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LayerZero's unauthorized deployment of wstETH cross-chain stirs controversy, nine major protocols call for the establishment of an open-source cross-chain standard

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LayerZero

LayerZero's unauthorized deployment of the wstETH cross-chain standard has sparked controversy. Hart Lambur accused LayerZero of malicious behavior and hypocrisy, claiming that LayerZero uses the Google Oracle while promoting itself as "decentralized." Nine cross-chain protocols have also issued an open letter, urging the establishment of open-source cross-chain standards.

LayerZero Deploys wstETH

LayerZero announced on October 26th that it has integrated Lido Finance's product wstETH with the full-chain homogenous token standard OFT, enabling seamless transfer on the following public chains through its cross-chain protocol Stargate:

  • Ethereum

  • Scroll

  • Avalanche

  • BNB Chain

Cross-chain rising star Stargate solves the "impossible triangle of cross-chain," stablecoin mining benefits >15%

However, as a product led by Lido Finance, LayerZero's move has not received approval from anyone, sparking criticism from various protocols.

Lido Warning: Cross-chain Bridge Deployed by LayerZero Without Lido DAO's Permission, Audit

Lido Finance tweeted, stating that LayerZero's cross-chain bridge is not a standard cross-chain bridge and urging users to be extra cautious if they choose to interact with it.

LayerZero has emphasized in a governance proposal that it will transfer the contract ownership of wstETH to DAO upon receiving support from Lido DAO, but this proposal was published on the same day as LayerZero's announcement of launching wstETH cross-chain.

Co-founder of UMA Protocol: LayerZero Has Been Messing Around

Hart Lambur accused LayerZero of a long-standing pattern of malicious behavior in a tweet. He mentioned several allegations:

  1. Pretending to be decentralized: LayerZero clearly uses a Google oracle but continues to promote itself as "decentralized."

  2. LayerZero CEO Bryan Pellegrino refused to discuss oracle issues with Hart Lambur on a podcast.

  3. Deploying an unauthorized wstETH cross-chain bridge and marketing it as an official deployment of Lido.

Hart Lambur stated:

We can look the other way, or we can hold each other to a higher standard of decentralization. I choose the latter. Bryan Pellegrino, let's chat on a podcast about LayerZero's recent decisions.

Bankless replied expressing willingness to host this podcast.

Nine Protocols Issue Open Letter: Call for Establishing Open Source Cross-Chain Standards

Nine cross-chain protocols drafted an open letter expressing concerns over LayerZero's recent actions and making four main points:

  1. Cross-chain service providers forcibly lock specific cross-chain assets under their own token standards, which is not a cross-chain standard.

  2. This may lead to systemic risks, especially as cross-chain bridges have suffered over $2 billion in hacks in the past two years.

  3. Token issuers should have autonomy over their tokens and be the ultimate arbitrators of the asset standard specifications.

  4. Open standards should be developed to encourage competition, such as EIP-7281.

The protocols issuing the open letter include:

  1. LI.FI

  2. Socket

  3. Sygma

  4. ChainSafe

  5. Celer Network

  6. Across Protocol

  7. Router Protocol

  8. Connext Network

  9. Cross-chain Interoperability Alliance