The crypto exchange company has been partnering with top crypto companies to develop innovative technologies. Recently it partnered with Multicoin Capital to fund the LayerZero solution.
Binance Labs Together with Other Crypto Companies Fund LayerZero Solution
According to an announcement by the crypto exchange company on September 16, Binance Labs and Multicoin Capital have jointly led the $6 million funding of LayerZero – an omnichain interoperability protocol that integrates decentralized applications across the blockchain.
Different crypto companies also took part in the financing round and they are Sino Global Capital, Defiance, Delphi Digital, Robot Ventures, Spartan, Hypersphere Ventures, Protocol Ventures, Gen Block Capital and Echelon Capital also took part in
LayerZero is a new interoperability protocol that connects different blockchains. Interoperability depends on the passing of messages between chains; Current solutions achieve this through intermediate chains (hub-and-spoke model) such as Polkadot or the execution of pairs of on-chain light nodes as Cosmos IBC.
The former solution focuses security on a single hub and enables low-cost transactions at the expense of a single point of failure. The latter achieves a high level of security through on-chain verification but is both capital and resource-intensive. LayerZero will have the best of both solutions combined with the new on-chain “Ultra-Light Nodes” to achieve the security of light nodes with the cost-effectiveness of the mid-chain.
LayerZero Makes Different Networks Trading on Sushi Possible
Bryan Pellegrino, Co-Founder of LayerZero stated that due to high fees and changing investor preferences, DeFi applications have been deployed to multiple chains and this has caused serious fragmentation of the entire market.
He noted the ability to trade Ethereum, Moonbeam, Fantom, xDAI and Binance Smart Chain on Sushi, with more chains coming soon and while all of these uses are sushi, none of them is sushi.
LayerZero solves this problem by integrating cross-chain liquidity and enabling easy switching between different networks which makes trading possible.
LayerZero plans to support Ethereum, Binance Smart Chain, Polygon, Avalanche, Fantom, Arbitrum and Optimism at launch. It currently uses Chainlink and Band protocols for the oracle but is designed to be independent of the oracle.
In a few months of its release, it will add support for more EVM chains and non-EVM chains such as Solana, Polkadot and Algorand.
In an interview with Kyle Samani, managing partner of Multicoin Capital, stated that LayerZero paved the way for the first omnichain application and opened the door to credit, AMM, governance, etc. making it a true chain agnostic. He also noted that Dapp developers no longer have to write chain-specific code; instead, they can simply use LayerZero to develop an interface that sends messages to all chains that should be used.
LayerZero will use the new funds to evolve LayerZero endpoints across the ecosystem and promote the adoption of the protocol. The project is currently under review and is expected to start in the early fourth quarter of 2021.