LayerZero, a new omnichain interoperability protocol, has received a $6.3 million Series A funding round led by Binance Labs and Multicoin Capital, the company announced Thursday.
Sino Global Capital, Defiance, Delphi Digital, Robot Ventures, Spartan, Hypersphere Ventures, Protocol Ventures, and Gen Block Capital are among the investors in the round. According to LayerZero, the project has raised $2 million in a seed funding round, bringing its total fundraising to $8.3 million.
The funds will be used to expand LayerZero Labs’ endpoints across the ecosystem, according to Bryan Pellegrino, co-founder of LayerZero Labs.
LayerZero has not yet been launched because it is undergoing three audits, which are expected to be completed by the end of October, but Pellegrino expects the network to launch soon after.
“Almost every existing approach to cross-chain bridging and messaging falls into one of two broad categories. The first is to have a middle chain that forms a consensus and validates and forwards messages between chains. The second is running a light node on-chain,” LayerZero Labs co-founder and CTO Ryan Zarick wrote in a blog post.
The omnichain protocol connects decentralized applications (dapps) from different blockchains. Most people think of cross-chain protocols as having a bridge from Ethereum to Avalanche, and while Ethereum has bridges to many other chains (BSC, Polygon, Avalanche, Solana, Fantom, and so on), Pellegrino noted that Avalanche does not connect to those.
“Though we may refer to Ethereum as a multi-chain, each of its connected chains remains siloed and has limited communication pathways. “Omnichain is when all chains are directly and natively connected to each other,” Pellegrino explained.
According to Zarick, its protocol uses a “Ultra Light Node,” which combines the security of a light node with the cost-effectiveness of middle chains.
It connects disparate blockchains by passing messages between chains rather than concentrating security around a single hub, allowing for cheaper transactions but a single point of failure, according to the company. According to Zarick, on-chain light nodes are secure but expensive, whereas middle chains are less secure but less expensive.
“I think most people can see that the proliferation of chains isn’t going away anytime soon,” Pellegrino said. “We’ll never have a chain that does everything perfectly, and different use cases have different requirements. LayerZero enables dapps to reap the benefits of each chain and use the best parts of them,” Pellegrino added.