<Image source: Spider-Man: Across the Spider-Verse>

Table of Contents

1. Introduction

2. CCIP, Chainlink's Ambitious Project

3. Both CCIP and LayerZero Aim to Solve the Bridging Trilemma

4. CCIP and LayerZero Technologies: Similarities and Differences

5. CCIP’s Potential to Surpass LayerZero

6. Final Thoughts

 

 

1. Introduction

In the realm of numerous layer 1 and 2 blockchains, the issue of fragmented liquidity persists. For instance, consider multi-chain dApps like Uniswap and SushiSwap, where assets are confined within each respective blockchain. Transferring these assets seamlessly across chains remains a challenge. To draw a relatable analogy, it's akin to users needing to switch between different networks to use KakaoTalk and Naver due to the absence of the TCP/IP protocol on the internet.

Several cross-chain technologies have emerged to address the segregation of liquidity across various chains. Among these, bridge technology garnered substantial attention, yet also faced criticism for its inefficiency and centralization. Then starting in 2021, bridges encountered significant issues when popular lock-and-mint bridges fell victim to multiple hacks (see 2023 Crypto Outlook: Antifragile).

Swiftly stepping into the disrupted bridge ecosystem, LayerZero emerged as a robust solution. It solved the problems of existing inefficiencies bridges by combining ULNs (Ultra Light Nodes), Oracle, and the dual security of relayers. And although LayerZero currently only focuses solely on asset transfers, it's gearing up to make the leap to cross-chain messaging protocols in the future (See Xangle's "LayerZero Research").

In July of this year, at the EthCC event, Chainlink unveiled the CrossChain Interoperability Protocol (CCIP) testnet. This cross-chain solution, developed by Chainlink Labs in collaboration with SWIFT, the global organization of financial standard communications, is poised to stand as a formidable contender against LayerZero. In this article, we will first briefly introduce the technology behind CCIP, compare it with the technologies of LayerZero, and speculate on the trajectory of the standardization race.

2. CCIP, Chainlink's Ambitious Project

CCIP serves as a standardized protocol fostering communication amidst segregated blockchains. Sergey Nazarov, the founder of Chainlink, draws parallels between CCIP and the internet's TCP/IP. If TCP/IP orchestrated the standardization of the nascent, disjointed internet landscape, CCIP is poised to achieve a similar feat by unifying fragmented blockchains.