Interviewee: Irene Wu, Strategic Director of LayerZero

Interviewers: kit, flowie, ChainCatcher

Editor's note: The cryptocurrency data platform RootData, in collaboration with ChainCatcher, has released the "2023 Web3 Industry Development Research Report and Annual Rankings" (click the link to view the full report and rankings). The report provides a detailed analysis and interpretation of the development of the Web3 industry over the past year, covering the overall trends of the Web3 industry, characteristics of Web3 asset development and sector trend analysis, characteristics and trends of Web3 fund flows, and the 2023 RootData List of the four major sectors.

In the fourth section, the report selects multiple rankings based on the annual performance of Web3 projects and investment institutions, including the Top 50 projects in the Web3 industry, the Top 100 investment institutions, and the Top 20 projects in sub-sectors such as infrastructure, DeFi, and gaming.

In the cryptocurrency field, the speed at which unicorns are produced is faster than any previous industry, and LayerZero is one of the representatives.

In 2020, when the BNB chain was just launched, three gaming enthusiasts wanted to build a multi-chain game that could run on both Ethereum and the BNB chain, but it ended in failure. One year later, they entered the cross-chain track, and a future unicorn project, LayerZero, was born.

By deploying "super light nodes" on various chains and innovatively using oracles and relays, LayerZero quickly became a rising star in the cross-chain field and gained favor from many top-tier investment institutions such as a16z Crypto, Sequoia Capital, and Binance Labs. Since its establishment, LayerZero has raised nearly $300 million in three rounds of financing. After completing a $120 million financing in April 2023, its valuation reached $3 billion.

However, almost at the same time, LayerZero encountered a series of challenges. In March 2023, LayerZero received strong support from a16z in a cross-chain bridge vote, but was accused of being overly centralized. The following month, LayerZero's official cross-chain bridge, Stargate, was criticized as a "cross-chain assassin" for its high and opaque fees. In October 2023, LayerZero's newly launched wstETH wrapping feature faced joint resistance from peers such as Connext and Across.

In November 2023, the mystery of the "SSL certificate," symbolizing airdrop signs, once again sparked dissatisfaction with LayerZero's management within the community. In addition, technically, LayerZero has always faced multiple tests in decentralization and security.

After facing much scrutiny, in January 2024, LayerZero announced the launch of V2, intending to address the criticized issues of decentralization and security.

On February 1st, ChainCatcher interviewed Irene, the strategic director of LayerZero Labs, to attempt to address the aforementioned questions.

After graduating with a degree in computer science specializing in anti-surveillance and law enforcement technology, Irene joined a startup men's clothing company, where she was introduced to Bitcoin by two angel investors from Gemini. She then joined LayerZero Labs in 2021 as a strategic director, leading the business development and integration team.

In addition to discussing LayerZero itself, Irene also hopes to attract more outstanding talents from the Web2 industry to join the Web3 industry and jointly promote its development.

What are the key issues addressed in LayerZero V2?

1. ChainCatcher: LayerZero recently announced the technical whitepaper for the V2 version. What key issues will the new version address? How will V2 address the criticized issues of centralization and security at LayerZero? What is the current deployment progress of V2?

Irene: LayerZero V1 has already transmitted over a billion messages, transferred funds exceeding $500 billion, and integrated thousands of applications. Its design and architecture have always been based on three principles: permissionless, censorship-resistant, and immutable.

Through running LayerZero V1, we did receive some of the feedback you mentioned, and we have been considering how to continue developing and serving developers. In the past, we achieved cross-chain verification and message execution through oracles and relays. However, this off-chain entity does pose security risks, which has been challenging for our team.

We hope to ensure security through ZK-proofs for these oracles and relays.

To lower the barrier to entry, we need to build a new architecture for LayerZero V2, allowing developers to more easily run one of the components and implement an out-of-the-box verification method.

In the whitepaper for LayerZero V2, everyone can see that we are attempting to address various issues related to decentralization, security, and downtime.

LayerZero V2 is a message transmission protocol, not a blockchain. LayerZero utilizes smart contracts deployed on each chain, combined with a decentralized verification network (DVN) and an executor, to enable interaction between different blockchains. It also introduces a very lightweight approach, allowing teams to run their own DVN or use native bridges. Layer2 solutions like Arbitrum, third-party bridges like Wormhole and Axelar, and even MPC wallets can all serve as DVNs.

Furthermore, a series of optimizations have been made for developers' experience.

2. ChainCatcher: You mentioned Connext, Wormhole, Axelar, and many other types of cross-chain interoperability protocols. What are the differentiation and advantages of LayerZero compared to them? What are the common challenges faced by the industry in addressing cross-chain interoperability?

Irene: I'll address the second question first. LayerZero was inspired by gaming, and our three founders are gamers. When the BNB chain was just launched, they were contemplating how to build a game that could run on both Ethereum and the BNB chain, enabling interoperability between the two chains. At that time, the only existing cross-chain facility was achieved through off-chain asset wrapping.

In 2023, many users may have developed PTSD due to MultiChain. In the past few years, all hacking attacks have been caused by this method of bridging through asset wrapping, which was the hottest method three years ago and was the first step taken by blockchain in interoperability.

Therefore, LayerZero is not just aiming to create a simple cross-chain bridge; it is the infrastructure for cross-chain communication. In fact, there can be more functionalities under the cross-chain bridge, and the cross-chain bridge is just one of its use cases.

Furthermore, achieving cross-chain interoperability is like building the former internet, with constantly emerging upper-layer applications and security issues, and a growing codebase. How to ensure both open innovation at the upper layer and a solid "foundation" is very challenging.

The difference between us and protocols like Connext, Wormhole, and Axelar is that they are addressing the verification layer, while we are addressing the message transmission layer within an immutable framework.

We are not dogmatic about the verification layer and do not dictate how developers should verify their messages, because blockchain technology has millions of different use cases, each requiring different levels of security. We want to maintain an open and open-source ecosystem.

"We are often misunderstood due to governance issues"

3. ChainCatcher: In October 2023, LayerZero introduced the wrapped stETH (wstETH) transfer function for Lido Finance on chains such as Ethereum and Avalanche, integrating the LayerZero On-Chain Token (OFT) standard. What was the original intention behind this feature? How does LayerZero view the joint resistance from multiple peers and the community's governance concerns, and does LayerZero have any reflection and improvement plans regarding this?

Irene: First and foremost, at LayerZero, we believe in and aim to protect the spirit of permissionless deployment, which is one of the reasons why we are building in the crypto space. Developers should be able to use the technology and create the content they love, edit existing protocols, and do so without the "permission" of banks or social oligarchs.

Lido, like LayerZero and Uniswap, enables permissionless deployment. I don't think this should be stopped. The misunderstanding arises from governance issues on our part, as the community believes we made no declaration before deployment, making it look malicious. But in reality, it has always been permissionless, and we are very grateful for the active collaboration with the Lido team for over a year.

We are also excited that many tokens on chains such as Ethereum and Avalanche are using the LayerZero On-Chain Token (OFT) standard, which has been adopted by hundreds of top protocols. With the V2 upgrade, they can inherit new security specifications.

Additionally, I need to emphasize that LayerZero does not compete with Connext, Across, and Celer Network. If a team wants to use Connext, Across, and Celer Network as part of their verification layer, they can do so within LayerZero, and we welcome that.

4. ChainCatcher: LayerZero's official cross-chain bridge, Stargate, was previously criticized for being expensive and having opaque fees. How does LayerZero view this, and are there any adjustment plans?

Irene: About 6 months ago, LayerZero founder Bryan Pellegrino proposed the idea of launching Stargate V2, a major upgrade for Stargate, is on the horizon.

Regarding the fee issue, Stargate handles many unique functions on-chain and is one of the most widely used native cross-chain bridges in the crypto space, serving as the primary means for crypto users to enter and exit Base, Optimism, and Arbitrum. These contracts have consistently been among the top ten most expensive in terms of gas. It is typically more expensive to cross from Ethereum to other chains or from other chains back to Ethereum.

While some cross-chain bridges may have lower gas fees, they may have lower security and are functionally basic, handling fewer quotes on-chain.

I cannot reveal too much about the upgrade at the moment, but Stargate is hard at work, and we look forward to incredible optimizations based on all this feedback.

5. ChainCatcher: LayerZero announced the completion of token issuance in the first half of 2024 in December, but has not yet disclosed a more specific airdrop snapshot time and token distribution plan. Is there a more definite timeline now?

Irene: We have announced on the official X platform that there will be a token launched this year, with the latest launch date being June 30th or July 1st.

6. ChainCatcher: LayerZero has faced a lot of community dissatisfaction due to the progress on tokens and airdrops. How does LayerZero view this dissatisfaction from the community? What factors will you focus on in deciding the airdrop and token issuance timing?

Irene: We have always shared information about the token at the earliest opportunity. Frankly, we are a team mostly composed of engineers who have been focused on building for the past two years, trying to build complex infrastructure while also aiming to design an excellent token launch, which often encounters some obstacles. We prioritize developing the product to meet the needs of developers and ensure its exceptional quality, so that when the token is launched, it does not pose any challenges. Instead, it becomes a source of pride for us.

It is important to us, and the token issuance method is critical for any crypto project. We want to do it to the best of our ability, which is why we take the time to do it.

7. ChainCatcher: The expected airdrop has incentivized user participation in LayerZero interactions. After the airdrop, what are LayerZero's plans to retain and incentivize users?

Irene: LayerZero is a protocol for developers, not just a bridge for users, so it caters specifically to the needs of developers. There are many talented individuals in the ecosystem, and we are honored to observe the projects they are building on LayerZero and brainstorm with them.

We focus on developers' love for the protocol and the importance of end-user product usage experience, whether it's through games integrating blockchain assets using LayerZero or seamless transfer of stablecoins, and cross-chain lending using LayerZero.

Additionally, contributors to decentralized protocols are also important. With the launch of the V2 testnet, we announced that there will be 14 initial validators, including the decentralized verification network (DVN), operated by teams including Getcoin, one of Ethereum's most prominent execution clients for many years, and a thought leader in Ethereum grants and public goods construction. These teams are also very valuable for a healthy ecosystem.

Data Growth Exceeds Expectations

8. ChainCatcher: What is LayerZero's roadmap for 2024? What are the most important work goals? What are the plans for ecosystem incentives?

Irene: Currently, we are actively developing some important new products. It is crucial for the successful launch of these products and to receive feedback from the right audience. The V2 version has been in the works for a year, and I am eagerly looking forward to valuable feedback from developers, users, and non-technical individuals.

I also want to convey through ChainCatcher that I am always open to receiving direct messages and am happy to answer questions and listen to everyone's thoughts.

The first integrated LayerZero product is now live, called Cluster Canister, developed by a non-technical team at Twitter and led by Fu Bar. Essentially, it is a universal domain that integrates LayerZero and Layer2, unifying wallet addresses on multiple chains under one identity.

9. ChainCatcher: What do you think the team's biggest achievement has been in the past year? What did you do right?

Irene: The only achievement that comes to mind is far beyond all our expectations for data volume. We never anticipated that in just over a year since the protocol went live in May 2022, we would generate over 100 million messages, when we originally expected no more than 15 million. This data comes from real projects with real users and very useful use cases. They are stablecoins, games, protocols, and enterprise projects, and JP Morgan even integrated LayerZero and used it for their project monitoring, which is another thing that truly excites us.

Additionally, we launched the B2 testnet in December last year, with 52 chains in a world with hundreds of app chain players. LayerZero is ready to connect them all into a mesh network.

We have expanded the team and hired many outstanding individuals, including some great researchers.

10. ChainCatcher: What has enabled the LayerZero team to grow rapidly, complete construction, and continue to grow in the industry?

Irene: Both the team building products for users and the team building infrastructure are important. There is no room for error when building critical infrastructure, especially when deploying immutable contracts, as once thoroughly tested and deployed, there is no turning back to fix issues. Therefore, a hardcore team that loves solving challenging problems is needed to ensure continuous improvement.

11. ChainCatcher: What are the current industry issues that the team is most concerned about? What is your assessment of the crypto market in 2024?

Irene: Personally, and not on behalf of LayerZero, I believe we still need exceptional engineering talent, product design talent, and storytelling talent from Web 2. Even my smartest engineering friends have not written a single line of Solidity code.

Imagine what would happen if some top product design experts joined in. They could completely change the way we approach on-chain transactions, creating something fresh and innovative instead of simply replicating traditional stock trading. That's why I think this is the most pressing issue.

12. ChainCatcher: Where do you see the breakthrough for the large-scale application of Web3? Which tracks currently have this potential?

Irene: Lately, I have been mainly involved with teams building and challenging traditional norms, and I am passionate about the potential of gaming and its ability to introduce digital assets to others. The gaming experience should not be limited to on-chain, and blockchain technology has the potential to unlock a wealth of novel gaming behaviors.

Additionally, teams behind some games we enjoyed in our youth, mainly from Korea and Japan, have heavily invested in on-chain operations and are using LayerZero to initiate operations across different chains. This progress excites me greatly to observe, as it goes beyond the basic concept of NFTs.

Furthermore, there are some exciting new applications emerging outside of gaming that prioritize providing a delightful user experience. Interacting with these applications should not be stressful but rather a pleasant process. Recently, I encountered a situation where I tried to transfer USDC from Ethereum to Solana, and it took several hours. This happened late at night, around 2 a.m., and despite my strong interest in exploring bridging opportunities, this experience made me quite anxious.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。