Bryan Pellegrino: Xero’s integrated blockchain system eliminates layering, misconceptions about second-layer security, and the game-changing potential of zk technology

Important takeaways

• Xero operates as a unified blockchain system, eliminating the need for separate entities managing different layers.
• LayerZero Labs has delved deeper into more diverse virtual machines and architectures than any other group.
• The two categories do not achieve layer security, contrary to industry belief.
• The future of blockchain technology involves a unified system that ensures trustless social communication.
• Chains prioritize goods over the infrastructure that connects them, shifting the focus to service providers.
• The introduction of Layer Zero technology is expected to significantly improve the road of the blockchain industry.
• Centralization in blockchain expansion is against the principle of decentralization.
• Zk technology eliminates duplication, improving blockchain efficiency by reducing unnecessary verification work.
• LayerZero Labs achieved a result of 2,000,000 operations per second, setting a new benchmark for blockchain performance.
• zk’s current technology is more focused on solving Ethereum’s scaling problems than achieving a high result.
• Ethereum aims to achieve 10,000 transactions per second by 2035, indicating a long-term plan for scalability.
• Separating execution and verification is critical to the development of blockchain technology.
• The inefficiency of the blockchain comes from all the nodes needing to download every transaction and do the same calculations.
• Zero-knowledge proof works primarily as a way to compress data in blockchain systems.
• The heterogeneous architecture allows larger nodes to handle the heavy lifting, allowing for millions of operations per second.

Guest introduction

Bryan Pellegrino is the founder and CEO of LayerZero Labs, a collaborative protocol that enables seamless communication and asset transfers across blockchains. He previously founded OpenToken, a platform that allowed users to launch their own tokens. With LayerZero, he pioneered a messaging layer that has processed billions in volume and achieved Zero-like success with 100x blockchain performance benefits.

The importance of an integrated blockchain system

• Xero operates as an integrated blockchain system without separate entities managing the different layers. “The biggest thing that’s opened up with Xero is that everything is part of the same system.” – Bryan Pellegrino
• This approach contrasts with traditional blockchain architectures with multiple layers, offering an integrated solution.
• The integrated system ensures that all components are managed by the same chain, improving safety and efficiency.
• “No separate entity is deploying the second layer or owning any part of the stack.” – Bryan Pellegrino
• This structure reduces the complexity and potential vulnerability associated with multi-layered systems.
• The unified approach is expected to reshape social interaction and trust mechanisms in blockchain technology.
• “The fundamental change must own all these things; it must be a one percent system.” – Bryan Pellegrino
• This innovation positions Xero as a unique player in the blockchain market, providing a distinct competitive advantage.

Expert in physical devices and structures

• LayerZero Labs has tested various virtual machines and architectures more deeply than any other group.
• “I don’t know of any other team in the world that has gone into all the VM and different architectures like we have.” – Bryan Pellegrino
• This depth of knowledge sets LayerZero Labs apart from the competitive blockchain space.
• Their expertise allows them to navigate complex blockchain environments efficiently.
• This comprehensive understanding is essential for developing new blockchain solutions.
• The organization’s unique position highlights its leadership in the development of blockchain technology.
• This technology is expected to drive innovation and development in the blockchain space.
• “We’ve been building privacy for five years.” – Bryan Pellegrino

Misconceptions about second layer security

• There is a common misconception that two layers inherit layer security.
• “He was complaining like every day about the state of the world and Ethereum basically saying that the second layer is gaining the security of the first layer.” – Bryan Pellegrino
• This belief is completely wrong, since the double layer does not automatically inherit the security of the person.
• Understanding first-layer security models and second-layer architectures is essential for accurate risk assessment.
• This misconception can lead to overestimating the security of second layer solutions.
• Addressing this misunderstanding is critical to making informed decisions in blockchain investments.
• “That’s just as untrue.” – Bryan Pellegrino
• This insight provides an important perspective on the security assumptions of the blockchain community.

Strategic shifts in blockchain focus

• Chains prioritize goods over relationships with service providers.
• “They want goods so we build and make the best of goods.” – Bryan Pellegrino
• This shift in focus reflects a deeper understanding of customer needs in the blockchain ecosystem.
• The decision to go around introducing their own first layer is driven by this idea.
• Understanding the dynamics between blockchain networks and the assets they support is important.
• This strategic shift is critical to navigating the competitive blockchain landscape.
• “What you want are chains, they want goods.” – Bryan Pellegrino
• This approach emphasizes the importance of assets over the chains themselves in the blockchain ecosystem.

Advances in zk technology

• Zk technology eliminates duplication, enabling a more efficient blockchain by reducing unnecessary verification work.
• “We also saw what was special about zk, which was the elimination of replication.” – Bryan Pellegrino
• This development improves the stability and performance of the blockchain.
• Elimination of duplication reduces the need for multiple verifiers to perform the same task.
• This efficiency is an important technical advantage of zk technology on the blockchain.
• “That’s the expensive part of blockchain.” – Bryan Pellegrino
• This innovation places zk’s technology as a key component in developing blockchain systems.
• Understanding zk technology and its role in blockchain efficiency is important for stakeholders.

Top achievements

• LayerZero Labs achieved a result of 2,000,000 transactions per second.
• “We just finished that; we’re like 2,000,000 TPS.” – Bryan Pellegrino
• This sets a new benchmark for blockchain performance, which represents a significant improvement.
• Achieving high transaction performance is critical to blockchain scalability.
• This achievement demonstrates LayerZero Labs’ leadership in blockchain technology.
• Understanding current blockchain performance metrics highlights the importance of this achievement.
• This breakthrough is expected to drive innovation in blockchain systems.
• “That’s a new sign.” – Bryan Pellegrino

The future of blockchain scalability

• zk’s current technology is more focused on solving Ethereum’s scaling problems than achieving a high result.
• “They’re actually trying to solve Ethereum’s problems, like 15 TPS.” – Bryan Pellegrino
• Ethereum aims to achieve 10,000 transactions per second by 2035.
• “By 2035 they hope to be buying 10,000 things per second.” – Bryan Pellegrino
• Separating execution and verification is critical to the development of blockchain technology.
• “There are always crypto exchanges.” – Bryan Pellegrino
• Understanding the scalability trilemma is critical to evaluating blockchain architecture.
• These details highlight ongoing efforts to improve blockchain stability and efficiency.

The role of passive evidence

• Zero-knowledge proof works primarily as a way to compress data in blockchain systems.
• “Zk is perfect just that zk is mostly compression.” – Bryan Pellegrino
• This improvement improves efficiency by reducing the amount of data that needs to be processed.
• Proof that Zero-knowledge is an important technical development in blockchain technology.
• Understanding their application is important for stakeholders in the blockchain space.
• This insight highlights the power of anecdotal evidence to improve blockchain systems.
• “That’s like a huge opening.” – Bryan Pellegrino
• This technology is expected to play an important role in the future of blockchain development.

Institutional perspectives on blockchain

• Institutional feedback shows that blockchain technology is now meeting its scaling and exit requirements.
• “The responses from many institutions we didn’t think this could happen and now it has.” – Bryan Pellegrino
• This development is an important opening of institutions, facilitating wider adoption.
• Understanding institutional perspectives on the proliferation of blockchain is important for industry stakeholders.
• This insight highlights the growing alignment between blockchain technology and institutional needs.
• This consensus is expected to drive further integration of blockchain solutions into traditional finance.
• “That’s a big opening for them.” – Bryan Pellegrino
• These events emphasize the importance of meeting the institutional requirements for blockchain adoption.

The impact of AI on engineering

• AI can greatly improve developer productivity, but it requires careful consideration and iteration.
• “You can make AI do everything for you and it will just create garbage.” – Bryan Pellegrino
• AI has the potential to increase the level of engineering skills within an organization.
• “Every developer will be better.” – Bryan Pellegrino
• Experienced developers need to adapt to using AI rather than relying solely on their experience.
• “Things are not going anywhere.” – Bryan Pellegrino
• Understanding the role of AI in engineering is critical to maximizing its benefits.
• This insight highlights the need for human involvement in AI systems, emphasizing quality control.