LayerZero, who never plays in low-elo games, has spent two and a half years developing a major new feature.

Written by: Eric , Foresight News

On January 20, LayerZero announced a major event to be revealed on February 10. Although the price of its token ZRO subsequently rose by more than 40% from about $1.7 to nearly $2.4, the market had clearly become desensitized to such "big event announcements," and no one was really looking forward to what actually happened.

February 10th arrived, and unexpectedly, LayerZero dropped several bombshells on this appointed day.

First, on the evening of the 10th, Tether announced its investment in LayerZero to support the development of blockchain interoperability technology. Then, in the early hours of the 11th, LayerZero officially announced that it will launch L1 Zero this fall, aiming to replace Ethereum as the "next-generation world computer." Born with a silver spoon in its mouth, Zero secured partnerships with Citadel Securities, the Depository Trust & Clearing Corporation (DTCC), Intercontinental Exchange Trading (ICE), and Google Cloud on the very first day of its announcement.

Citadel Securities, a top global market maker that handles over 35% of US retail order flow, will evaluate how to integrate Zero into its high-performance trading, clearing, and settlement processes; DTCC will optimize tokenization services and collateral application chains through Zero; ICE, the parent company of the NYSE, will optimize its trading and clearing infrastructure through Zero to support the potential integration of 24/7 markets and tokenized collateral; and Google Cloud aims to integrate its cloud infrastructure and AI capabilities with Zero to create a new economic system.

That's not all. Zero's advisory team includes Woody, Michael Blaugrund, ICE's VP of Strategy, and Caroline Butler, former Global Head of Digital Assets at Bank of Mellon. Woody's ARK Invest even invested directly in LayerZero, stating that this was her "return to advisory roles after many years," highlighting the significance of this move.

Citadel and traditional American financial institutions probably need little introduction. The only point to note is that in late February 2025, Citadel was revealed to be planning to become a cryptocurrency market maker. After Bitcoin bottomed out around $75,000, it surged to over $120,000. This time, Citadel directly invested in ZRO, causing ZRO to surge by nearly 50%.

LayerZero never plays in low-elo games.

LayerZero was already the chosen one even before Zero was released.

In early 2022, LayerZero launched the cross-chain bridge Stargate, and within 10 days of its launch, its TVL (total value) surpassed $3 billion. At the end of March, LayerZero completed a $135 million Series A+ funding round co-led by FTX Ventures, Sequoia Capital, and a16z. A year later, LayerZero completed a $120 million Series B funding round at a valuation of $3 billion, with participation from a16z Crypto, Sequoia Capital, Circle Ventures, and Samsung Next, among others.

It is extremely rare for a Web3 project to receive a valuation of $3 billion before its token issuance.

But everything seems to make sense with LayerZero. Bryan Pellegrino, co-founder and CEO of LayerZero, is a young and successful poker prodigy who, back in 2018, developed OpenToken, a platform that helped ordinary people issue tokens, which was later acquired. In 2020, Bryan and his partners who later co-founded LayerZero developed a poker AI that defeated all other "peers" worldwide, as well as some of the world's top professional players. The paper introducing this AI, "Supremus," was later cited in game theory research published by Alphabet's AI lab, DeepMind.

Bryan Pellegrino is the type of person investors love most: naturally intelligent and excels at everything he does. LayerZero later proved this point.

If you still think LayerZero is a cross-chain bridge, then you probably don't understand this project.

LayerZero, the first platform to introduce the omnichain concept to Web3, focuses not on "cross-chain" but on "interoperability." A closer look at LayerZero's mechanisms reveals that it essentially establishes a technical standard for "how to transfer messages between different chains without trust." A blog post introducing LayerZero V2 states: "Like the standardized development of the TCP/IP internet, LayerZero's goal is to standardize the development of all on-chain applications. This unified concept of cross-chain development is summarized as omnichain, and it represents LayerZero's vision for the future of cryptocurrency."

Cross-chain bridges merely facilitate token transfers, while omnichain enables the invocation of contracts on other chains from any given chain. More importantly, LayerZero only provides the stack for implementing this functionality; token issuers or protocol developers can adjust the parameters themselves. Currently, LayerZero V2 uses a combination of a decentralized validator network (DVN) and executors to achieve message passing. A DVN is a network of multiple centralized validators, while executors are responsible for executing the verified messages. Chains supporting LayerZero deploy Endpoint contracts to send and receive messages.

For example, if I issue token A and want this token to be transferable between Ethereum, Arbitrum, and Base, I can deploy the corresponding token contracts on each chain, integrate the LayerZero stack, and stipulate that cross-chain token operations can be performed as long as more than 5 DVNs verify the authenticity of the message.

LayerZero provides a unified standard for these tokens: OFT (Omnichain Fungible Token), including tokens such as USDT, USDC, USDe, WETH, and PENGU. For token issuers, there's a plug-and-play standardized format that supports nearly 200 blockchains. Once integrated, it's automatically supported by all cross-chain bridges and cross-chain DEXs that support LayerZero, eliminating the need to painstakingly build liquidity on each chain. Why wouldn't they use it?

From supporting USDT to direct investment by Tether, from $3 billion in TVL in 10 days to over 165 blockchains and over $200 billion in cross-chain transaction volume, Aztec, which recently launched its token, and Stable, a stablecoin public chain, have both integrated LayerZero immediately. This is the power of standards.

Zero is more like L 0.5

According to LayerZero's own account, the idea for Zero actually began two and a half years ago, around mid-2023, shortly after the completion of its Series B funding round. To have envisioned its current collaboration with traditional Wall Street forces back then might have been overly farsighted. However, the core idea that has remained unchanged over these two and a half years is: to replace Ethereum as the world computer.

As a decentralized infrastructure that transmits messages between L1 and L2, LayerZero could indeed be aptly called "L0". However, perhaps due to the team's obsession with infrastructure, Zero, which boasts "Solana's speed and Ethereum's decentralization", is actually more like "L0.5", an L1 that carries multiple L1 lines.

Zero's unique feature can be summarized in one point: online transactions do not require competing for limited resources.

According to the official description, in current L1 blockchains, each validator needs to iterate through every transaction. This security-oriented design limits efficiency to the efficiency of all validators iterating through transactions. Under this premise, if L1 wants to improve TPS, it needs to centralize validators, sacrificing decentralization. However, thanks to the development of Zero-Knowledge Proofs (ZKP), Zero separates block construction and block verification. The builder directly creates a complete block and generates a ZKP, while the validator only needs to verify the proof itself.

According to LayerZero, this design could reduce the cost of running a blockchain with the same capacity as Ethereum from $50 million a year to $1 million, while increasing TPS to 2 million.

Based on this design, Zero proposed the concept of "Atomicity Zones". Each Zone can have its own characteristics, such as high-frequency trading, payments, or RWA tokenization. Each Zone is equipped with an independent block producer, and all blocks will eventually achieve finality on the same chain, but not all transactions will compete for limited network resources.

In some ways, this design bears a resemblance to L2, which is why I think it's more like L0.5. LayerZero believes this design offers the high TPS of Solana without the need for L1 confirmation to guarantee transaction validity, unlike L2. With ZKP, Zero pioneered the simultaneous achievement of decentralization and high efficiency.

What is easily overlooked is that once Zero is launched, ZRO will no longer be a ticket to collect cross-chain fees, but will become the native token of L1. The potential of these two is on completely different levels.

What does Wall Street want?

Imagine this scenario: thousands of financial institutions, some using Ethereum, some Solana, some Base, and some private blockchains, with different token standards, on-chain settlement speeds, and cross-chain standards. Financial institutions using the same blockchain might benefit from the blockchain's value, but when using different blockchains, the blockchain might be less effective than a centralized settlement institution.

Ideally, if the entire Wall Street used the same blockchain, all the problems would be solved.

So the answer is actually quite simple: what Wall Street wants is "standardization." All assets—stocks, bonds, and real estate—should be traded using the same tokenization standard, and ideally, stablecoins should also use the same standard, eliminating the need for a single transaction to cross multiple different chains. Zero was created for this purpose. Each Zone may have different features, but ultimately they will all settle on the same chain, meaning everyone's standards are the same.

Remember how Citadel handled over 35% of the order flow? If Citadel were to designate Zero, Zero could very well become the leader in stock tokenization. Furthermore, Zero wouldn't exclude other chains, given that they have LayerZero to standardize cross-chain formats.

For Wall Street, centralized blockchains lack the compelling narrative for issuing tokens, while overly centralized blockchains are uncontrollable. Zero, which employs DPoS, strikes a balance in decentralization. The blockchain itself is relatively decentralized, yet it is collectively managed by multiple companies or individuals. This environment, where control is gained but requires negotiation, is an acceptable option for all parties involved.

There are countless people who want to develop blockchain for financial giants, but so far only LayerZero has found a standard answer.