LayerZero DVN critique: Axelar DVN admin controlled by an EOA
Quote236 words
Summarizes an A1 Research finding that LayerZero's Axelar DVN has an admin controlled by an EOA able to censor traffic or transmit fraudulent transactions, plus scaling and gas costs of the pairwise DVN design. Notes LayerZero raised at over $3B.
Key claims
Axelar DVN admin is controlled by an EOA
Pairwise DVN design is hard to scale
DVN wrapper logic adds on-chain gas
So @axelarnetwork vs. @LayerZero_Labs is going into the next round it seems.
Learned a lot about L0 DVN recently and I think there are a few things around it people should be aware of. Don't forget we're talking a project that raised at a >$3B valuation.
Let me give you a TLDR:
✦ LayerZero is building a transportation layer that aims to remove dependencies on cross-chain messaging protocols like Axelar, Chainlink CCIP or Wormhole. They call this middle layer a Decentralized Validation Network (DVN).
✦ LayerZero’s Axelar DVN sets an admin, controlled by an EOA that has the ability to censor traffic and transmit fraudulent transactions.
✦ When a new chain connects to a a protocol that is wrapped in a DVN, users must wait for LayerZero to update.
✦ DVN’s pairwise design is hard to scale. As the number of connections grows, the DVN on each chain has to keep track of the DVNs on all other chains.
✦ Due to DVN’s wrapper logic, extra on-chain gas is used, making it more expensive for users.
There are also many good reasons why LayerZero's transport layer and DVN approach are a good idea. However, the first point in the above list is definitely significant as it might result in security vulnerabilities. @RedactedRes laid out the issues that come with this specific admin design in the post below.
Go check it out, definitely worth a read! 👀👇
QUOTING @a1research__
Hey @LayerZero_Labs, quick question: Why is your Axelar DVN controlled by an Externally Owned Account, that has the ability to censor traffic and transmit fraudulent transactions? After the recent X beef between @axelarnetwork and @LayerZero_Labs, we got curious about LayerZero
Hey @LayerZero_Labs, quick question: Why is your Axelar DVN controlled by an Externally Owned Account, that has the ability to censor traffic and transmit fraudulent transactions? After the recent X beef between @axelarnetwork and @LayerZero_Labs, we got curious about LayerZero
What came next · since 18 Mar 2024
Since then
Zero has written 4 more pieces on LayerZero since this one.
- LayerZero's Zero L1: institutional distribution, unproven executionOn LayerZero
- Interoperability wars: LayerZero vs Wormhole bids for StargateOn LayerZero
- Bridge volume breakdown: LayerZero leads with $7.42B over 30 daysOn LayerZero
- LayerZero follow-up: DVN admin can still bypass validationOn LayerZero