Flare recently announced it has been integrated by LayerZero V2, a cross-chain general messaging protocol that connects Flare to 75 chains and the 50,000+ decentralized applications (dapps) built on them. This opens the door for builders to create a wide array of different tools and services on Flare.
To help demonstrate the potential of this integration, here are just a few of the many use cases made possible by LayerZero V2 on Flare:
1. Omnichain Fungible Token (OFT)
LayerZero’s omnichain fungible token standard (OFT) enables tokens to be used seamlessly across multiple blockchains. This new integration can now set the stage for creating a blossoming DeFi ecosystem on Flare – one that is dynamic and interoperable, enabling network participants to transfer and use their tokens across various blockchains without time-consuming or complex bridging processes. The cross-chain functionality that would come with the integration can also significantly increase the number of liquidity sources and utility for dapp builders on Flare.
2. Cross-Chain Money Markets
Cross-chain money markets are another use case that, once built, would help lay the groundwork for a bustling DeFi landscape on Flare. In this scenario, Flare users could deposit major assets and borrow supported assets from other chains. This would create a more interconnected and liquid financial ecosystem, which in turn could pave the way for yield farming, arbitrage opportunities, and a broader range of financial instruments overall. Access to more types of financial instruments and markets allows for better risk management for DeFi users.
3. Universal Nameservices
Digital identities are becoming more important in the Web3 space (think ENS). With LayerZero, universal nameservices can become a reality on Flare, allowing users to bundle multiple wallets under a single name and simplify the management of digital identities and assets. This could be done on any chain, offering a streamlined experience for users as they interact with applications across different chains. User experience with universal nameservices would be improved by reducing the complexity associated with handling multiple addresses and wallets.
4. Multichain Governance
Multichain governance through LayerZero enables a contract on one blockchain to govern assets and permissions on multiple chains. For instance, this could mean more efficient and cohesive governance models for Flare dapps and protocols that operate across different blockchains. It could also lead to more inclusive decision-making processes and better-coordinated efforts in protocol upgrades, treasury management, and community activations.
5. Cross-Chain Gaming
Cross-chain gaming supported by LayerZero can empower players and creators on Flare to take their assets and experiences across different blockchains. For a gamer, this could mean being able to transfer in-game assets (characters, items, currencies) to their preferred chains, thus bolstering the flexibility and interoperability of gaming ecosystems. In turn, this would mean collaborative and expansive gaming experiences, where players can enjoy their favorite games without being confined to a single blockchain.
6. Cross-Chain Swaps
Cross-chain swaps via LayerZero enable seamless asset transfers between different blockchain networks. By leveraging LayerZero’s omnichain communication protocol, users can swap tokens directly from one blockchain to another in a secure and efficient manner.
7. Native Asset Bridging
Native asset bridging via Stargate and LayerZero allows for the direct transfer of assets between different blockchain networks without wrapping or creating synthetic versions. Utilizing LayerZero’s communication protocol and Stargate’s liquidity transport layer, this method ensures that native assets retain their original properties and security throughout the transfer process.