LayerZero Brings Multichain Support to BDACS' KRW1, Easing Liquidity Fragmentation With OFT Standard
TECHWORLD ·
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LayerZero said it will apply the OFT standard to KRW1, the won stablecoin issued by BDACS.
As a result, KRW1 has become eligible for multichain support and marks the first multichain expansion of a stablecoin that has deposited all of its won reserves at domestic commercial banks.
LayerZero said the move eases liquidity fragmentation under the conventional wrapped token approach and makes it possible to expand liquidity on each blockchain.
LayerZero said in an announcement on the 8th that it will apply its OFT (Omnichain Fungible Token) standard to KRW1, the won-pegged stablecoin issued by BDACS. As a result, KRW1 has become eligible for multichain support. This marks the first multichain expansion of a stablecoin that has deposited all of its won reserves at domestic commercial banks.
Under the conventional wrapped token approach, separate wrapped tokens had to be issued for each bridge. This led to liquidity fragmentation. By contrast, LayerZero said applying the OFT standard can ease liquidity fragmentation and also make it possible to expand liquidity on each blockchain.
Lim Jong-kyu, LayerZero's head of Asia, said multichain support is becoming a basic requirement in the stablecoin market. He said the ability to circulate stably across multiple blockchains is becoming increasingly important. He also described the case of applying OFT to KRW1 as one that laid the groundwork for the circulation of won-based assets.
OFT is LayerZero's token standard. Its design goal is to allow a single digital asset to be used as the same asset across multiple blockchains. Cross-chain asset transfers are carried out by burning or locking the amount on the source network, while the same amount is minted or unlocked on the destination network. This structure makes it possible to manage total circulating supply consistently.
One example of this standard is KRW1, the won stablecoin issued by BDACS. KRW1's reserves are composed of won equivalent to 100% of its issuance and are deposited at domestic commercial banks. To ensure transparency, BDACS discloses the status of its reserves and undergoes regular independent audits.
The actual cross-chain transfer tool for KRW1 is Stargate, a transfer application based on LayerZero. Users can transfer KRW1 between supported networks through Stargate.
LayerZero is setting its sights on expanding its business from infrastructure that supports asset movement and circulation to financial market infrastructure. To that end, LayerZero has unveiled Zero, a high-performance blockchain, and ATLAS, exchange infrastructure that integrates trade matching, clearing, settlement, and risk management. ATLAS has functions that integrate trade matching, clearing, settlement, and risk management. LayerZero is pushing a strategy to build a foundation for global market trading and settlement beyond cross-chain movement.
Source: TECHWORLD · Kim Hye-jin
Original: https://www.epnc.co.kr/news/articleView.html?idxno=406688
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Source: TECHWORLD
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