LayerZero on Gelato RaaS: Omnichain Interop

Gelato Team

•

Mar 25, 2025

Overview (TL;DR)

Blockchains need a universal communication layer. LayerZero serves as the TCP/IP for blockchains to enable cross-chain messaging without dictating verification methods.
Applications should control their own security. A modular approach lets developers calibrate security based on their specific needs rather than being locked in to a fixed vendor’s approach.
Cross-chain infrastructure must be immutable. Immutable endpoints eliminate upgrade-related vulnerabilities.
Security requires defense in depth. The X of Y of N model allows applications to configure their security requirements.
Cross-chain operations need graceful failure handling. Horizontal composability allows transactions to split into independent atomic pieces that can succeed or fail separately.
Data queries shouldn't require roundtrips. lzRead enables smart contracts to efficiently query cross-chain data.
Multi-chain integration should preserve sovereignty. ABC Stack builders can leverage LayerZero to tap into external liquidity while maintaining control over their security parameters.

The future isn't about one chain ruling them all—it's about each blockchain focusing on what it does best while interoperating with others.

LayerZero aims to serve as the TCP/IP for blockchains through cross-chain messaging and infrastructure that allows applications to maintain control over their security model. Blockchains are seen as nodes in a larger Omnichain network—an interconnected system of specialized chains where applications and assets can flow freely.

We Need a TCP/IP for Blockchains

LayerZero established itself as the leading messaging protocol by building the most secure and developer-friendly interop layer in the world. The protocol design focuses on the transport layer, providing the infrastructure for messages to be transmitted without dictating how messages should be verified or executed.

LayerZero’s protocol was built from first principles to be immutable, censorship-resistant, and permissionless. Its flexible security model allows applications to customize verification through Decentralized Verifier Networks (DVNs).

Building Secure Cross-Chain Apps with LayerZero

LayerZero modularizes the messaging stack so applications maintain complete control over their security model. Developers can calibrate security based on their specific use case—higher security for high-value transfers, lower overhead for frequent but smaller transactions.

The X of Y of N model allows combining verification approaches (ZK proofs, multi-sigs, oracles) for defense-in-depth strategies tailored to each application.

Immutable Endpoints

Endpoints are immutable smart contracts deployed on each blockchain that serve as entry and exit points for LayerZero messages. Immutability eliminates upgrade-related vulnerabilities that have led to major bridge exploits.

Decentralized Verifier Networks (DVNs)

DVNs are independent entities that validate messages between chains. Applications configure DVNs with an X of Y of N model. Running a DVN is permissionless, with current providers including Polyhedra, ChainLink, Axelar, Blockdaemon, Stargate, and Nethermind.

Executors: Permissionless Cross-Chain Transactions

Once a message is verified, Executors handle final delivery on the destination chain. Execution is permissionless—anyone can call `lzReceive()`—ensuring liveness even if specific services fail.

Message Libraries

Message libraries are immutable and append-only, enabling the addition of new verification methods without disrupting existing apps. The Ultra Light Node (ULN) is the default implementation.

Capabilities for Multi-Chain DeFi

Horizontal Composability

LayerZero V2 introduced horizontal composability (`sendCompose`, `lzCompose`), allowing contracts to split execution into atomic pieces that can succeed or fail independently. This prevents all-or-nothing transaction failures.

lzRead for Cross-Chain Data Queries

lzRead enables efficient cross-chain queries with reduced latency and gas costs. Use cases include yield vaults, omnichain DEXs, shadow NFTs, and cross-chain authentication.

Implementation for ABC Stack

ABC Stack builders can integrate LayerZero without compromising sovereignty, tapping into existing liquidity pools while preserving customizable security. Ready-made standards like OFT (Omnichain Fungible Token) and ONFT simplify cross-chain assets.

LayerZero vs. Axelar vs. Wormhole

Comparison of LayerZero, Axelar, and Wormhole

Rather than being mutually exclusive, builders can use a multi-bridge approach, leveraging different protocols for different application requirements.

Kraken's Ink: Exchange-Backed L2

In December 2024, Kraken's Layer 2 blockchain Ink launched on mainnet with Gelato RaaS, built on Optimism’s OP Stack. Ink integrated with LayerZero on day one, achieving over 1 million transactions in its first week and demonstrating high-volume transfers like $80 million with just $5 in fees.

Why Projects Adopt LayerZero’s OFT Standard

LayerZero’s Omnichain Fungible Token (OFT) standard ensures unified liquidity across chains. The protocol has processed over 145M messages and $50B+ in value since 2021. Adoption includes:

Tether’s USDT0 ($141B supply) launched on Ink, expanding to Berachain and MegaETH.
PayPal USD (PYUSD) integrated LayerZero for transfers between Ethereum and Solana.
Ethena’s USDtb, backed by BlackRock’s BUIDL Fund, launched as a day-one OFT across Ethereum, Base, Solana, and Arbitrum.
BitGo’s WBTC expansion to BNB Chain and Avalanche via LayerZero DVN security.
Ondo Finance’s USDY deployed across Ethereum, Mantle, and Arbitrum using LayerZero OFT.

Stargate Finance

Stargate is LayerZero’s liquidity layer with $1.3B TVL across 35+ chains. It batches transfers for efficiency and supports USDC, USDT, and WETH. Stargate is one of the highest-volume LayerZero users.

Market Position

LayerZero has become the leading interoperability solution by securing adoption from Tether, PayPal, BitGo, Ethena, Ondo Finance, and others. Its growing network effect makes OFT the dominant standard for cross-chain tokens.