By mirror.xyz on September 30, 2023
The development of Web3 has led to the influx of hundreds of new chains, each promising to be better than the last - more scalable, safer, more decentralized (or just faster - in 90% of cases). Initially, there was nothing wrong with this, as it drove adoption and innovation. Each chain, after all, offered something new, creating a multi-chain environment. Then a problem emerged. "I'm on Ethereum, but there's a cool token listing on BNB Chain; I need to be there." The need for interchain operations grew with the emergence of new chains, leading to the creation of interchain bridges (which some view negatively, likening them to a cancer or a backstab to the crypto space). About 50% of all exploits in DeFi are bridge exploits, amounting to roughly 2.5 billion dollars. The second issue was liquidity fragmentation. We need liquid assets that can be exchanged without slippage. We need this liquidity on every chain, but it's fragmented since it cannot be combined. There was a need for some sort of infrastructure/standard that would be safe and easy to implement - this is when LayerZero appeared. Significant progress has been made since. LayerZero has been deployed on over 30 networks. The industry abhors a vacuum, so new solutions emerge, like CCIP from Chainlink. CCIP is a new product, officially launched on the mainnet on July 17, 2023, and is currently in its early access phase, being tested by protocols like Synthetix and AAVE. However, it's essential to understand what it is and initially compare the two technologies. Since LayerZero has been in the market longer and more people are familiar with this infrastructure, we will start by discussing CCIP.
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