in April 2023, after raising $120 million in funding from prominent investors, such as Polychain Capital, Andreessen Horowitz, and Coinbase Ventures. The project was valued at up to $3 billion at the time of the raise. LayerZero has since been working on developing and testing its protocol, as well as engaging with the community and potential partners.

What are the key features of LayerZero V2?

LayerZero V2 is the result of months of research, development, and testing by the LayerZero team. The upgrade introduces several new features and enhancements that make the protocol more robust, scalable, and flexible. Some of the key features of LayerZero V2 are:

• Universal Messaging: This feature allows the seamless sending and composition of various message types across more than 20 blockchains, including Ethereum, Binance Smart Chain, Solana, Polygon, Avalanche, and Cosmos. Universal Messaging also supports cross-chain token transfers, enabling users to move any token across any chain with minimal friction and fees.
• Modular Security: This feature allows developers to choose from over 20 Decentralized Verifier Networks (DVNs) for their preferred security level and verification method. DVNs are permissionless entities that verify cross-chain messages and provide proofs to the LayerZero protocol. Developers can also combine multiple DVNs in a modular fashion, using the X of Y of N scheme, to customize their security requirements and trade-offs. For instance, a developer can choose to require one specific DVN and two arbitrary DVNs out of a total of five to verify a message before execution.
• Permissionless Execution: This feature allows anyone to run an Executor, a permissionless role that facilitates the execution of cross-chain messages on the destination chain. Executors also simplify the gas payment process, as they can pay the gas fees on behalf of the sender and receive a reimbursement in any token. Executors can also offer customizable gas settings, such as gas price, gas limit, and gas token, to optimize the execution efficiency and cost.
• Unified Semantics: This feature provides a common interface and standard for cross-chain development, including OApp and OFT contracts that enable developers to build applications and tokens that function uniformly across all blockchains that LayerZero V2 supports. Unified Semantics also includes ONFT contracts, which will be released in the future, to enable the creation and transfer of cross-chain non-fungible tokens.

What are the benefits of LayerZero V2?

LayerZero V2 offers several benefits for developers, users, and the crypto ecosystem as a whole. Some of the benefits are:

• Interoperability: LayerZero V2 enables interoperability between multiple blockchains, allowing developers to leverage the best features and resources of each chain, and users to access a wider range of applications and services across the crypto space. LayerZero V2 also supports interoperability with other cross-chain solutions, such as Axelar and CCIP, through adapters that allow developers to integrate any type of native bridge, third-party bridge, middle chain, oracle, or other verification method into LayerZero.
• Security: LayerZero V2 provides a high level of security for cross-chain messages, as it relies on decentralized and immutable verification networks, rather than centralized oracles or custodians. LayerZero V2 also empowers developers to configure their own security stack, comprising DVNs, Executors, chain confirmations, MessageLibraries, and chain pathways, to suit their specific needs and preferences. LayerZero V2 also ensures censorship resistance, as no individual message can be executed until all previous messages have been verified, meaning no individual message can ever be censored on any pathway.
• Versatility: LayerZero V2 enables versatility for cross-chain development, as it supports any type of message, application, token, or data primitive, regardless of the chain. LayerZero V2 also provides a unified semantic framework for cross-chain development, including OApp, OFT, and ONFT contracts, that simplifies and standardizes the creation and deployment of universal applications and tokens. LayerZero V2 also guarantees a smooth transition for existing applications from V1 to V2, as they have migration options and can leverage the new security and execution model via Ultra-Light Node 301.

What are the next steps for LayerZero?

LayerZero V2 is currently live on 40+ testnets, and the project has released a technical whitepaper detailing the upgrade. The mainnet launch of LayerZero V2 is scheduled for January 2024, and the project has also announced plans to introduce a native token in Q1 2024. The native token will have various use cases within the protocol, such as governance, staking, rewards, and fees. LayerZero has also been engaging with the community and potential partners, such as dApps, exchanges, wallets, and other protocols, to foster adoption and collaboration.

LayerZero V2 is a significant milestone for the project and the crypto industry, as it represents a new era of omnichain development. LayerZero V2 aims to enable developers to create and configure unified applications, tokens, and data primitives, regardless of chain, through the transmission of arbitrary messages. LayerZero V2 also aims to provide a high level of security, throughput, and versatility for cross-chain messaging, without sacrificing decentralization, censorship resistance, or immutability. LayerZero V2 is a promising step towards leveraging the power of omnichain, the future of crypto.