Layer Zero 

An elegant concept that entirely redefines the competitive landscape in the Layer O(L0) solution market, opening up new horizons for blockchain interoperability. The issue of transferring tokens from one network to another is a question that requires deep understanding and a comprehensive approach, and I strongly recommend taking a look at Bob GG post where he illustrates this issue from the perspective of an average user.

The main challenge is how to maintain decentralization and security while transferring funds from one blockchain to another, all the while minimizing the number of steps required for both projects and users. Centralized bridges serve as a temporary solution, but they have repeatedly undermined user trust due to numerous hacks.

Some market projects, such as Cosmos, Polkadot, and Avalanche, are trying to address this problem at the protocol level. Their proposal, in a nutshell, sounds like this: "Let's create all blockchains in a way that they can initially communicate with each other (transfer tokens and messages) using a certain bridge (another blockchain, so-called L0), which in turn will also be a blockchain with its validators, etc." However, this approach has a major downside - the need to persuade other blockchains to build on top of your LO from the start, and also, you can't integrate other blockchains without serious changes at their protocol levels.

LayerZero has revolutionized this field with its solution. Now, for the interoperability of blockchains that were initially incompatible, no changes at the protocol level are needed. Blockchains are connected via special nodes - deployed smart contracts in associated blockchains. LayerZero has no validators or its own blockchain. Security is ensured through a two-tier message transfer verification system using a receiver and an oracle.

Here's how it works:

1)The user sends their transaction in the Ethereum network with a request to transfer tokens to them in the Avalanche network. 2)The oracle (currently, LayerZero uses the Chainlink oracle network) transfers the header of this message to the Avalanche network. 3)The receiver transfers the hash of this message to the Avalanche network, and if it matches the header transferred by the oracle, the transaction is considered valid.

This approach spares these nodes from the need, as in other LO solutions, to store data on all blocks and continually validate them.

This simple solution maintains security and decentralization while allowing any network to easily connect to the LayerZero network. For the average user, this means getting the most convenient, simple, and affordable way to transfer their tokens from one network to another.

With such an elegant solution, it is possible to create a host of applications with cross-liquidity, such as decentralized exchanges (DEX), lending platforms, and more. Show Less