Bessie Liu

Interoperability protocol Connext has introduced chain abstraction with the goal of simplifying the layer-2 experience.



Similar to how account abstraction is designed to simplify the end-user experience with wallets, chain abstraction is designed to enable users to interact with multiple decentralized applications (dapps) on different chains without ever needing to leave the user interface.



Traditionally when interacting with layer-2s, users may need to bridge their funds to chain A if they want to use a specific liquidity pool on chain A, but they only have tokens available on chain B.



This makes for a complicated user experience and can often deter new users from wanting to transact in the space, as they will need to navigate the process of bridging, paying gas and depositing funds across different networks.



Many different protocols are working on resolving this issue, including Chainlink, LayerZero and Wormhole, to name a few. All of these protocols focus on cross-chain messaging, which enables smart contracts to communicate with each other.&nbsp;



Most of these protocols fall under the three most common bridges that exist today:



<ul>
<li>Native</li>



<li>Externally verified</li>



<li>Optimistic</li>
</ul>



Native bridges are completely trustless, Max Lomuscio, marketing lead at Connext Labs, told Blockworks. Transactions on native bridges are fully verified by one blockchain, but they often only work in one direction.&nbsp;



Another type of bridge — externally verified — uses external parties to verify transactions and relies on trust.&nbsp;



This includes the likes of Chainlink and LayerZero. On Chainlink, for example, users must trust that the oracle is accurate. With LayerZero, there is a 2/2 multisig, where two parties are responsible for all token bridging.



“The problem is that there is nothing to prevent these parties from colluding if they wanted to,” Lomuscio said.



Optimistic bridges are a third type. Similar to how rollups operate, transactions that pass through optimistic bridges must be quarantined for 30 minutes before they are valid.&nbsp;



Lomuscio notes that “any watcher can submit a fraud-proof and slash the transaction, so you only need one good actor to keep in the space watching the transactions to keep the system secure.”



Connext claims that what it introduces with chain abstraction is completely trustless and fast.



“Connext plugs into native bridges to move the data using the most secure path. On top of it, we have an optimistic system so that we can shorten the time to move messages from rollups that would otherwise require seven days,” Lomusico said.&nbsp;



There is also a liquidity and execution layer — Lomusico explains, “where liquidity providers front cash to users immediately then wait for the 30 minute refund on the optimistic layer.”



The Connext toolkit has been audited and is available to developers on Ethereum, BSC, Arbitrum, Polygon, Optimism and Gnosis to use, Lomuscio said.&nbsp;



To use the toolkit, dapps on these platforms will have to import it into their own architecture, Lomuscio notes.&nbsp;



“It doesn’t require any change to their smart contracts although we recommend to customize their UI to make it seamless for their dapp,” he said.



Other chains that will be able to deploy the toolkit in the near future include Linea, Scroll, zkSync, Base and Polygon zkEVM, just to name a few.



“The idea is that with hundreds or thousands of [layer-2s] and [layer-3s] that will launch on the market in the coming years, the experience of users will be completely fragmented and disrupted,” Lomusico said. “The only way for dapps to enable a seamless experience is to abstract the concept of chains and the underlying tech stack in general.”



This is similar to what exists in the internet world today, where users are unaware of which server or storage system websites are running on, Lomusico noted.



Dapps that have already adopted the chain abstraction concept today are betting platform Prode and liquidating bootstrapping protocol Fjord. Other dapps integrating the Connext toolkit still largely remain on testnet, with mainnet launches planned for the coming weeks.



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Connext is Connecting the Multichain with Chain Abstraction

James Cirrone

Crypto funding skyrocketed more than 330% this week, with approximately 16 firms raising more than $246 million.&nbsp;



Last week, <a href="https://blockworks.co/news/blockworks-56m-funding-week">13 startups brought in just $56 million</a>, including<a href="https://blockworks.co/news/blockworks-raises-12m"> Blockworks’ raise, which totaled $12 million</a>.&nbsp;&nbsp;



The last seven-day stretch for crypto companies to lock down more than $200 million was back in early April, when <a href="https://blockworks.co/news/layerzero-splashes-251m-week">LayerZero’s $120 million haul went down as a notable outlier.</a>&nbsp;



Auradine, a Silicon Valley-based Web3 infrastructure provider, took the top spot this week via its Series A, which raked in $81 million in a round co-led by Celestia Capital and Mayfield Fund. The publicly traded bitcoin miner Marathon Digital, which has its own venture arm, also participated.&nbsp;



Auradine’s CEO Rajiv Khemani told Blockworks the company wants to use the fresh capital to advance infrastructure technologies related to blockchain, privacy and artificial intelligence.&nbsp;



“We believe that the infrastructure is not mature and not high performance, and so our goal is to make that infrastructure secure, scalable, and sustainable,” Khemani said.&nbsp;



Semiconductor chip design is another aspect of Auradine’s business. Khemani said their continued progress is crucial to the blockchain and privacy-related products the company has in the works.&nbsp;



Auradine’s team consists of former professionals from the cybersecurity-focused Palo Alto Networks, as well as veterans of Nvidia and Intel.&nbsp;



<h2>Bitcoin, Bitcoin, Bitcoin</h2>



A couple of Bitcoin-focused (<a href="https://blockworks.co/price/btc">BTC</a>) startups follow suit.&nbsp;



River Financial, a bitcoin services provider, secured $35 million in a Peter Thiel-backed Series B Goldcrest, Valor Equity Partners, Esas Ventures, and Alarko Ventures also invested.



River has a host of bitcoin-related products, including a zero fee brokerage for recurring orders, full-reserve custody and mining. It also supports wallet services on the protocol, including via its layer-2 Lightning Network.&nbsp;



River CEO Alex Leishman said he’s seeing a new wave of interest in Bitcoin that’s been ushered in by institutional adoption.&nbsp;



“This year&#8217;s bank failures and bailouts have been a wake-up call, revealing the cracks of the traditional financial system and reminding us why Bitcoin is so important—it&#8217;s a secure path to a stronger and more transparent global economy,” Leishman said in a <a href="https://www.prnewswire.com/news-releases/bitcoin-company-river-raises-35-million-in-series-b-funding-301825979.html" target="_blank" rel="noreferrer noopener">statement</a>.&nbsp;



Bitcoin miner Cormint, meanwhile, raised $30 million in a Series A round led by Cormint President Jamie McAvity and Silicon Laboratories’ Chairman Nav Sooch.&nbsp;



Cormint plans to use the fresh funding to expand the mining capabilities of its Fort Stockton, Texas data center to 2.4 exahashes by the end of 2024.&nbsp;



<h2>Other notable fundraises</h2>



<ul>
<li>Story Protocol, a nascent Web3 firm focused on storytelling, <a href="https://twitter.com/NFTgators/status/1658814932387766277" target="_blank" rel="noreferrer noopener">raised</a> nearly $30 million in a round led by a16z&nbsp;&nbsp;</li>



<li>Red Beard Ventures locked down $25 million in a bid to support early-stage DeFi and Web3 gaming projects, CoinDesk <a href="https://www.coindesk.com/web3/2023/05/16/red-beard-ventures-closes-25m-funding-round-with-animoca-brands-superrare/" target="_blank" rel="noreferrer noopener">reported</a>.&nbsp;</li>



<li><a href="https://blockworks.co/news/dorsey-funding-bitcoin-voucher-service">Jack Dorsey led a $6 million seed raise for Azteco</a>, a provider of bitcoin vouchers.&nbsp;</li>



<li>Digital asset data and insight provider Power Your Own Research (PYOR) <a href="https://www.prnewswire.com/news-releases/pyor-raises-4-million-to-accelerate-global-institutional-participation-in-digital-assets-301829280.html" target="_blank" rel="noreferrer noopener">brought in $4 million</a>. Coinbase Ventures participated.</li>
</ul>



Lagrange <a href="https://twitter.com/lagrangedev/status/1659208481717751812" target="_blank" rel="noreferrer noopener">also raised $4 million</a> to develop its zero knowledge system. The funding was led by 1kx.



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Crypto Funding: Return to Form in $246M Week

LayerZero, a cross-chain messaging protocol, has established a bug bounty with a maximum reward of $15 million alongside partner Immunefi.



That number surpasses MakerDAO’s bug <a href="https://immunefi.com/bounty/makerdao/">bounty</a>, which offered a maximum of $10 million after launching in February 2022.



<a href="https://blockworks.co/tag/layerzero">LayerZero</a> will reserve the maximum bounty reward for those who find vulnerabilities at the “highest severity level,” and it will be paid out for each new bug found by participants.



LayerZero’s decision to partner with Immunefi mirrors the thinking of other prominent projects who have adopted the Web3 platform for their own bug bounties, including MakerDAO, Compound and Chainlink. Immunefi <a href="https://blockworks.co/news/framework-makes-its-largest-single-bet-yet-on-immunefi">raised $24 million in its Series A round</a> back in September 2022 and now <a href="https://immunefi.com/">claims</a> to have paid out over $75 million in bounties.&nbsp;



Immunefi’s terms for LayerZero’s bounty are <a href="https://immunefi.com/bounty/layerzero/">public</a> and outline the rewards by “threat level” and by “groups.” Group 1 includes the chains Ethereum, BNB Chain, Avalanche, Polygon, Arbitrum, Optimism, and Fantom, while Group 2 is for every other chain out there.&nbsp;



The highest threat level for bugs is “critical,” as defined by Immunefi. For smart contracts, a critical threat entails voting manipulation in governance proposals, direct theft of user funds and NFTs, among a host of other things.



According to Immunefi’s terms, “Critical smart contract vulnerability payouts for Group 1 are a minimum of USD $250,000, or 10% of the value at risk at the time of report submission, with a hard cap of USD $15,000,000, whichever is larger. Value at risk should be calculated primarily (though not exclusively) based on concrete and demonstrable funds at risk.”



For Group 2, the minimum payout is $25,000 or, again, 10% of the value that’s at risk. The cap is $1.5 million. 



Importantly, smaller payouts are up for grabs for lower threat bugs that participants are able to find. The lowest minimum prize is $1,000.



Supplementary rewards beyond minimum payouts or the 10% metric is “at the discretion of the team.”



Additionally, know-your-customer is needed to participate in this bounty. That means to get paid, you’ll have to send an invoice with your name, address and payment instructions. A government identification and an Office of Foreign Assets Control (OFAC) screening are also required. 



Blockworks reported in April that LayerZero <a href="https://blockworks.co/news/layerzero-locks-down-funding">secured $120 million in funding</a> to expand into the Asia-Pacific region’s gaming sector, boosting the company’s valuation to $3 billion.



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LayerZero, Immunefi Offer Bug Bounty With $15M Max Payout

Crypto startup fundraising ticked upward this week, with 18 different companies raking in approximately $251 million total — a modest increase from last week’s $227 million.&nbsp;



<a href="https://blockworks.co/tag/layerzero" target="_blank" rel="noreferrer noopener">LayerZero</a>, a cross-chain interoperability protocol, raised $120 million in its Series B round, securing the largest raise of the group by far and acquiring <a href="https://blockworks.co/news/crypto-valuation-slump-time-to-rise">a $3 billion valuation</a>. Investors in this messaging protocol for decentralized applications (dapps) included a16z, Christie’s, Sequoia Capital and OpenSea Ventures, just to name a few.



LayerZero’s multibillion-dollar valuation comes after crypto hardware wallet maker Ledger was said to be <a href="https://blockworks.co/news/crypto-funding-ledger-eigenlabs">valued at $1.4 billion</a> after its capital raise last week.&nbsp;



Blockworks previously reported that LayerZero <a href="https://blockworks.co/news/layerzero-locks-down-funding">has its eyes on the gaming industry</a>, where cross-chain messaging is becoming integral in the distribution of digital assets players win while playing.



<h2>A focus on permissionless token creation</h2>



Shifting over to digital currency, M^Zero Labs announced it had raised $22.5 million in a seed round. The lead investor was Pantera Capital with Road Capital, AirTree Ventures and others kicking in funds as well.&nbsp;



M^Zero intends to serve as a way to “permissionlessly mint currencies under decentralized governance,” according to its website.&nbsp;



Luca Prosperi, founder and CEO of M^Zero Labs, posted a thread on Twitter, explaining that his product will be a “neutral financial infrastructure” on top of Ethereum.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">8/🧵 AND SO WE BUILD &gt; We believe <a href="https://twitter.com/m0labs?ref_src=twsrc%5Etfw">@m0labs</a> can be neutral financial infrastructure on top of the neutral computing infrastructure that is <a href="https://twitter.com/ethereum?ref_src=twsrc%5Etfw">@ethereum</a> &gt; We think our dream can be achieved through technological superiority &gt; But we will take all the help we can get: contact@m0.xyz <a href="https://t.co/jjGO773R58">pic.twitter.com/jjGO773R58</a>&mdash; Luca Prosperi (@LucaProsperi) <a href="https://twitter.com/LucaProsperi/status/1644324447099183104?ref_src=twsrc%5Etfw">April 7, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Prosperi told Blockworks his aim is to launch M^Zero by the end of the year.&nbsp;



<h2>Other notable funding rounds this week</h2>



<ul>
<li><a href="https://twitter.com/RACA_3/status/1643777956895141891?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1643777956895141891%7Ctwgr%5E512c3b0235e78518dd05d6d3d8e3204d124a1439%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.bsc.news%2Fpost%2Fraca-announces-30m-strategic-investment-to-expand-web3-gaming">RACA</a>, a Web3 gaming ecosystem, raised $30 million for an expansion, $16 million of which came from DWF Labs.</li>



<li><a href="https://www.linkedin.com/posts/cyrusfazelmrfintech_as-bruce-lee-once-said-activity-7047844469198475264-_IPK/?utm_source=share&amp;utm_medium=member_ios">SwissBorg</a>, a European crypto investing platform, raised $23 million in its Series A round from thousands of investors.&nbsp;</li>



<li>Cryptocurrency exchange <a href="https://blockworks.co/tag/bitget" target="_blank" rel="noreferrer noopener">Bitget</a> secured $10 million from Dragonfly Capital.</li>



<li><a href="https://twitter.com/UnstoppableFi/status/1643006808229830657?s=20">Unstoppable DeFi</a> raised 2,050 ETH, or about $3.8 million, through the launch of their new token UND.</li>
</ul>



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Crypto Funding: LayerZero Makes Big Splash in $251M Week

Ben Strack

The crypto space has seen two companies raise billion-dollar valuations in the past week, with one experiencing a significant value bump that has become rare in recent months.&nbsp;



One crypto advisory firm partner called the latest fundraise in the space — and its tripled valuation — an “unusual” case, but noted that it “makes sense.”&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



<a href="https://blockworks.co/news/layerzero-locks-down-funding">Investors valued crypto protocol LayerZero at $3 billion</a> as part of a $120 million fundraise led by a16z and Sequoia Capital.&nbsp;&nbsp;



&#8220;There is no longer any question that the future of crypto and web3 is multi-chain, [and] LayerZero has built critical infrastructure that makes that possible,” Ali Yahya, a general partner at a16z, told Blockworks in an email. LayerZero is already <a href="https://twitter.com/LayerZero_Labs/status/1600559045773254657">handling</a> more transactions to and from major ecosystems than the native bridges.”



Ilya Volkov, CEO and co-founder of fintech platform YouHodler, said the crypto industry could witness a pick-up in multibillion dollar company valuations, particularly in certain segments.&nbsp;



“I believe we’ll see some unicorns among companies who successfully integrate crypto into traditional finance,” he said. “Other good examples will include companies who successfully utilize the blockchain technology for common, everyday use cases.”



LayerZero previously closed a $135 million round in March 2022, which valued it at roughly $1 billion.&nbsp;&nbsp;



Hardware wallet company Ledger also raised most of a $109 million funding round that valued it at roughly $1.4 billion, Bloomberg <a href="https://www.bloomberg.com/news/articles/2023-03-30/crypto-wallet-maker-ledger-locks-in-bulk-of-100-million-funding-round?leadSource=uverify%20wall&amp;sref=3REHEaVI">reported</a> last week.&nbsp;



Unlike LayerZero, Ledger’s raise valued the company about the same as a round in 2021 did.&nbsp;



<h2>A crypto funding rebound?</h2>



The implosion of Terra’s algorithmic stablecoin last May was among a slate of events that amplified the industry’s most recent bear market. Crypto exchange FTX, which was once valued at $32 billion, filed for bankruptcy last November. The company’s collapse was responsible in part for spurring a further decline in crypto funding.&nbsp;



A <a href="https://dl.airtable.com/.attachments/127145c910ee58c45da80fee4824f69c/7ddd511d/ArchitectInsights-2022CryptoMAandFinancings.pdf">report</a> by advisory firm Architect Partners found that while crypto private financings hit a record last year, late-stage financings slowed down during the second half of 2022.



From the first quarter in 2022, to the year’s last quarter, median seed and early-stage valuations dropped 36% and 30%, respectively.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1640" height="1118" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=1024&amp;h=1024" alt="" class="wp-image-51092" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=1640 1640w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=377 377w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=321 321w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/Crypto-private-financings-chart.jpg?w=80 80w" sizes="(max-width: 1640px) 100vw, 1640px" /></figure>



The report argued that decreased valuations were necessary for the crypto industry, stating that “high-flying and indefensible valuations fostered an irresponsible investing and operating environment.”



Steve Payne, a partner at Architect Partners, said late-stage technology valuations overall are down about 50% from a year ago, adding that crypto deals are consistent with this.&nbsp;



He called LayerZero an “outlier.”&nbsp;



“We aren’t seeing many $100 million-plus capital raises,” Payne told Blockworks. “But this one makes sense — it’s building out infrastructure for web3 developers, not focused on trading [or] speculative use cases.”



The capital injection by more traditional venture capital firms, such as Sequoia, Samsung Next and BOND, reflects what he called “a familiar model for Web2 investors.”&nbsp;



LayerZero’s three-fold valuation rise is “unusual” according to Payne, however.



“Most recent rounds have [been] closer to flat rounds,” he said. “This one reflects a rapid increase in usage and concomitant valuation increase.”



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LayerZero’s Boosted Valuation of $3B an ‘Outlier’

Blockchain messaging protocol LayerZero has secured a seven-figure fundraise backed by the likes of a16z, OKX Ventures and Sequoia Capital. 



LayerZero’s latest Series B funding round, the company said on Tuesday, resulted in a $120 million haul that included additional participation from BOND, Christie’s and Circle Ventures, among others.



The fresh fundraise follows a $135 million round that the company had secured the year prior. The company is now valued at around $3 billion on its latest capital inflows. LayerZero raised a $6.3 million Series A in 2021, <a href="https://blockworks.co/news/layerzero-adds-6-3m-in-series-a-funding-led-by-binance-labs-and-multicoin-capital">Blockworks previously reported</a>.



The cross-chain messaging protocol enables decentralized applications (dapps) deployed across multiple blockchains and allows projects to interact without the need for an intermediary — such as a <a href="https://blockworks.co/tag/bridges">cross-chain bridge</a>.



The main idea behind the raise, according to Bryan Pellegrino, the co-founder and CEO of LayerZero Labs, was to streamline the team’s insights and pipeline into the Asia-Pacific region’s (APAC) gaming sector.&nbsp;



“From inception, [LayerZero] has been very DeFi focused in general…but we’ve also been getting a lot of inbounds from gaming and NFTs,” Pellegrino said. “We’ve been keeping tabs on where the news games are coming from, and a disproportionate amount are coming from the APAC region.”



Specifically, according to Pellegrino, there have been strong developer communities bubbling in major markets across Korea, Japan and Southeast Asia.&nbsp;



“For us, we just want to make sure that we’re working super closely with the studios, we want to make sure that the OFT standards are baked in by default, and we’re going to make sure localization in all of the markets,” he said.



<h2>Cross-chain messaging hits gaming</h2>



LayerZero has set its sights on the gaming market, as do many of its latest investors.



Many games that run on Web3 rails today run on application-specific blockchains, but in-game items are still bought and sold on Ethereum, Pellegrino said, because “that’s where all the liquidity is.”



Games, in other words, can be based on your own blockchain. But when it comes to selling digital assets players win in the process of playing, cross-blockchain messaging comes into play.&nbsp;



“There’s a game now where you’re playing a game on this side chain, and once you kill the boss, it sends [messages] that mutates the metadata on your NFT that lives on Ethereum, and it automatically updates your Twitter profile picture,” Pellegrino said. “So, your NFTs could be evolving in real-time.”&nbsp;



Pellegrino says the funding fundraise will be used to expand the LayerZero team and grow the company’s overall market presence and standing.



Later down the road, after the protocol matures, LayerZero could consider governance token airdrops — though it’s not expected to happen any time soon.



“Not right now,” Pellegrino said. “This raise is strictly for the expansion of the company.”



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LayerZero Locks Down $120M in Fresh Funding for APAC Gaming Push

Jack Kubinec

<div id="highlights-block_62e30a11f6d23" class="highlights">
 <ul>
 <li>The chain is a layer-2 optimistic rollup that financially rewards “guards” for verifying transactions</li>
 <li>“Rather than deploy your dapp on ten different chains, why not deploy it on the bridge protocol that’s already connected to every chain?” Synapse tweeted</li>
 </ul>
 
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Crypto builders are rushing to <a href="https://cms.blockworks.co/bridge-protocols-race-to-win-consumer-trust/" target="_blank" rel="noreferrer noopener">restore trust in bridges</a> as cross-chain hacks have cost crypto users nearly $2 billion this year. But the Synapse Protocol hopes to win over disaffected investors by getting rid of bridging altogether.



Synapse Chain, announced today, would create a single-chain solution to cross-chain swaps. In theory, the chain could lower costs and increase security.



At a basic level, cross-chain bridges are protocols that transfer information between blockchains. The most common bridge use case is moving cryptoassets between chains. In that case, the bridge holds a user&#8217;s assets in a smart contract while deploying a “wrapped” IOU asset on the bridged chain.



Synapse Chain would do away with asset wrapping by creating a blockchain directly compatible with different cryptoassets, Synapse explained <a href="https://synapse.mirror.xyz/L6dBb7aXIJ1Ll5_sxP2bIJxVEYNd43ZzIV6dRylQJxw" target="_blank" rel="noreferrer noopener">in a blog post</a>.



For instance, if a user purchased hypothetical token XYZ on the Ethereum network, she could potentially use a Synapse-powered decentralized exchange (DEX) to directly convert ETH to XYZ without bridging tokens, saving on gas fees and increasing security.



Synapse’s “single execution environment” is built on Ethereum but theoretically is compatible with any blockchain.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">3/ By leveraging Synapse’s messaging system and bridge, Synapse Chain will become the organizational hub of all cross-chain activity. Rather than deploy your dapp on ten different chains, why not deploy it on the bridge protocol that’s already connected to every chain? <a href="https://t.co/XqZrLE8mSM">pic.twitter.com/XqZrLE8mSM</a>&mdash; Synapse Protocol (@SynapseProtocol) <a href="https://twitter.com/SynapseProtocol/status/1552665932027334657?ref_src=twsrc%5Etfw">July 28, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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The layer-2 uses optimistic proofs, where all transactions are assumed to be valid pending fraud claims from so-called guards.&nbsp;



Synapse believes optimistic verification will help the chain avoid adding to the nearly $2 billion in assets stolen from cross-chain protocols this year. Many hacked bridges held assets in multi-signature wallets that went light on the “multi.” <a href="https://cms.blockworks.co/defi-cross-chain-horizon-bridge-hacked-for-100m/" target="_blank" rel="noreferrer noopener">The Harmony Horizon bridge</a>, for instance, had five keys, only two of which needed to be compromised by the hacker.



An optimistic system requires every validator to approve transactions, as every guard tacitly verifies data when it does not submit an allegation of fraud. Synapse incentivizes guards to do their jobs by confiscating their SYN governance tokens when faulty transactions are marked valid, a mechanism known as slashing.



SYN jumped roughly 40% after the Synapse Chain announcement, trading around $1.70 Thursday afternoon.



Synapse’s optimistic rollup sequencer will initially be run in-house, though the protocol hopes to follow other layer-2s toward decentralization.



Still, <a href="https://vitalik.ca/general/2021/01/05/rollup.html" target="_blank" rel="noreferrer noopener">optimistic rollups have been criticized</a> for the tradeoffs inherent to the use of fraud proofs, such as a relatively long withdrawal period to move funds to the Ethereum mainnet, and Synapse is not the only team rethinking bridges. 



Axelar and LayerZero are other major players in the post-bridge space. In a Telegram message, LayerZero CEO Bryan Pellegrino called the protocol “neither a bridge nor a blockchain” that moves assets directly between contracts.



Similarly, the Synapse Chain, which is expected to go live on a public testnet within weeks, doesn’t necessarily require assets to be bridged at all.



“A lot of the assets won’t have to be sent into the rollup, they can live on a chain and the messaging system will attest to their value,” said Synapse’s chief operating officer Max Bronstein.



“If you trust the security of the messaging system, [then] you trust that the asset in the rollup is the same as the asset on the native chain.”



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Synapse Chain Eyeing Bridgeless Asset Swaps

On today&#8217;s episode of &#8220;<a href="https://youtu.be/wkd0zxTkN-E" target="_blank" rel="noreferrer noopener">Empire</a>,&#8221; Jason Yanowitz and Santiago Roel Santos are joined by Bryan Pellegrino, co-founder of LayerZero. LayerZero is an interoperability protocol that wants to connect every contract on every chain. This is a can&#8217;t-miss episode on blockchain bridges and the future of interoperability.



They discuss how LayerZero works, how Stargate enables seamless cross-chain swaps, the flaws of synthetic/wrapped assets and why the future will be cross-chain.



Plus, hear more on:



<ul><li>interoperability</li><li>being a crypto builder</li><li>how to get involved in building</li><li>and so much more!</li></ul>



Check out what they had to say in the video below.👇



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<iframe loading="lazy" title="How LayerZero Will Power A Multichain World | Bryan Pellegrino" width="1024" height="576" src="https://www.youtube.com/embed/wkd0zxTkN-E?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
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<h3>About the show</h3>



&#8220;Empire&#8221; is a twice-a-week show. On Thursdays, Jason interviews crypto industry movers and shakers to talk about their struggles, bold moves and tough decisions. Friday&#8217;s weekly roundup episodes feature <meta charset="utf-8">co-host Santiago Roel Santos and cover the top news from the past week.



For any NPR or Guy Raz fans out there, you can think of &#8220;Empire&#8221; as a &#8220;How I Built This&#8221; for the bitcoin and crypto industry.



Subscribe to &#8220;Empire&#8221; today on&nbsp;<a href="https://podcasts.apple.com/us/podcast/empire/id1554930038" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;or&nbsp;<a href="https://open.spotify.com/show/4UTePv1CR3APdKOiosR3Iq" target="_blank" rel="noreferrer noopener">Spotify</a>. Watch episodes on&nbsp;<a href="https://www.youtube.com/playlist?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" target="_blank" rel="noreferrer noopener">YouTube</a>.



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Podcast: How LayerZero Will Power A Multichain World | Bryan Pellegrino

Jacquelyn Melinek

<div id="highlights-block_614360bf86b5c" class="highlights">
 <ul>
 <li>Participation in the round includes Sino Global Capital, Defiance, Delphi Digital, Robot Ventures, Spartan, Hypersphere Ventures, Protocol Ventures and Gen Block Capital</li>
 <li>The funds will be used for the further creation of its endpoints across the ecosystem, Bryan Pellegrino, co-founder of LayerZero Labs told Blockworks</li>
 </ul>
 
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Binance Labs and Multicoin Capital co-led a $6.3 million Series A funding round for LayerZero, a new omnichain interoperability protocol, the company announced Thursday. 



Participation in the round includes Sino Global Capital, Defiance, Delphi Digital, Robot Ventures, Spartan, Hypersphere Ventures, Protocol Ventures and Gen Block Capital. The project has raised $2 million in a seed funding round bringing its total fundraising to $8.3 million to date, LayerZero said. 



The funds will be used for the further creation of its endpoints across the ecosystem, Bryan Pellegrino, co-founder of LayerZero Labs told Blockworks.&nbsp;



LayerZero has not been launched yet because it’s currently under three audits that are expected to be completed at the end of October, but Pellegrino said he expects the network to launch shortly after.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="323" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg" alt="Omnichain diagram" class="wp-image-7992" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-LayerZero-1024x323.jpg?w=1139 1139w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



“For cross-chain bridging and messaging, almost every existing approach falls into one of two broad categories. The first is having a consensus forming middle chain validate and forward messages between chains. The second is running a light node on-chain,” Ryan Zarick, co-founder and CTO of LayerZero Labs <a href="https://medium.com/layerzero-official/layerzero-an-omnichain-interoperability-protocol-b43d2ae975b6" target="_blank" rel="noreferrer noopener">wrote in a blog post</a>.



The omnichain protocol unites decentralized applications, or dapps, across blockchains. Most people think of cross-chains protocols, which is like having a bridge from Ethereum to Avalanche and while Ethereum has bridges to many other chains (BSC, Polygon, Avalanche, Solana, Fantom, etc.), Avalanche does not connect to those, Pellegrino noted. 



<div class="wp-block-image"><figure class="alignright size-full"><img decoding="async" loading="lazy" width="458" height="189" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-layerzero-logo.jpg" alt="" class="wp-image-8003" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-layerzero-logo.jpg?w=458 458w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-layerzero-logo.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-layerzero-logo.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-layerzero-logo.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-16-layerzero-logo.jpg?w=80 80w" sizes="(max-width: 458px) 100vw, 458px" /></figure></div>



“So we might call Ethereum multi-chain but each of it’s connected chains are still siloed and have limited communication pathways. Omnichain is when all chains are connected to each other chain directly and natively,” Pellegrino said.



Its protocol runs an “Ultra Light Node” that provides the security of a light node with the cost-effectiveness of middle chains, Zarick said.&nbsp;



It connects disparate blockchains by passing messages between chains instead of centralizing security around a single hub, which allows for cheaper transactions but a single point of failure, it said. On-chain light nodes are secure but expensive while middle chains are inexpensive but less secure, Zarick said.&nbsp;



“I think most people can see that the proliferation of chains is not something that is going to stop anytime soon,” Pellegrino said. “We’re never going to have a chain that does it all perfectly, and different use cases have different needs. LayerZero enables dapps to take advantage of the benefit of each chain and utilize the best parts of them,” Pellegrino added.



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