LayerZero: Why the hype and how to get involved

In the tumultuous world of cryptocurrencies, while most digital assets have suffered severe downturns, LayerZero seems to have emerged as one of the most popular projects in the bear market. 

This blockchain infrastructure protocol’s latest funding round included several high-profile venture capitalists, including Andreessen Horowitz, Christie’s, Sequoia Capital and Samsung Next. The round, which raised $120 million in Series B funding at a valuation of $3 billion, was three times larger than the previous round.

Moreover, even investors have been intrigued by LayerZero’s airdrops. This has left many scrambling to find out how they can get involved with the project and share in its future success. 

Indeed, these achievements have made LayerZero a standout success story amid a lackluster cryptocurrency market, demonstrating that investors are still keen on infrastructure-focused crypto projects.

What is LayerZero

LayerZero is an omnichain interoperability protocol designed for lightweight message passing across chains. LayerZero provides authentic and guaranteed message delivery with configurable trustlessness.

So, what exactly is LayerZero?

LayerZero is a platform for inter-blockchain communication. It can help transfer information between different blockchains by acting as a translator.

In the same way that people need a translator to communicate with someone who speaks a different language, blockchains with different technical systems have difficulty communicating directly. This is where LayerZero comes in, acting as a translator to enable clear communication between blockchains. Users can specify what information they want to send and to which blockchain, then LayerZero is responsible for converting and transmitting the information between the two blockchains.

For example, if a user wants to send a message from Blockchain A to Blockchain B, the message is first sent to LayerZero. LayerZero acts as an intermediary and forwards the message to the people responsible for executing the task. They forward the message to the appropriate data node on Blockchain B. Blockchain B verifies its authenticity and sends it to the specified receiving address.

In summary, LayerZero acts as a communication protocol or language translator, removing barriers between different blockchains and enabling efficient and accurate information exchange. Users do not need to worry about the technical details of the two blockchains; they only need to specify the content and the recipient, and LayerZero takes care of the rest.

Why LayerZero?

LayerZero is designed to address the limitations of existing interoperability protocols that rely on trusted intermediaries or custodians. The benefits of LayerZero include

Trustless transactions

LayerZero allows users to send and receive money directly between different blockchains without relying on intermediaries. This reduces the risk of losing money to hackers or dishonest custodians.

Easy cross-chain development

LayerZero provides an easy way for developers to build applications that work across multiple blockchains. This means they can create new decentralized exchanges, wallets and betting platforms that are more flexible and innovative.

Native asset support

With LayerZero, users can send their cryptocurrencies directly between different blockchains without converting them to another type of token. This makes it easier to use different blockchains and reduces costs.

Better liquidity

LayerZero makes it easier for people to buy and sell different cryptocurrencies across multiple blockchains. This means people can get better prices and buy and sell a wide range of digital tokens more easily.

As a new cross-chain communication protocol, LayerZero has important advantages, such as enabling trustless transactions. However, it also faces challenges such as technical complexity, the difficulty of ecosystem development and potential security risks. 

As the LayerZero team continues to optimize and enhance the protocol, expand its application scenarios, deepen cooperation with mainstream public chains, and improve its security defense capabilities, LayerZero can play a crucial role as a cornerstone of cross-chain technology.

How to get the airdrop

Although LayerZero has not yet made an official announcement, many people are preparing for the potential upcoming airdrop. However, there are actions that people can take to increase the likelihood of receiving airdrop tokens.

Based on experience, here are some things people can do:

1. Actively participate in the official LayerZero Discord community by posting regularly and interacting with other users. LayerZero may award more airdrop tokens based on community participation.
2. Increase engagement on Twitter by retweeting and commenting on LayerZero’s tweets more often. LayerZero may award more airdrop tokens based on social influence on Twitter.
3. Trade more LayerZero-related smart contracts to increase your chances of receiving airdrop tokens. LayerZero may allocate airdrop tokens based on trading volume.
4. Use the LayerZero Testnet Bridge to perform more Testnet transactions. LayerZero may allocate more airdrop tokens based on the frequency of use of the test net.

In summary, even though LayerZero has not officially announced the airdrop plan, community members can still proactively participate in the community, trade on the platform and show their support for the LayerZero project to increase their chances of receiving airdrop rewards.

Extracting Insights from Data

So, what insights can we gain from the data? 

User Insights: Growing Interest in LayerZero’s Technology

The increasing number of unique users on LayerZero, especially since March, indicates a growing interest in LayerZero’s technology. According to Footprint Analytics, as of April 20th, there are over 866 thousand unique users on LayerZero. This is due to the sharp increase in unique users since the end of March, likely fueled by potential airdrop events that promote technology and encourage more users to use it.

LayerZero has positioned itself as a blockchain infrastructure provider with excellent transaction speed and negligible fees. As a result, it is becoming an attractive option for developers and companies seeking to build decentralized applications that can handle large volumes of transactions and users.

As more users join LayerZero, it will likely attract more developers and applications, further increasing the adoption and use cases of the network.

Transaction Insights: Challenge and Opportunity Amidst Growing User Base

The upswing in the number of transactions on LayerZero during March was likely due to the successful marketing campaigns aimed at promoting the platform’s features and benefits

According to Footprint Analytics, 38.70% of all the transactions were made by users who only completed one transaction. This indicates that the potential airdrop events have successfully attracted many new users to try the LayerZero protocol. However, as users become more familiar with the LayerZero protocol and the number of transactions increases, the number of participating users decreases. 

Only a small percentage of users (3.58%) perform high-frequency transactions, while the majority simply complete tasks rather than actively use LayerZero.

This user structure presents both challenges and opportunities for the LayerZero protocol. The opportunity lies in the fact that airdrop events can quickly attract new users. The challenge is to convert more new users into loyal and highly active users, thereby increasing transaction volumes on the platform. This will require LayerZero to continue to improve its technology, enrich its use cases and increase user stickiness.

Blockchain Insights: Layer2 Blockchains Have Good Performance

Arbitrum stands out with the highest number of unique users, followed by Optimism and Polygon, as the LayerZero protocol expands across different networks. 

There are currently projects integrating the LayerZero protocol, including Stargate, Hashflow, Radiant Capital, SushiSwap and Rage Trade, among others, in cross-chain trading, lending, liquidity mining and NFT. These projects can use LayerZero’s protocol to enable asset transfers, contract invocations and message passing across different chains. LayerZero provides specialized tools and services to users on high-performance networks, further driving adoption and use cases for its technology.

In summary, data analysis of LayerZero’s user and transaction volume results shows promising growth and potential for adoption in the blockchain space. By improving user engagement and retention, supporting high-performance networks, and expanding its reach, LayerZero is well-positioned to become a leading blockchain infrastructure provider.

This piece is contributed by Footprint Analytics community.

The Footprint Community is where data and crypto enthusiasts worldwide help each other understand and gain insights about Web3, the metaverse, DeFi, GameFi, or any other area of the fledgling blockchain world. Here you’ll find active, diverse voices supporting each other and driving the community forward.

• Footprint Website:  https://www.footprint.network
• Discord: https://discord.gg/3HYaR6USM7
• Twitter: https://twitter.com/Footprint_Data
• Author: [email protected]
• Data Source: LayerZero Dashboard

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