Layer Zero is a protocol that works not only on Proof Of Stake chains but also on Proof Of Work ones. This could be a revolutionary protocol! It is a "Generic MSG Passing Protocol" (transmission of messages) that connects contracts on Avalanche (example) with one on Ethereum. How does the process happen? Tokens are burned on the old and minted on the new. The goal is to build cross chain applications that can communicate, even if they are present on different blockchains. Basically it is similar to a bridge but only communicates native tokens. It is similar to Thorchain but it is a chain. What is the difference with a Wormhole type bridge? These provide wrapped versions. The other big difference is that here it is a direct passage, without using intermediaries (if I pass from the Terra chain to that of Solana through a bridge I will have to rely on a third platform such as Wormhole, the same goes if I use Thorchain which acts as a link between the various blockchains allowing swaps). To do this, Layer Zero must be present as an "endpoint" (similar to a smart contract) on each supported chain: a transaction is written (for example "Fantom swap") and is sent to the endpoint on the Ethereum chain precisely to validator that passes it to the network and to the relayer. Then the network communicates with the oracle that sends the transaction ID (current block).

These interactions take place between the two chains involved in the swap, relayer and oracle which are off chain. Relayer and oracle must be two independent entities to avoid security problems. If relayer and oracle are both malicious, Layer Zero can have security problems.
One difference with Cosmos IBC is that relayers and oracles are not used in that ecosystem.
This infrastructure can be used to create dex cross chains (like Thorchain), farming and lending platforms with mixed liquidity. What's the benefit? I can collateralize on Ethereum and take a loan on Avalanche for example.

The first application that uses Layer Zero is Stargate. It is a bridge that exploits this protocol by integrating multiple chains (Ethereum, Polygon, Avalanche, Fantom, Bnb, Arbitrum, Optimism) for transfers.

Stargate tries to solve the bridge trilemma:
1) "instant finality" (the funds arrive immediately on the destination chain)

2) "native assets" (no wrapped token or synthetic but only native tokens)

3) "unified liquidity" (there is a single pool of a certain asset, used for bridges)

HOW DOES STARGATE WORK? FOR NEWBIE USERS
Hey Stargate is a bridge. If you are on the Ethereum mainnet and want to transfer to Arbitrum, simply choose the amount you want to transfer and the destination chain. Give approval on Metamask and within minutes your funds will move from Ethereum to Arbitrum. Security, decentralization (no exchange), speed.

You could also decide to put your $Usdc to work (APY is variable). Add liquidity+farm. Choose your favorite chain! The operation is based on single stablecoin and farming pools of the $Stg token. $Stg is the governance token that can be staking by receiving veStg (Governance). The token, among the large exchanges, can be traded on Bybit.

I'm using Stargate pools and love it. However you should do your research because the protocol is new.

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