Vitalik travelled across 7 chains to make his VISA payment: just with a click on Layer zer0
Before the internet bubble, private ethernet existed in lots of schools, companies and governments. Public isolated networks also existed, not until the internet came connecting all these networks together.
Fast-forward today, Blockchain emerges and someone just defined the standards and cracked the code for the perfect interoperability: Layer zero.
To clarify the relevance of this protocol, I would need to make an illustration using a real use case application of the blockchain:
So Vitalik an AVAX maximist, needs to make a VISA payment on ETH blockchain, unfortunately he’s left with no other alternative other than bridging his AVAX coins to ETH………
Vitalik thinks of using existing bridges like Synapse (n<token> pools e.g. nETH-ETH nUSD-stablecoins), Thorchain (RUNE pairs), AnySwap/Multichain etc. OHH NO!! This is so complex and open to be exploited.
Hmmm, thought of wrapping the assets?
Using the Avalanche’s native token bridge to bridge from AVAX to ETH and vice versa. He’s happy with the user experience, NO slippage, NO HIGH fees. I just need to transfer my AVAX to ETH which will be wrapped : the native assets are held in a smart contract on the AVAX side and wrapped versions issued on the ETH side. e.g. USDC → USDC.
Vitalik reads about the solana hack!!!, imagine if the smart contract controlling the assets on AVAX gets hacked and funds stolen.
Perhaps, he’s now left at the mercy of an interoperable omnichain: LAYER ZERO PROTOCOL.
Meanwhile, every existing cross-chain bridging and messaging protocol today makes use of MIDDLE-CHAIN VALIDATION or a LIGHT NODE ON-CHAIN. So you might be wondering which of these stuff is Layer zero made off, Right? The answer is NONE, because either of it means someone is gonna pay and you don’t want that right?
I will explain the costs in details: follow me
MIDDLE-CHAIN VALIDATION: poses risks on both chain ends
As a matter of fact, almost all cross-chain bridges rely on this protocol,
Just like Vitalik’s first thought on using Synapse or Thorchain etc. Middle-chains serve as the intermediate chain between the sender(SOURCE CHAIN) and receiver( DESTINATION CHIAN). So their mechanics of work is simply RECEIVE — VALIDATE — FORWARD MESSAGES between chains. For this to happen the MIDDLE CHAIN has to be successfully granted full signing power to all messages on the two chains(SOURCE-CHAIN and DESTINATION-CHAIN).
Boom an error occurs, a consensus corruption or even a hack, posing both chains and their sidelined liquidity at the mercy of a gracious hacker. We can all agree that todays bridging is typically giving up 2 balls to save 1/4 not even worth half of it.
Maybe the honeypot exploitation has already begun with Wormhole and others.
ON-CHAIN LIGHT-NODES? Vitalik, can’t afford the visa because of the high fees.
Using light nodes poses the workload of receiving and validating every block-header and pairwise chain on the opposing chain. Transaction proofs are forwarded and validated on chain in opposition to the block-headers.
This proves to be the most secure way to transmit between chains, However it is freaking expensive especially when running an on-chain light node on Ethereum. Unfortunately Vitalik can’t afford using this, because it costs as much as the visa payment.
ULTRA-LIGHT NODE: proves to be the solution to Vitalik’s VISA
Middle-chain is less-secure though inexpensive and still remains a vulnerable honey-pot while On-chain light-nodes is extremely secure but cost as much as its aim.
Ultra Light Node(ULN) is the hybrid solution with the security of a LIGHT NODE and the inexpensive feature of the MIDDLE-CHAIN.
How? Instead of getting validated on-chain in opposition to transaction proof, ULTRA LIGHT NODE validation occurs keeping block-headers streamed on demand by decentralized oracles: WELCOME TO LAYER ZERO: ULN communication protocol.
LAYER ZERO: Omnichain of interoperability
Layer Zero is a configured USER APPLICATION running on ULN. With Chain-link serving as the decentralized oracle, Layer zero communication protocol lies between two on-chain terminus: THE ORACLE and THE RELAYER. I will explain how it works in simple dummy terms.
mechanism of Action: Vitalik uses the Layer zero communication protocol to send a message from AVAXchain to ETH chain. The message dispel off the AVAX terminus. The AVAX terminus then quickly notifies the User Application(LAYER ZERO) specified Oracle and Relayer of the message and its destination chain, which is ETH chain.
Between the whole communication process, the Oracle forwards the block header to the ETH terminus and the Relayer then submits the transaction proof and the proof gets validated on the destination chain: The message is quickly forwarded to Vitalik’s ETHEREUM address.
Talk about Layer Zero’s Unified liquidity of all chains, disrupt in Defi……………
Stay tuned ON THE OMNICHAIN FUTURE!!!…..(To be continued).
Quick tip: You can always find me playing around in the telegram community 🤓🤓
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