What is LayerZero, a $3 billion Airdrop candidate project
Here's what you need to know about blockchain interaction technology and a possible airdrop of a project backed by leading venture capitalists
In April, LayerZero Labs, which creates technology to help existing blockchains interact with each other, announced it had raised $120 million in an investment round led by a16z crypto, the cryptocurrency arm of venture capital firm Andreessen Horowitz.
The project launched less than two years ago, has a total investment of $250 million at the time of publication. This is not the first time for LayerZero's massive funding round is one of the largest among cryptocurrency companies in 2023, and LayerZero Labs' valuation of $3 billion puts it on par with market giants like Coinbase, which has a market capitalization of over $13 billion.
Along with heavyweights Andreessen Horowitz and Sequoia Capital, more than 30 investors have invested in LayerZero Labs, including the venture capital arm of Samsung, auction house Christie's, USDC stablecoin issuer Circle, NFT marketplace OpenSea, crypto exchange OKX, and others. The participation of representatives of different spheres, directly or indirectly related to the crypto-business, probably indicates the demand for the project solutions and their subsequent integration into a wide range of services of the Web3 segment.
From one network to another
LayerZero Labs co-founder and CEO Brian Pellegrino have assembled a team of developers to solve the problem of isolating different blockchains and existing crypto assets and applications on them. He himself calls LayerZero a "messaging protocol"-software code that allows app developers to send data, for example, from Ethereum to Solana.
"Messaging" refers to many scenarios and operations, including, among others, converting coins or tokens from one network to coins or tokens in another. Thanks to so-called bridges using LayerZero, this transfer is faster, cheaper, and more convenient than existing solutions - both decentralized and those that involve an intermediary exchange or exchanger.
In a press release accompanying the April investment round, a16z lead partner Ali Yahya stated that more transactions already pass through LayerZero than in all existing bridges of known ecosystems. He added that "there is already no doubt" that the future of cryptocurrencies is "multichain," that is, the process of interaction between multiple blockchains and the assets, services, and applications that exist on them. LayerZero already uses decentralized crypto exchanges, including PancakeSwap, SushiSwap, TraderJoe, and Uniswap.
Pellegrino dropped out of college to become a professional poker player. When the U.S. government banned online poker in 2011, he already had the capital to launch his first startup. While studying computer science in college, he created a fantasy sports website, which he sold two years after launching. Then his entrepreneurial career continued: he worked with professional baseball teams, did research on machine learning algorithms, and launched another business before LayerZero.
LayerZero Labs now employs 42 people and is co-founded by Ryan Zarick. Employees work from offices in Vancouver and Hong Kong. The company earns money by charging a commission for every interaction with its protocol, but Pellegrino said the significant amount of funding allows the company to focus on more global goals than maximizing profits alone.
Partners plan to continue to dominate the growing field of companies that offer developers ways to transfer data between different blockchains. LayerZero's competitors include the Cosmos project, whose developers also position it as a protocol through which different blockchains can send and receive data.
"Our goal is to win and capture the whole market in this niche," Pellegrino told Fortune. He said LayerZero is using investor funds to expand its Web3-gaming footprint, as well as expanding in the Asia-Pacific region.
LayerZero is on the radar for more than just in-demand technical solutions and billion-dollar business valuations. Participants of the crypto community consider the project one of the main candidates for a major airdrop - the distribution of tokens in the form of encouragement of active users of projects of the ecosystem.
The company itself has not announced the giveaway, as well as the launch of its own token in principle, but certain business patterns and the significant size of venture capital investments act as indirect evidence that LayerZero may follow the example of sensational airdrop projects such as Aptos, Blur, Optimism or Arbitrum. The latter went beyond the cryptocurrency community in terms of excitement when it became widely known that participants in the giveaway received thousands of dollars worth of tokens.
Service developers often do not announce tokens at launch, but similar business patterns, as well as the experience of their competitors, help community participants determine which projects will sooner or later decide to release their own asset and for which types of activity they can be rewarded.
Even before the sensational distribution of tokens from Arbitrum, the so-called drop hunters (those who participate in projects of the candidate project ecosystem in the expectation of receiving tokens) had LayerZero in the list of the most obvious applicants.
It's not hard to find instructions or detailed checklists in blogs, topic channels, or chat rooms with a set of activities in projects that use LayerZero solutions, claiming to get an airdrop. It even goes so far that even quite large resources publish instructions on how to participate in an unannounced airdrop, such as the OKX exchange blog. Most of them duplicate each other in one way or another - the potential candidate for distribution should be active in the social networks of the project, attract new participants, use existing services in the test network, etc.
Project SUI, which was also considered in the community as a candidate for airdrop, instead arranged a presale of tokens through cryptocurrency exchanges, which became quite profitable for qualified participants. However, judging by the discussions in the thematic resources, there is almost no doubt in LayerZero's airdrop for everyone who follows the field one way or another.
Often, even in the official social networks of the project, you can find an open discussion of the accrual of activities or advertising of paid services to create a number of accounts to participate in the airdrop. Some users of thematic chats openly write about the fact that they have already involved dozens or even hundreds of wallets and accounts, waiting for the distribution of tokens.
It remains to be seen how developers will react to this if they actually arrange an airdrop. One way or another, from a financial point of view, they benefit from any interaction with the protocol, both from a really interested user in the project, and from another "airdrop hunter".
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