Article by: Eric, Foresight News
On January 20th, LayerZero announced that an important event would be revealed on February 10th. Although its token ZRO’s price subsequently rose over 40% from about $1.70 to nearly $2.40, it’s clear that the market has already become desensitized to such “big event previews,” and no one is really expecting to see what actually happens.
Come February 10th, who would have thought that LayerZero would drop several heavy bombs on this predetermined day.
First, on the evening of the 10th, Tether announced it would invest in LayerZero to support the development of blockchain interoperability technology. Early on the 11th, LayerZero officially announced the launch of Zero, an L1 blockchain set to replace Ethereum as the “next-generation world computer,” scheduled for this fall. Born with a golden key, Zero immediately secured partnerships with Citadel Securities, the Depository Trust & Clearing Corporation (DTCC), Intercontinental Exchange (ICE), and Google Cloud on its launch day.
Citadel Securities, one of the world’s top market makers handling over 35% of US retail order flow, will evaluate how to integrate Zero into high-performance trading, clearing, and settlement processes; DTCC will use Zero to optimize tokenization services and collateral application chains; ICE, the parent company of NYSE, will leverage Zero to enhance trading and clearing infrastructure to support around-the-clock markets and the potential integration of tokenized collateral; Google Cloud aims to combine its cloud infrastructure and AI capabilities with Zero to build a new economic system.
But that’s not all. Zero’s advisory team includes Ark Invest’s Cathie Wood, ICE’s Strategic Vice President Michael Blaugrund, and Caroline Butler, former head of global digital assets at Mellon Bank. Cathie Wood’s ARK Invest even directly invested in LayerZero, stating this was her “first time serving as an advisor in many years,” highlighting the significance of this move.
Cathie Wood and traditional US financial institutions are probably no strangers to many. The only thing to note is that Citadel was reported to plan to become a cryptocurrency market maker by the end of February 2025. After Bitcoin bottomed around $75,000, it soared past $120,000. This time, Citadel directly invested in ZRO, causing ZRO to surge nearly 50%.
LayerZero Never Plays Low-End
Before Zero was launched, LayerZero was already considered a chosen one.
In early 2022, LayerZero launched the cross-chain bridge Stargate. Within less than 10 days, its TVL exceeded $3 billion. By the end of March, LayerZero completed a $135 million Series A+ funding round led by FTX Ventures, Sequoia Capital, and a16z. A year later, it raised another $120 million at a $3 billion valuation, with participation from a16z Crypto, Sequoia, Circle Ventures, Samsung Next, and others.
It’s rare for a Web3 project to be valued at $3 billion before token issuance.
But everything about LayerZero seems quite reasonable. Its co-founder and CEO Bryan Pellegrino is a young poker prodigy who achieved early success, having developed a platform called OpenToken in 2018 to help ordinary people issue tokens, which was later acquired. In 2020, Bryan and his partners, who later co-founded LayerZero, developed a poker AI called Supremus. This AI defeated all other “peers” worldwide at the time, including some top professional players. A paper describing this AI was later cited in game theory research published by DeepMind, Alphabet’s AI lab.
Bryan Pellegrino is the type investors love—high IQ, capable of anything. LayerZero’s subsequent achievements have proven this.
If you still think LayerZero is just a cross-chain bridge, then you probably haven’t fully understood this project.
As the earliest project to introduce the omnichain concept into Web3, LayerZero’s core isn’t “cross-chain,” but “interoperability.” A close look at LayerZero’s mechanism reveals that it actually builds a set of technical standards for “trustless message passing between different chains.” In the LayerZero V2 blog, there’s a sentence: “Just as TCP/IP standardized internet development, LayerZero aims to standardize all on-chain application development. This unified cross-chain development concept is called omnichain, which is also LayerZero’s vision for the future of cryptocurrency.”
Cross-chain bridges are just token transfers; omnichain enables calling smart contracts across arbitrary chains. More importantly, LayerZero has developed a stack that enables this functionality, allowing token issuers or protocol developers to adjust parameters themselves. Currently, LayerZero V2 uses a combination of decentralized verification networks (DVN) and executors to facilitate message passing. DVNs are networks composed of multiple centralized validators, and executors are responsible for executing verified messages. All chains supporting LayerZero deploy Endpoint contracts to send and receive messages.
For example, if I issue token A and want it to transfer between Ethereum, Arbitrum, and Base, I can deploy corresponding token contracts on each chain, integrate LayerZero’s stack, and agree that as long as more than five DVNs verify the message’s authenticity, cross-chain token transfer can proceed.
LayerZero provides a unified standard for such tokens: OFT (Omnichain Fungible Token). Tokens like USDT, USDC, USDe, WETH, PENGU are already OFT. For token issuers, this means a plug-and-play standardized format that supports nearly 200 blockchains. Once integrated, they are automatically compatible with all LayerZero-supported cross-chain bridges and DEXs, eliminating the need to establish liquidity on each chain—what’s not to like?
From supporting USDT to direct investment by Tether, from a TVL of $3 billion in just 10 days to over 165 blockchains and more than $200 billion in cross-chain transaction volume, recent integrations by token projects like Aztec and stablecoin-focused public chains like Stable are prime examples of the power of standards.
Zero Is More Like L 0.5
According to LayerZero’s own description, the concept for Zero actually began over two and a half years ago, around mid-2023, shortly after its Series B funding. If they had envisioned the current integration with Wall Street’s traditional powerhouses back then, it would have been overly ambitious. But the consistent idea over these two and a half years has been: to replace Ethereum as the world computer.
As a decentralized infrastructure for message passing between L1 and L2, LayerZero can rightly be called “L0,” but perhaps the team’s obsession with infrastructure has led to Zero being more like “L 0.5”—a layer that hosts multiple L1s.
The key feature of Zero can be summarized as: transactions on the network do not compete for limited resources.
According to official descriptions, current L1s require each validator to process every transaction, and this design for security limits efficiency to the speed at which all validators process transactions. To increase TPS, L1s often have to centralize validators, sacrificing decentralization. Thanks to developments in zero-knowledge proofs (ZKPs), Zero separates block construction from validation: block producers create a full block and generate a ZKP, while validators only verify the proof.
LayerZero claims this design can reduce the cost of running a blockchain with Ethereum’s capacity from $50 million per year to $1 million, and increase TPS to 2 million.
Based on this design, Zero introduced the concept of “Atomic Zones.” Each Zone can have its own characteristics—high-frequency trading, payments, or RWA tokenization. Each Zone is equipped with independent block producers, and all blocks ultimately achieve finality on the same chain, but not all transactions need to compete for limited network resources.
To some extent, this design resembles Layer 2 solutions, which is why I see it as more like L 0.5. From LayerZero’s perspective, this design combines Solana’s high TPS with the ability to operate without waiting for L1 confirmations, unlike L2s. With ZKP, Zero has achieved decentralized, high-efficiency parallel processing.
It’s worth noting that once Zero launches, ZRO will no longer be just a ticket for cross-chain fees but will become the native token of the L1. The potential of these two is on entirely different levels.
What Does Wall Street Want?
Imagine a scenario where thousands of financial institutions use different chains—some on Ethereum, some on Solana, some on Base, others on private chains. Their tokens have different standards, on-chain settlement speeds vary, and cross-chain standards are inconsistent. Or even institutions on the same chain can enjoy blockchain’s benefits, but when using different chains, blockchain might be no better than centralized settlement systems.
Ideally, all of Wall Street would use the same blockchain, and all problems would be solved.
The simple answer is: Wall Street wants “standardization.” All assets—stocks, bonds, real estate—can be traded using the same tokenization standard. Ideally, stablecoins would also follow this standard, avoiding the need to cross multiple chains for a single transaction. Zero was born for this purpose. While each Zone may have its own features, ultimately they settle on the same chain, meaning everyone shares the same standard.
Remember when Citadel handled over 35% of order flow? If Citadel adopts Zero, it could become the leader in stock tokenization. Moreover, Zero doesn’t exclude other chains; they still have LayerZero to standardize cross-chain formats.
For Wall Street, centralized chains lack the “sexy” story of issuing tokens, and overly decentralized chains are hard to control. Zero, using DPoS, strikes a balance: the chain is relatively decentralized but collectively managed by multiple companies or individuals. This environment of shared control and strategic competition is acceptable to all parties.
There are countless developers eager to build blockchains for financial giants, but so far, only LayerZero has provided a clear standard answer.
