Trustless omnichain interoperability is reshaping the future of digital assets. Get ready to learn just how massive its impact will be in this episode. Joining us on the Edge of NFT starship, Irene from LayerZero helps us uncover the secrets behind the groundbreaking technology that allows NFTs to traverse seamlessly across multiple blockchains without the need for trust or intermediaries. From mind-blowing standards like the omnichain fungible token to the mind-bending possibilities of owning NFTs across various chains, you won't want to miss this intriguing conversation. Join us as we embark on a journey through the future of NFTs, exploring how technology is evolving to provide unprecedented trustless interoperability, and changing the game for creators, artists, and collectors worldwide.
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Beyond Borders: Taking Your NFT Collection Multichain With Irene From LayerZero
My name is Irene, Head of Strategy at LayerZero Labs, the creator of the leading Omnichain Interoperability Protocol. I'm on the Edge of NFT, enabling the creation of Omnichain NFTs and seamless consumer and gaming experiences. Enjoy.
Stay tuned for this episode to learn more about the backstory of how LayerZero coined the term trustless Omnichain Interoperability Protocol, how grabbing a cup of coffee with a colleague led to a partnership that is changing the cross-chain NFT game with Magic Eden, and finally, how Cristiano Ronaldo is creating exclusive NFTs for fan experiences.
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This episode features Irene Wu, who is the Head of Strategy at LayerZero Labs, the leading interoperability protocol. Before joining the company, she worked as an investor at Insight Partners, where she focused on blockchain infrastructure and developer tools. The developer by trade, she helped design and engineering positions at IDEO, a leading global design company in JP Morgan.
Irene studied Computer Science at Harvard and cofounded Harvard Blockchain before leaving to join the founding team at Rowing Blazers, a VC-backed men's wear startup that still operates. LayerZero is a user app on-chain tool using an Oracle and relayer. When UA sends a message from chain A to B, Oracle forwards data to chain B. The relayer confirms the delivery. Think of it as a high-tech mill system between blockchain islands. We're going to dive deeper into this with Irene. How are you doing?
I am doing great. Thank you so much for having me.
You have such an amazing background. I always love to hear more about that. We dove a little bit into LayerZero itself but I want to hear it from you. Tell us a little bit more about the essence of LayerZero.
LayerZero is the leading Omnichain Interoperability Protocol. What it enables is communication between smart contracts on different chains. You can think about the world we're in where there isn't just one chain. It's not just Ethereum. There are tens of L2s, hundreds of app chains, Alt-L1s, some non-EVM, and some EVM.
Every single one of these chains is like a different planet. They're not different cities with inherent infrastructure to communicate or move assets or information between each other. There was no way to confirm the state across all of these in a way that was decentralized, secure, and cost-efficient until LayerZero was invented.
An analogy I like to use is that layer zero is TCP/IP for blockchains. TCP/IP was the collection of underlying protocols that scaled the internet and enabled packets of information to be sent from server to server. Under the hood, it enables for communication system between different chains. For end users, NFT collectors, and gamers, it's chain abstracted. You're engaging with something fun, using a FinTech application, buying a collectible, and not getting into the complication of multiple gas tokens and chains. That's where we're headed.
The analogy I like to pull up a lot is that there are many cool islands out there in the world of Web3 but not enough bridges and infrastructure in place to try to bridge all of these amazing ecosystems together. LayerZero is trying to go, attack, and help to be that. One of the ways that you're doing that is trying to be the premier trustless Omnichain Interrupt Protocol. The trustless Omnichain conversation comes up a lot but what does that mean for LayerZero? How are you all truly going about approaching that?
The origin story might give you some color on this. We have our three cofounders, Brian, Raz, and Caleb. They were three engineers who met in college in a small town in New Hampshire. They were doing research at an interoperability research center. Years later, they reconnect and want to build something. They had hacked on projects together for several years.
They were all interested in crypto. One of them had been a longtime professional poker player. The other two are doing AI research with Facebook and professional baseball teams. They wanted to build a game. I can tell you they are gamers every single day at 6:00 PM in our office. All our engineers take a twenty-minute break and all hop onto the same game and play together.
They wanted to build a game that enabled the movement of assets and actions on one chain that triggered something else on another chain between the Ethereum and BNB chains. At the time, it was called Binance Smart Chain. It was novel and quite radical that there was a new chain that had emerged that had volume and activity that wasn't Ethereum.
When they surveyed what existed out there, which are called to solve this problem but at the time were only called bridges and diligence them as engineers, they realized they would never use any of those. From a technical standpoint, they were incredibly insecure from a user experience. Once you've integrated it, it is tiresome. It involved many clicks. The burden was often put on the end user to retrieve the assets they wanted on each of the chains.
Hacks abound. In 2022, there were five notable, probably more, multiple 100 million bridge hacks. They set out to build a bridge for this game. As they were doing that, they realized what's a lot more interesting is the messaging layer below it, which enables that movement of assets. Bridging is one use case for transferring value from one chain to another. You can do many other things with this generalized messaging layer. That's when they set out to build something quite radical.
It was LayerZero that started to use the phrase Omnichain to describe this paradigm shift towards interoperability between chains via messaging, not just token bridges. There are three primary design principles that have informed the way that we build everything. This is what enables us to say with so much confidence that we have built the most modular and secure trust-minimized interop protocol. One of those three principles is amenability. All of the smart contracts that comprise the layers of the protocol are entirely non-degradable.
I can nerd out on the security side of that if you guys are interested in why that's important but it certainly guarantees that the protocol is a true protocol and not a service. A service is something that requires the liveness and dependency on a third-party company. It's like using an Amex card, in a way. You're dependent on American Express to live up to its promises, not change its fees, and all of those things.
The second one is permission. There are multiple ways in which LayerZero is permissionless. Any application developer can build with LayerZero doesn't need to get in touch or sign a contract with us. It's open source. You can start building. In the off-chain validation layer, you can run your components. If you'd set it at the beginning, the error is this architecture of Oracles and relayers. You can run any oracles or relayers. You can select any that you'd like and create your consortium of off-chain entities that are entirely independent. That creates this shard of risks specific to your application.
It means that your security is not dependent on trusting LayerZero Labs but trusting your team and multiple clients because of the diversity of teams like Chainlink, Google Cloud, and Polyhedra, which is the creator company of the ZK light client. Many other incredible off-chain entities are being built and offered by the best teams in the world and are permissionless in the sense that because our contracts are immutable, we can never change and introduce some censorship here. That third tenet is censorship resistance.
LayeZero is the only protocol that is all three of these. By censorship resistance, we mean that all of the messages can only be sent in the order in which they're submitted. We can't reorder the messages or withhold any of them. That's incredibly important in this regulatory environment in which maybe some nation states some government will say, “If you're using blockchains to handle voting, we want the ability to block particular messages.” These messages are votes. It's information and tokens. It's incredibly important that the integrity of that information is preserved. That extends to gaming and NFTs, which I'm excited to talk about.
Thank you for that very thorough background. It's good to know that origin story because that term has been utilized and thrown out all over the place. It's cool to know that LayerZero is tokening and being a leader in trying to truly be that trustless Omnichannel partner, especially through the three ways that you are all going about putting the values and systems in place, that the integrity around LayerZero can stay there.
There's been a lot of other bridges and protocols that, as things got tougher, things went sideways, put their users in a bad spot, and aren't necessarily doing things to rectify or trying to walk back how they got there in the first place. You all are being very thoughtful in your approach of making sure that as you are putting this out for the world to use, they can rest easy at night knowing that you're building this so that they don't have to worry about a lot of the challenges that we saw in the last bull cycle.
That part's been cool, and because of it, you've been able to make a lot of cool partnerships. You brought up NFTs and a few of these other things. One of them was the cross-chain NFT platform, Magic Eden. You all teamed up. I’m curious if you could shed some more light on what all that exciting partnership extends to.
Magic Eden is a team that I've admired for years. When I first joined LayerZero, they were very much on my radar. I've been interested in generative art and different forms of media since I was young. Magic Eden was the NFT marketplace to experiment early on with aesthetic and user experiences. They were the Solana NFT marketplace for a long time. Solana has a very distinct NFT community culture.
I started to have some interesting user discovery and product research calls with the Polygon team. What they were telling me was that as some of these prominent NFT communities were bridging or trying to migrate their communities over to Polygon from other chains, their end users were running into difficulties.
Some of these difficulties involved submitting transactions and needing multiple gas tokens. It's not a sexy problem but it's a real one because when you're transacting on chain, you always have to pay gas unless the gas is a subsidy. Still, to be an informed user of anything that touches a blockchain, you will need to have gas tokens in your wallet and sign transactions.
Some of these users coming from Solana had no idea what MATIC was. They’re like, “Where do I even get that? I only know what a SOL is. I'm only familiar with this one wallet but what I want is to be able to move my NFT from Solana to Polygon. I can rejoin my community and use this NFT in different metaverses in games and rewards programs.” That resonated with me because I think every single day about how to abstract away the complexity of different chains and also how to create world-class user experiences.
In our industry, because it's a very new industry, we're several years behind where Web2 software development is. It's traditional to use our research interviews at Web2 software companies. Crypto is seeing on Twitter who's complaining the most and maybe listening to that. I dove into doing a bunch of interviews with people who did complain a bunch on Twitter about some of these NFT swaps across chains or bridging experiences. Also, some experiences minting their NFTs as Omnichain, which I'll get into a bit later.
I happened to get coffee with Matt Cenex, who leads BizOps and Magic Eden and previously was the GM of Magic Eden Launchpad, and also a few of his colleagues. Over that coffee, it was one hour of us jamming on ideas. As soon as I brought this up, they were like, “Yes, we hear this all the time. We're trying to feed the cross-chain NFT marketplace. How can we encourage users to even consider buying an NFT that's on a different chain than they're used to if they run into this roadblock and then churn?” They close the tab, get coffee, and do whatever else.
That was the beginning of this product development partnership. We ended up creating two different scopes of this engagement. The first one is we built Gas Station together. Gas Station is the name of this product that was launched. It is directly in the checkup flow of Magic Eden. It enables precise conversion of the gas tokens that you have in your wallet for the gas tokens you need for whichever NFT you're purchasing, regardless of what chain.
Previously, you may have to open a different tab, go to a centralized exchange, go to some decks, and get the gas tokens you need. Maybe it's ETH, MATIC, or SOL. Now, it is direct in the checkout flow. It's swapped for you. It's transparent and decentralized. It's powered by a protocol, not a service. You're not hoping that the service company has the funds somewhere and isn't going to rug you. It's very ethos-aligned.
The other scope of work that we're excited to dive into with them was enabling Omnichain NFTs to be minted by their launchpad. I can talk about that in a moment, like what trends or insights led to that collaboration. We're so thrilled to get Gas Station out. Magic Eden is a team that is shipping in the bear market.
There are a few points I want to circle on. One is the power of making sure you're continuing to meet people in person. Having that, I've found that you're able to flow with people a little bit better in person when you're talking through some different ideas and scenarios. The synergy around that user experience, the first time I had to deal with bridging, it was expensive. It took a lot of time. I had to want to do it because the friction was so high.
The other side of it, and you brought it up, and I'm glad you did, was the concept of if you're dealing with this potential bridge that you haven't dealt with before could rug you. You're going in and giving them this money. You're hoping you get the other money on the other side but once you send that money, you're hoping for the best.
Also, setting up systems where you're already on a platform that you trust and you're trying to make this seamless transaction without having to necessarily own all the different tokens or gas. You can only have to deal with one. Everything else that's happening in the background is making that user experience that people have been craving for the last several years.
I'm glad to hear that LayerZero and Magic Eden are working together to make that happen and have it. People can use this. The other side of it, the NFT side, trying to go cross-chain on NFTs has been a headache. You all are actively going and making that easier. I’m curious to learn more about that, even for myself.
I'm curious. Have you partaken in any of these NFT migrations from one chain to another?
Yes, and it's horrible. It's a tougher experience than bridging. The NFT migration has truly been a challenge that I still have to deal with. I'm very excited to hear about this.
What I am most excited about on the NFT innovation front is what you can do with Omnichain NFTs that are natively Omnichain. We, at the inception of LayerZero, created a standard called the OFT, which is the Omnichain Fungible Token. That was the Stargate token. Stargate is a protocol that our team built. It's the most widely used native asset bridge. It's built on top of LayerZero. The Stargate token was the first OFT.
What this means is that Stargates token is native on multiple chains and can seamlessly transfer between them without having to bridge. It doesn't have to go through a token bridge where it gets locked in and you mint a synthetic asset. When I say synthetic asset, what I mean is it doesn't get locked in and get this version of wrapped Stargate. If you have a wrapped version of something, it's like a coupon or IOU saying, “When you want your real thing, you have to go back across the bridge and then you claim it.”
As long as you're in this ecosystem, you are using a representation of what you own that we are holding onto for you. Bridge hacks happen. There's a bug in the smart contract and you lose all the real value. Those synthetic assets are worthless. Imagine that you wanted to move your NFT from Polygon to Arbitron. It got locked into this NFT bridge and that smart contract experienced an exploit. You legitimately lost the real thing.
The whole thing with NFTs is that you own the real deal. It's yours everywhere. It’s like how when you own a Rothko painting. It is yours, even if it's in Miami or London. Previously, the options that you had to move these around were ones that did not uphold the real vision of NFTs. We created a standard that was a twin of that for nonfungible tokens called the ONFT standard.
Candidly, it didn't do much with it. It was sitting in our GitHub repos. A group of sleuthing devs found it and created the first Omnichain NFT project called Gh0stly Gh0sts. This was several years ago. It was a grassroots project, like sketched ghost artwork, depending on which chain you minted it on. They used our primitive in a creative way. On several chains, if you minted it on Polygon, the outline of your Gh0st would be purple. If you moved that NFT to Avalanche, the background of the NFT was red. The artwork would mutate depending on the origin of the NFT and where the NFT was.
That's quite simple to do from an engineering perspective but it was so radical to see. They were number one at OpenSea for about two weeks. That was the beginning of many other projects. Kanpai Pandas emerged. They used the NFT standard to create a wonderful season-like experience. Each season, they launch another 10,000 pandas on a different chain. You can then mint it on that chain. Once it's minted there, they can move between all of these without bridging.
That's the way it should be. There was that other world land sale that happened in 2021 or early 2022. $100,000 of gas was wasted. There was so much congestion that it was a disaster on Twitter. Even though the artwork was super cool and innovative by Hugo Labs, what if they had enabled users to mint on a fast and cheap chain like an L2 and at their time, maybe a day later, they could migrate it back over to Ethereum where there's liquidity and utility.
This is the accessibility and real agency that owners of nonfungible tokens should have. You can do whatever you'd like with your NFTs wherever you'd like. That ONFT standard is what Magic Eden has adopted for their launch pad. Any creator or gaming company that wants to create these can go into our docs and build, reach out to us, or work with the incredible go-to-market team that is Magic Eden as the defacto on the chain standard.
That is solving so many immediate challenges. In the bull cycle that was ‘21 to ‘22, the amount of money I spent on gas because it was the only option was absurd. A lot of people also felt that pain. There are a lot of people in ecosystems who wanted to participate but couldn't because they couldn't justify spending more on gas than the NFT itself. By putting in these different protocols, you can use ONFT to have it not only move cross-chain but also be more cost-effective and have a team that can support your whole launch by being able to work with the Magic Eden.
That's a synergistic partnership. That's a great way to see different teams working together and collaborating to make end experiences that much greater and a trend that we're going to continue to see in the space. The more that you can work and a synergistic way with other companies building cool stuff, the more awesome things.
That also goes to the whole point of LayerZero. You want to be able to be interoperable with any chain and any product that wants to work with you. That's something cool that someone can go and use but I'm sure there are other things on the roadmap that you probably have coming. Can you speak to a couple of those? You brought up gaming and that your team does some gaming stuff. I believe you all are doing some gaming things. Can you tell us a little bit more about that?
LayerZero, as a protocol, is generalizable. Any team that is building anything on a chain will need a LayerZero to abstract with that complexity and also leverage different chains like leveraging different programming languages. This is me nerding out a little bit as an engineer but where we were several years ago was you pick a chain and build a project based on that chain. It's a Polygon-based game. It's a Solana-based NFT project but that immediately alienates a population of multiple billions of people who don't have the time and energy or shouldn't feel compelled to know the esoteric nature of each of these chains.
For us, the early movers and the ones who are energized by the technology, like the researchers in the early ‘90s building the internet, that makes sense. We want to build things that people love, that make their lives better, that bring joy to them, and it should be simple. The kinds of teams that are using our DeFi protocols are massive gaming studios and indie games, NFT collections, artists, Tradify, enterprises like banks, and governments. Layer Zero was built to be modular. It fits any use case and is customizable in that way.
What's exciting to me on the gaming front, particularly if you go to Asia, is gaming is the way that people are introduced to anything on the chain. The culture in South Korea and Japan around gaming is like our culture in the United States around watching the NBA and NFL. It's very ingrained in what brings people together and what brings people joy. I'm thrilled to see some massive gaming corporations, the ones that created the games that you and I probably played growing up, the ones that created Pokemon, Zelda, and Club Penguin.
We’re experimenting with things on the chain. The Omnichain NFT is the standard that's being used across all of them, as well as layers your messaging to do things like the user accomplishes a task on this chain and that triggers a mutation of an NFT somewhere else. You win a fight with a boss in this chapter of your game and immediately, your Twitter PFP, which is an NFT from this game, has a crown. You can do that with LayerZero. It's generative creatively.
On the general roadmap side, specific to NFTs, one of my colleagues and I are representing LayerZero in the 6551 working group. We are deep in it with Tokenbound and the Polygon team. What we're building to enable 6551 cross-chain will be used by some well-known, at least within our space, decentralized social products and games. We're beginning to share this with the studios that have been integrating our protocol.
Our launch on Zuora, which was around ECC, was something I'm excited about. They're a world-class team. They are the tastemakers. I'm seeing Tien, their CTO. We'll be talking about how we can recycle some of the fees that we didn't even know we were going to generate through an open mint that we did with them to celebrate our launch there and our partnership. We recycle that back into the ecosystem and let builders and creators use it.
We're super blessed to be backed by funds like Christie's. It is a well-known auction house. OpenSea is one of our investors. Gaming studios like Com2uS and the massive conglomerate Animoca Brands are one of our massive backers. They're all doing things that are innovative in the NFT space and consumer at large. Even though LayerZero is best known for being integrated by DeFi protocols, games, and enterprise, NFTs are certainly one of my passions as an artist and a writer. I'm keen to get this all out and hear your guys' feedback.
That is quite the lineup of amazing things on the way and also a testament to the hard work that you guys are doing and the integrations that people see that can be realized. When you talk about trying to do these types of integrations and making these things happen because of the technical debt and time that it typically takes to do these things, it makes people wary of wanting to move forward and do them. You all are making it so seamless that people are excited to go and make these kinds of things happen. More opportunities are coming your way. That's incredible.
I'm excited to test a lot of that out. I hope that everyone who's reading makes sure to spend some time, check out LayerZero, and have some other things. We'll make sure to get some of that information on where they can go do that. Before we wrap, we also want to talk a little bit about a couple of hot topics where we like to talk about the latest things that are happening out in the world of Web3 and NFTs.
Since you are such a big NFT person yourself, the topic I do want to bring up and talk about a little bit is Cristiano Ronaldo. Binance launched the CR7 ForeverZone collection, which offered fans exclusive NFTs and experiences to share Ronaldo's legacy. The CR7 ForeverZone is giving the world an innovative and unique experience to engage and interact with one of the greatest players of all time, Cristiano Ronaldo.
They're building on the success of the first two NFT collaborations, where they did a couple of limited-edition mystery boxes and a few other things. Cristiano said that he's always felt incredible energy and support from the fans and wanted to engage and share with them in ways that bring them closer together. This is a cool collaboration with one of the best footballers out there. A lot of people in the world love him.
It's cool to find sports athletes and all these other types of musicians and artists to be able to see it as a collector's item, the same way you have a trading card or a unique experience with one of these people. This is a cool type of collaboration but when you hear stuff like this, what immediately comes to your mind about this and potentially other ways that more of these types of collaborations can happen?
I love that collaboration. I didn't know about it. I'm a big Ronaldo fan. I grew up training seriously as an athlete. When I see athletes want to engage with Web3 and do something experimental, it's exciting. Two immediate things come to mind. The first one is something I talk about a lot with my peers at JDC, which is the largest gaming developer conference. It's usually in the spring in San Francisco, which means that when you bring it on a chain, you inherently introduce a lot of friction because of the nature of blockchain technology.
What you have to offer to the end users when you're building a consumer product that's on a chain is something that is 10X more novel and 10X more useful because you're already introducing 10X friction. Ideally, it's even more than 10X. Rather than trying to retrofit Web3 products into what works in Web2, I want to see people experiment with something that is net new. There will be failures for sure. We see some of those with consumer products that are so out of left field and get a lot of hate on Twitter. I love that. I celebrate that.
Try things that are different than any other way we engage with a product that isn't on the chain and creates the story around it. Fandoms are a great place to begin experimenting with that. The project that comes to mind is one that we're working with called Story Protocol. They announced their fundraising. Their round was led by a16z, who's one of our lead investors. They're creating a platform that enables people to contribute to fanfiction, or this is one use case, like how you contribute to a code base via GitHub with pull requests.
If you think about open source code, which is how things like our ERC 721 and 1155 standards were created, those people who asynchronously came in saw a repo and made changes to it. They added comments and lines of code. The admins of that repo would accept or reject it. What comes out of it is the collective genius and the collective tension around ideas.
How can you reward people for contributing to stories? There are some mainstream movies that were fan fiction. Fifty Shades of Grey and Twilight were fan fiction. You can do that on the chain so you can track that contribution and reward it. Users can contribute from whichever chain they'd like. This is the vision for story protocol and I'm so excited about that.
When I was a kid, I got a lot of my creative expression from running around barefoot outdoors, writing stories, and creating newsletters. This is when I was 8 and 9 years old. Nowadays, kids are on iPads all the time. I would love to see a future in which they're contributing to creating fiction or artwork together and being able to see and track their contributions. Story protocols wanted to watch for sure.
Another takeaway from this particular hot topic is that you still see people building out the NFT marketplace. A lot of people like to say, “NFT is dead.” Are people going to keep going in this direction? The answer is yes. It's here. It's not going anywhere. People see the long-term play and value that these offer.
Many people and companies that came in tried to get the quick buck and tried to come and ride a wave of interest without building for what the future impacts look like. When you have people like Cristiano Ronaldo and some of these other larger players in the game coming in and making these types of collaborations, it is because they see something that's going to be long-term valuable.
There's a lot of value in this space. People are going to keep finding ways to interact and be a part of it. Even with what you're doing over at LayerZero and Story, where others can participate and start to do these things and have a longer play with being involved with the content that they're making, that's awesome and a cool way to continue to be in this space.
Irene, you've done a lot of great information that you've shared with us. I'm excited to go check out more of the ONFTs and even look at what you did with the Gas Station and other stuff but where can people go and learn more about LayerZero and all the other cool things that are yet to come that you also share with us?
The best place for updates on what we're launching and the teams that we're working with is our Twitter. It's @LayerZero_Labs. LayerZero.network is our website. You can reach our docs from there. You can also directly contact our team if you have an idea and you want to jam on it. I'm always accessible. You can DM me on Twitter, @IreneWu27. I love hopping on calls and jamming on ideas. That's the start of a new product that we launched together.
Everyone reading, make sure you go check that out. Irene, thank you so much for your time. We've reached the outer limit of the show. Thanks for exploring with us. We've got space for more adventures on the starship. Invite your friends and recruit some cool strangers that will make this journey all the much better.
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