Arbitrum Orbit Adopts LayerZero’s OFT Standard And Supports OFT As Gas Token
In Brief
LayerZero Labs announced that its Omnichain Fungible Token Standard, co-developed with Offchain Labs, is now integrated into Arbitrum’s Orbit Chains.
Blockchain messaging protocol developer LayerZero Labs announced that its Omnichain Fungible Token (OFT) Standard, co-developed with Offchain Labs, is now integrated into Arbitrum’s Orbit Chains, a blockchain framework for the launch of Layer 2 and Layer 3 networks.
This enables OFTs to be fully compatible with Arbitrum Orbit chains, including the ability to use OFTs as native gas tokens. Such an achievement represents the first instance of a token standard from a third-party interoperability protocol being recognized as a native token on any rollup stack.
LayerZero Labs created a bridging framework that implements the OFT standard directly into the Arbitrum Orbit bridge contracts. This setup consolidates both bridges’ OFT tokens into a shared “lockbox” contract on the Arbitrum Layer 2 and the corresponding Orbit chain.
The integration specifically addresses the challenges of asset fragmentation and potential race conditions by providing unified liquidity and seamless bridging.
While both bridges continue to function independently, the shared lockboxes combine the liquidity of the OFT token, removing the necessity for two distinct bridged versions of the same asset. Additionally, seamless bridging mitigates race conditions by ensuring that the amount of locked OFT supply on Layer 2 consistently matches the amount of unlocked supply on the Orbit chain and vice versa.
The incorporation of LayerZero’s OFT standard with an Orbit chain’s shared “lockbox” contract enables users to send and receive OFTs between Arbitrum, Orbit Layer 2, and Layer 3 blockchains, as well as to over 90 other blockchains connected via LayerZero.
How Does OFT Bridging Work?
In order to facilitate OFT bridging, users are encouraged to transfer a specified amount of tokens from their wallet on the Arbitrum and lock them into the Arbitrum Layer 2 shared lockbox. Once this amount is locked, the OFT is invoked to send a message to unlock that amount on the Layer 3 blockchain. Subsequently, the LayerZero Endpoint transmits the message to the LayerZero Endpoint on Layer 3, where the AdapterOFT receives it and unlocks the specified amount of tokens from the supply of locked tokens on Layer 3.
As a leading Layer 2 blockchain, Arbitrum captures roughly 40% of the market share based on total value locked (TVL) compared to all other Layer 2 blockchains. Additionally, Arbitrum Orbit, the Layer 2 and Layer 3 ecosystem built on the Arbitrum Nitro technology stack, currently encompasses 50 blockchains, making it the largest collection among all blockchain technology stacks.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
