In an effort to enhance the security of cross-chain transactions, LayerZero Labs and Eigen Labs, the team behind the Ethereum re-staking protocol, have unveiled a new framework to improve decentralized communication across blockchains.
The partnership between the two companies was revealed on Wednesday, ushering in a new system called “CryptoEconomic Decentralized Verifier Networks (DVNs).”
According to the announcement blog post, the DVNs are built to mitigate the identified vulnerabilities of cross-chain messaging protocols (CCMPs), by enhancing how transactions and data can be securely verified across blockchains.
At the heart of the DVN system is a combination of technical verification mechanisms and financial incentives, which offers a novel solution for security.
Eigenlabs reveals that by using cryptoeconomics, DVNs add economic incentives to ensure that verifiers — the validators who relay and validate messages between chains— always act honestly.
How Does The DVN System Work?
Elaborating on how the DVNs operate: it is worth noting that it operates via four major functions such as “stake, verify, veto and slash.”
First of all, it allows for verifiers to lock up or stake assets as collateral. These assets can be in the form of Ethereum (ETH), other cryptocurrencies, or even native assets of the protocols, such as EIGEN or ZRO tokens.
Additionally, once the assets are staked, messages are transmitted and validated across multiple blockchains. In the case of any discrepancies or suspicious activity, tokenholders within the network can vote on whether to veto the staked assets of the verifier in question.
If confirmed that the verifier engaged in malicious activity, their staked assets are slashed. This model offers increased security for cross-chain messaging and helps align the behaviour of verifiers with the overall goals of the network.
Eigen Labs explains how this latest cross-chain security model could impact the blockchain industry, noting:
“As this Framework is adopted, the future of blockchain communication will be defined by trust, transparency, and accountability — bringing us closer to a world where every message across blockchains is secured by cryptoeconomics.”
What are The Advantages?
Asides the staking and economic incentives, another advantage of DVNs is their open-source framework, which enables any team to build and launch their own DVNs with customizable security parameters.
According to the announcement, this flexibility allows for the creation of application-specific DVNs, tailored to the needs of individual projects and allowing for a wide range of verification methods.
Additionally, by enabling other teams to launch their own DVNs, the system is expected to boost a more inclusive ecosystem where various networks can stake their assets and contribute to the security of cross-chain transactions.
