ColorTrace is LayerZero’s answer to issues with Coloured Cash, together with the quantity of storage required to paint digital property.
Cross-chain communication protocol LayerZero has launched ColorTrace, a worth attribution answer that facilitates honest monitoring. The answer simply attributes tokens to the entity that minted the token, permitting for simple verification of the token’s origin and making associated yield assortment seamless. Along with income distribution, ColorTrace may also assist with monitoring in alliance applications, referral hyperlinks, and different real-world makes use of.
Coloured Cash is a technique of making distinctions amongst a gaggle of digital property by attributing colours to particular cash. Though every coloured coin nonetheless capabilities the identical approach and is as usable or redeemable as non-colored cash, the cash carry markings that point out particulars of their historical past, together with former holders and authentic minters.
ColorTrace solves a main downside with the unique Coloured Coin algorithm. This algorithm used a lossless layer of metadata operate atop the Bitcoin ledger. That is equal to a repeatedly rising ledger listing of each handle that has ever coloured a token. This listing is actually infinitely sized, growing with each coloring completed on the community. Unsurprisingly, this answer shouldn’t be sustainable due to the storage and computation calls for required to take care of the listing. This additionally makes correct onchain worth attribution tough.
LayerZero’s ColorTrace Options for Coloured Cash
The ColorTrace answer from LayerZero supplies just a few options that simplify the issue of figuring out tokens and indicating provenance. Firstly, it promotes single-chain coloring, which atomically burns and mints tokens to make sure that a pockets solely holds tokens of a single shade. One other elegant answer is the switch of coloured tokens between blockchains. ColorTrace facilitates protected token transfers throughout networks, guaranteeing that there isn’t any mixup through the switch course of. The ColorTrace design additionally promotes effectivity, making it straightforward to establish a coloured token with out combing via a sophisticated monitoring system. Moreover, it ensures that the overall quantity and worth of tokens stay constant throughout all networks and transactions.
ColorTrace already capabilities as an answer that ensures equitable value-sharing of USDV, a brand new community-driven stablecoin launched by the Verified USD Basis. By ColorTrace, USDV facilitates clear reward distribution amongst verified minters. This manner, the probability of disputes arising from stated distribution is eradicated.
LayerZero wstETH Cross-Chain Transfers
Final month, LayerZero introduced a brand new characteristic that enables customers to switch wrapped staked Ethereum (wstETH) throughout a number of blockchains. Now out there on the Ethereum, BNB Chain, Scroll, and Avalanche chains, wstETH transfers are set to extend accessibility of staked tokens. This opens up wstETH for extra distinctive alternatives on different blockchains and improves decentralized finance (DeFi).
wstETH is a wrapped token representing staked Ethereum (stETH) within the Lido Finance protocol. Customers on Lido stake ETH and obtain stETH in return, which represents the worth of the property staked.
In April, LayerZero Labs raised $120 million in a Sequence B funding spherical at a $3 billion valuation. This tripled the corporate’s valuation from the $1 billion valuation in March 2022 when it raised $135 million in a Sequence A extension spherical.
