LayerZero Integrates Chainlink Oracles, Expanding Decentralization of the Omnichain Communication Protocol
Today, we are pleased to announce that Chainlink has been integrated into the open and permissionless network of Oracles and Relayers which secure cross-chain messaging across LayerZero.
Before LayerZero, the Web3 industry was fragmented across a vast set of disparate blockchains. Applications were launched as single-chain and developers were forced to choose a popular, existing blockchain or take a gamble on the future success of an up-and-coming blockchain. With the advent of LayerZero, applications can finally be built everywhere, utilizing each chain’s best features, and ushering in a new era of applications: Omnichain dApps.
In general, blockchain technology is known for its strong security properties and resistance to outside attacks. However, different chains are designed with different strengths and consequent weaknesses; in a world where blockchains are connected, omnichain dApps are only as secure as their weakest link. Therefore the security of the underlying messaging protocol is paramount.
LayerZero achieves best-in-class messaging security with its non-upgradeable, permissionless smart contracts that perform on-chain validation of all messages. The protocol achieves this by utilizing an on-chain Ultra Light Node. As required by the protocol architecture, an oracle entity is responsible for delivering a block header and an independent relayer entity is accountable for submitting a transaction proof. This verification is performed on-chain, followed by the delivery and execution of the message. The oracle(s) and relayer(s) framework is entirely permissionless, allowing any application or individual to participate as one entity, however applications maintain agency and responsibility for selection of the participating entities. To achieve a secure, robust and decentralized messaging protocol, LayerZero offers omnichain dApps the optionality of a variety of oracles and relayers. To realize this goal, we are pleased to announce our integration of industry-standard oracle solution Chainlink as a major milestone in achieving the decentralization of the LayerZero protocol. LayerZero leverages Chainlink’s blockchain-agnostic oracles to provide a best-in-class security option for omnichain dApps.
Chainlink is the most time-tested, widely adopted, and flexible oracle solution in the market. Chainlink has a strong track record of security and reliability amidst major market volatility and network congestion, successfully helping secure billions of dollars in value for leading dApps, including Aave and Synthetix. Additionally, Chainlink is already integrated across many leading blockchains, and its External Adapter framework allows for quick expansion to additional chains as needed by our users.
Powering Omnichain Communication With Chainlink
LayerZero is an omnichain communication protocol designed to connect isolated blockchains and Layer-2 environments. LayerZero is purposely constructed to be the most lightweight client possible by avoiding reliance on cross-chain machine state replication. This design enables endpoints to be integrated on any blockchain without incurring prohibitive transaction costs.
At a high level, users can initiate a cross-chain transaction from chain A to chain B by sending a message to an on-chain endpoint on chain A. When a dApp selects Chainlink as its oracle, the endpoint receives a message, the Chainlink oracles fetch the block header data from chain A and send the information to the endpoint on chain B. Simultaneously, an independent relayer fetches the transaction proof on Chain A and sends it to Chain B. If both the block header and transaction proof are deemed valid– in other words, the independent oracle and relayer entities agree– then the smart contract will post a transaction. If the block header and the transaction proof do not match– one of the independent entities disagrees– the endpoint will disregard the message as invalid and revert.
Oracles play a crucial role in LayerZero’s validation process as they contribute half of the required information to help validate cross-chain transactions. Chainlink offers developers leveraging LayerZero technology one of the best suite of features to secure their cross-chain transactions and scale the protocol as a whole:
- Reliable Infrastructure — Chainlink oracles create redundancies to ensure oracle services are highly available, manipulation resistant, and precise.
- Secure Oracles — Chainlink offers a large pool of security-reviewed, Sybil-resistant node operators run by professional DevOps teams with a long track record of reliability even during unexpected on-chain and off-chain conditions.
- Transparent Monitoring — Robust, publicly available reputation frameworks and on-chain monitoring tools allow users to independently verify the historical performance of node operators and oracle networks, as well as check the real-time prices being offered.
- Universal Connectivity — Chainlink is permissionless, open-source infrastructure that is blockchain and API agnostic, enabling bidirectional communication between any blockchain environment, as well as triggering from any dApps or off-chain API.
Regarding the integration of Chainlink into LayerZero’s network of oracles and relayers, Bryan Pellegrino, Co-Founder and CEO of LayerZero Labs said, “Chainlink’s blockchain-agnostic capabilities and well-documented performance history made it a clear choice to help secure the oracle function of the LayerZero protocol.”
Exploring New Use Cases With LayerZero and Chainlink
By combining LayerZero’s omnichain communication protocol with Chainlink’s oracle network, omnichain dApps can create a host of new functionalities for their users. While not an exhaustive list, here are some of the novel capabilities this integration will enable:
- Universal Decentralized Finance
- Unlock Liquidity — Utilize your isolated assets to yield farm any pool on any blockchain environment.
- Multi-chain lending and borrowing — Lend and borrow assets across chains.
- Derivatives for every asset — Create derivatives contracts for any previously siloed token or currency.
- Transaction Optimization — High-throughput and computationally intensive dApps can offload their expensive transactions to a more cost-effective blockchain environment.
- Determine State — Easily verify the state of any blockchain or layer-2 system from a different blockchain.
“With LayerZero supported by Chainlink oracle networks, omnichain dApps will have the option to receive strong uptime and tamper-proof guarantees when relaying block header data between blockchains,” said Pellegrino, “The integration empowers a more decentralized, secure and scalable omnichain infrastructure for the entire smart contract economy. This integration highlights the expanding validation layer within LayerZero while maintaining the same simple framework and seamless experience for developers.”
About Chainlink
Chainlink is the industry-standard Web3 services platform that has enabled trillions of dollars in transaction volume across DeFi, insurance, gaming, NFTs, and other major industries. As the leading decentralized oracle network, Chainlink enables developers to build feature-rich Web3 applications with seamless access to real-world data and off-chain computation across any blockchain and provides global enterprises with a universal gateway to all blockchains.
Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.
About LayerZero
LayerZero is an omnichain interoperability protocol that allows dApps to build across multiple blockchains in a trustless, efficient manner. LayerZero connects dApps across chains using on-chain Ultra Light Nodes, which achieve the security of a light node with the cost-effectiveness of a middle-chain. Using the protocol, developers can turn their dApps into omnichain-applications using a single, simple interface. Learn more about LayerZero and explore documentation by visiting https://layerzero.network.
