Why Build Omnichain?

Introduction

Imagine you’re a developer eager to build a blockchain application but are uncertain about where to start. There are a myriad of questions that you need to answer: what are the differences between the 100+ blockchains that exist today? Which chains can support your application’s use-case? Which ones have the best development tools? Which ones have the liquidity and user activity now and in the future? How will the crypto space evolve, and how will this impact the blockchain you decide to build on?

Note: An application is anything with a contract on a blockchain such as an exchange, bridge, or even a fungible or non-fungible token.

Chain selections for application deployments are important decisions for developers, but navigating these decisions is complex. The optimal approach is to build on a framework that future-proofs an application so that it is not impacted as the space evolves to new chains or reverts back to old chains once narrative hype dials back.

This article will explain why both new and existing developers should build on a development framework that is configured and can be extended to multiple execution environments. We will define omnichain, outline why developers should build omnichain, demonstrate why LayerZero is the ideal omnichain framework, and provide use-cases for what has already been built omnichain.

What is Omnichain?

First off, what does omnichain mean? It is the concept of a fully-connected mesh network with universal network semantics for all connected chains and security specialized to each link, configured at the application level. In simple words: omnichain is a protocol that connects everything, everywhere for crypto developers so that applications can exist and be connected on many blockchains at once.

Let’s break it down:

• Fully-connected mesh network: All supported blockchains can send and receive messages in all possible pathways. For example, blockchain A is connected to B, B is connected to C, and C is connected to A.
• Universal network semantics: A standardized way to develop applications and execute transactions across all supported blockchains. This saves developers time and money by eliminating the need for custom code to be added for each new supported blockchain.
• Security specialized to each link: Configurable message execution and verification on a per-pathway basis. Meaning an application can configure one pathway between two blockchains to have high security and cost, whereas another pathway can have low security and cost.

Omnichain is often confused with cross-chain. Cross-chain refers to point-to-point messaging between two specific environments, where connections are built only for that pair of chains. When a new network is added, entirely new configurations are required, which are often centralized and vulnerable to exploits, as we’ve seen with several cross-chain bridges in the past. Omnichain, on the other hand, provides a universal framework where every chain communicates seamlessly with all others, no matter if the chain is EVM or non-EVM compatible. This builds a fully-connected mesh network with a consistent framework across for all chains and pathways. Omnichain, not cross-chain, is the right solution for interoperability.

Why Build Omnichain?

Over the past two years, the modular blockchain narrative has resulted in the commoditization of blockchains through blockchain kit providers like Conduit, Caldera, Polygon CDK, Avalanche Subnets, etc. This has resulted in an explosion in the number of blockchains that specialize in different verticals — be it throughput, security, speed, use case, decentralization, etc. According to DeFiLlama, there are hundreds of different blockchains in production right now, with 40 of them having over $100 million in Total Value Locked (TVL).

From a developer’s perspective, this growth is enticing because there are so many sandboxes to experiment in; however, this makes an application’s chain selection and building process more complex, adding to the developer’s cognitive load and, if done incorrectly, the complexity of an application’s business logic.

With so many different blockchains and no way to predict which ones will succeed in the future, the case for building omnichain is clear. While there are many reasons why an application might choose to build omnichain, three stand out in particular:

1. Future-proof: Interoperability protocols future-proof applications by providing a unified development environment, making migration considerations a non-issue if an application wants to extend or entirely migrate to a new chain, perhaps their own chain, in the future.
2. Increased adoption: Expand the application’s functionality and increase its adoption by existing on multiple chains, tapping into new user bases, liquidity, and other applications via universal composability.
3. Technical Benefits: An application can utilize the best of each chain it touches. Instead of choosing between speed, security, and decentralization, applications can use LayerZero to touch chains for use-cases depending on whether it wants speed (swapping), security (vault contracts), decentralization (governance), etc.

Building omnichain grants developers maximum flexibility in terms of chain support with minimal developer overhead. The concept is a future-proofed way to ship applications in an industry where blockchains can come and go in mere months due to memetic virality, hacks, token distributions, regulatory concerns, etc. It also enables developers to utilize all the different verticals of infrastructure being built, leveraging blockchains based on their specific differentiator.

Why LayerZero?

Interoperability protocols like LayerZero make the concept of omnichain possible. As such, the case for building omnichain is essentially the case to build on LayerZero. However, since there are other interoperability protocols in existence, we’ll four offer additional insights as to why LayerZero is the ideal solution.

1. Configurable Security: LayerZero’s design is flexible, letting applications choose and own their security stack. Each application can configure a security stack composed of both required and optional Decentralized Verifier Networks (DVNs), allowing for flexibility and upgrades as new technologies emerge. Additionally, applications can define parameters such as finality, execution, rate limiting, and blacklist/whitelist settings.

2. Developer Safety: For interoperability to be effective and secure, ensuring developer safety is paramount. Previous hacks demonstrate the devastating impact of security flaws in interoperable systems. LayerZero has been able to safeguard the omnichain developer experience through several initiatives including:

• The largest bug bounty in web3, in tandem with ImmuneFi, which offers a maximum reward of $15 million for each new vulnerability found by white hat hackers.
• Non-upgradeable endpoint contracts to enhance security, trust, and reliability. This immutability reduces the risk of introducing new vulnerabilities or bugs that could compromise the system.
• Regular security audits by reputable third-party firms to identify and mitigate potential vulnerabilities for all new protocol features or product updates.

3. Universal Semantics: Applications and tokens work the same way across the 80+ supported blockchains. LayerZero uniquely separates execution logic from security, simplifying development and removing security concerns when adding new features. Furthermore, LayerZero provides standards for writing omnichain smart contracts, structuring data packets, and composing logic, offering everything needed to launch an omnichain product with battle-tested, reusable standards. LayerZero is specifically omnichain in a way no other interop solution can match: connecting 80+ chains, from Solana to Arbitrum to Tron to Ethereum to Zora.

4. High Adoption: No other interoperability protocol matches the adoption level of LayerZero.

• 135+ million omnichain messages have been sent through LayerZero since its inception in 2022.
• 300+ teams launched omnichain protocols, tokens, and data primitives that use LayerZero messaging.
• $60+ billion in omnichain tokens moved across bridges powered by LayerZero.
• $300+ million in omnichain NFTs minted and secured utilizing the LayerZero ONFT Contract Standard.
• $40+ billion in assets utilize the OFT Standard to move between chains.

If you want a deep dive about the architecture refer to the LayerZero V2 Deep dive or the V2 Whitepaper. LayerZero encompasses the omnichain: it is a future-proof solution providing interoperability for applications now and in the future.

What can you build on LayerZero?

LayerZero protocol is designed as a low-level infrastructure primitive offering the highest level of utility for developers to build upon, allowing for the construction of virtually any type of application to be omnichain. As mentioned, a set of contract standards has been developed on top of the protocol to simplify the process for developers in shipping applications.

• Omnichain Application (OApp): A generic interface with universal semantics to send and receive pieces of data between contracts existing on different blockchain networks. The universality is important since applications cannot scale if every additional blockchain in the network incurs significant engineering cost to accommodate different interfaces and network consistency models.
• Omnichain Fungible Token (OFT): A type of OApp that is an extension of the ERC20 token standard and allows fungible tokens to be transferred across multiple blockchains without asset wrapping or middlechains.
• Omnichain Non-Fungible Token (ONFT): A type of OApp that is an extension of the ERC721 token standard and allows non-fungible tokens to be transferred across multiple blockchains.

Omnichain Application (OApp)

Any type of decentralized application (dApp) can be extended from a single chain to omnichain via LayerZero. In essence, if it can be built somewhere, LayerZero makes it exist everywhere.Here are some examples of OApp use-cases built on LayerZero:

• Bridging (e.g., Stargate): Liquidity networks built on LayerZero allow seamless token transfers across chains. A user with asset X on Chain A can transfer it to Chain B.
• Native Layer-2 Staking/Restaking (e.g., EtherFi): Without LayerZero, restaking could only be done through Layer-1 (L1), or it would have higher fees through an intent layer. LayerZero’s L2 Native Restaking framework allows staking assets directly on an L2 and withdrawing from the L2 without needing to migrate to the L1.
• Governance (e.g., Aragon): Multichain governance solution that aggregates votes on a voting chain and relays them to a DAO’s home chain via LayerZero.
• Identity (e.g., Clusters): Maintain accuracy across names and addresses on different chains.

Omnichain Fungible Token (OFT)

Making tokens usable across different blockchains is challenging without an omnichain standard. Accounting for token supply and address consistency is complex due to the varied latency and finality times of different blockchain execution environments. LayerZero’s Omnichain Fungible Token (OFT) standard addresses these challenges, enabling seamless cross-chain token usage.There are over 130 tokens deployed and secured using LayerZero. Here are a few examples:

Major Assets

• Wrapped Bitcoin: WBTC is a $9B asset and one of the most widely used tokens in DeFi.
• Ethena: Ethena is a synthetic dollar protocol. Its synthetic dollar token, USDe, and staked version, sUSDe, adopted the OFT Standard in mid-March, 2024.
• Pepe: PEPE is an omnichain meme coin that can be transferred across Ethereum, Arbitrum, and BNB Chain.

Stablecoins

• Angle: EURA is an overcollateralized stablecoin pegged to the value of the Euro available on 11 chains. Since its launch 18 months ago, the coin has been moved 7.6 million times.
• Abracadabra: The stablecoin $MIM is available on 11 chains as an OFT. Over 2 million OFT transfers have occurred in the last 6 months on LayerZero, with no fees other than gas costs.

DeFi Tokens

• Trader Joe: The Avalanche-founded dApp, Trader Joe, opted into the OFT Standard in February of 2023.
• PancakeSwap: CAKE, the utility token of PancakeSwap, is an OFT that is available across both EVM and non-EVM chains.

Liquid (Re)staking Tokens

• EtherFi: EtherFi’s weETH is the wrapped version of eETH, the natively restaked liquid staking token.
• Kelp: Kelp’s liquid restaking token, rsETH, can bridged to 11 different EVM networks.

Gas Tokens

• Metis: By leveraging OFTs, Metis enhanced the movement and utility of its native gas token across various blockchain environments.
• Canto: A L1 blockchain that adopted the OFT Standard for its native gas token, CANTO.
• ApeChain: APE can earn native yield and can be used as gas on ApeChain.

By adopting the OFT standard, these projects ensure their tokens can operate seamlessly across multiple blockchains, leading to increased token volume and greater project visibility.

Omnichain Non-Fungible Tokens (ONFT)

Much like the OFT Standard enables tokens to exist on many chains at once, the Omnichain Non Fungible Token (ONFT) Standard does the same for NFTs. This standard works by burning tokens on the source chain whenever an omnichain transfer is initiated, sending a message via the protocol and delivering a function call to the destination contract to mint the same number of tokens burned, creating a unified supply across all networks LayerZero supports. Examples of ONFTs include…

Collectibles

• Lil Pudgys: Pudgy Penguins’ Lil Pudgys are ONFTs and can be transferred cross-chain to Arbitrum, Polygon, and BNB Chain.
• Gh0stly Gh0sts: Gh0stly Gh0sts is the first omnichain NFT (ONFT) collection

Gaming

• Shrapnel: Shrapnel’s in-game assets are bridgeable, allowing creators and players to use them on any preferred blockchain.
• DeFi Kingdoms: Fantasy RFP game that allows users to move in-game assets between their subnet and Avalanche C Chain.

Conclusion

Building omnichain applications is not just an option; it’s a necessity in a multi-chain world. LayerZero provides the robust, unopinionated infrastructure needed to future-proof applications.With all of that said, there is only one question left to be asked: what will you build Omnichain?

If you’re building an application on LayerZero, consider applying to the lzCatalyst program. Supported by leading crypto investors like a16z Crypto, Lightspeed, Delphi Ventures, and others, this program offers up the option to invest up to $300M to support the development of novel omnichain applications on LayerZero.To learn more about LayerZero, check out the website. For additional information, the LayerZero team is available to answer general questions on Discord. You can also follow LayerZero on X to receive the most up-to-date information.