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What Are Omnichain NFTs?

Omnichain NFTs seem to be the latest buzzword in the Web3 world. Everything started when LayerZero Labs, which is a Canada-based company, developed LayerZero, an interoperability protocol. In general, LayerZero creates the backbone of omnichain NFTs. Thus, you first have to understand what LayerZero is all about to better understand all that Omnichain NFTs involve.

LayerZero Protocol

Simply put, LayerZero is an omnichain interoperability protocol that supports decentralized applications (dApps) to build across many blockchains in “a trustless, efficient manner”. In other words, it is designed to serve as a transport layer using which smart contracts can communicate across multiple blockchains.

Omnichain NFTs

In the last several years, the thriving crypto ecosystem has resulted in the development of multiple blockchain applications like gaming, NFT marketplaces, and much more. Nonetheless, there is a severe lack of infrastructure to support cross-chain operability. As a result, ‘users, data, and liquidity’ are spread across applications that are powered by different blockchains.

That is where LayerZero comes into the picture. It resolves this issue via its omnichain interoperability protocol that brings together dApps across many blockchains. LayerZero smoothly connects many blockchains.

CTO and co-founder, LayerZero Labs, Ryan Zarick, said:

“LayerZero unlocks a future of blockchains without borders. Users will interact with omnichain dApps that exist on multiple blockchains. These dApps will seamlessly communicate over LayerZero without the user even realizing it.”

In March, LayerZero Labs raised $135 million from Andreessen Horowitz, FTX Ventures, Sequoia Capital, and others. With that, the company said that it would accelerate its development of the cross-chain dApps that are powered by LayerZero.

Ali Yahya, general partner at Andreessen Horowitz, commented:

“By unlocking cross-chain composability, LayerZero is enabling developers to build decentralized applications that simply weren’t possible before.”

As of now, this protocol supports all the blockchains that utilize the Ethereum Virtual Machine (EVM). These include Polygon, Avalanche, Optimism, Binance, Ethereum, Fantom, and Arbitrum. In the future, the team said that it would add support for non-EVM chains like Cosmos, Terra, Hub, and many others.

Understanding Omnichain NFTs

Ever since the LayerZero protocol was launched, the bigger NFT community appears to have been quite excited about the prospects that it brings into the NFT ecosystem. Fundamentally, nonfungible tokens can now become omnichain and enjoy their wider capabilities thanks to LayerZero.

For instance, omnichain NFTs can have some traits that are activated subject to the chain that powers them. It can also have certain utilities only when it is on a specific chain. On the other hand, you can readily avoid paying some exorbitant gas fees to acquire an Ethereum-based NFT by just selecting the same NFT on another network. The possibilities are quite unlimited.

Omnichain NFTs

For those reasons, the nonfungible token projects are currently exploring omnichain interoperability. Earlier last month, Gh0stly Gh0sts made history after they became the first omnichain NFT collection in the world.

The carefully dropped collection of 7,710, free-to-mint NFTs were rapidly picked up in the market. By the end of April, the project’s floor is at 0.41 ETH and has generated $16.4 million in trading volume on OpenSea.

Just to be sure, the developers say that this is just the beginning of bigger things to come. Gh0stly Gh0sts rightly stated:

“Omnichain NFTs are the future”.

With that in mind, omnichain NFTs and their operations are not limited to LayerZero. Some previous protocols like UMA’s Optimistic Oracle offer the same capabilities.

In the coming months, we can expect more developments in the omnichain space. Also, more projects are expected to hop on the bandwagon to reap the benefits that omnichain has on offer.

John Wanguba

Excited by blockchain, NFTs, crypto, metaverse, and every other related technology. Always delivers the latest and most trend news, descriptions, opinions, analysis, and features.

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