Buy Crypto- Markets
Futures- Spot
- Copy Trade
- Earn
- More
A Day Gathering Wall Street's Old Money: LayerZero's "Mainnet Transition" Narrative
Original Title: "LayerZero Convenes Wall Street Old Money in One Day, as the Cross-Chain Leader Begins to Tell the Story of 'Wall Street Public Chain'"
Original Source: Deep Tide TechFlow
On February 10, LayerZero launched Zero in New York.
This is a self-developed Layer 1 public chain aimed at supporting transactions and settlement in the institutional-grade financial market.
LayerZero refers to it as the "Decentralized Multicore World Computer." Let me translate that for you: a chain specifically designed for Wall Street.
At the same time, various Wall Street institutions have begun to openly support it, with some responding by making direct investments.
Among them, Citadel Securities strategically invested in the ZRO token.
This company handles approximately one-third of U.S. retail stock orders. CoinDesk, in its coverage of this event, specifically pointed out that direct purchase of crypto tokens is not a common practice for Citadel, a traditional Wall Street financial institution.
ARK Invest also acquired equity and tokens of LayerZero, with Cathie Wood directly joining the project's advisory board; Tether announced a strategic investment in LayerZero Labs on the same day, but the amount was not disclosed.
Beyond token purchases and equity investments, there is a quieter signal.
DTCC (the central clearinghouse for U.S. stock trades), ICE (parent company of NYSE), and Google Cloud have also signed a joint exploration agreement with LayerZero.
So, for a project transitioning from a cross-chain bridge, to simultaneously secure endorsements in clearing, trading platforms, market makers, asset management, stablecoins, and cloud computing along this industry chain is quite a collective endorsement.
Traditional institutions have added another move to their blockchain financial pipeline strategy.
After the news was announced, ZRO saw an intraday gain of over 20%, currently trading around $2.3.
No Longer a Bridge, but a Pipeline?
LayerZero's activities over the past three years have been straightforward:
Move a token from one chain to another. Its cross-chain protocol currently connects over 165 blockchains, with USDt0 (the cross-chain version of the Tether stablecoin) going live less than a year ago and handling over $700 billion in cross-chain transfers.
It's a mature business, but the ceiling is visible.
A cross-chain bridge is essentially a tool: whoever is cheaper and faster, users will use that. However, with the overall crypto market shrinking and transaction volumes decreasing, cross-chain is essentially a pseudo-demand, so it is understandable why LayerZero chose to change lanes.
Moreover, it has the capital to make the switch. a16z and Sequoia Capital have led the project, with total funding exceeding $3 billion and a previous valuation of $30 billion.
The investment portfolios of these two firms are essentially Wall Street's contact list. Citadel and DTCC are now willing to sit at the table to support LayerZero, perhaps because of the significant backing behind the scenes.
Returning to this new L1 released by LayerZero, Zero, it doesn't seem to be designed for DeFi players or meme traders.
Zero's architecture is different from existing public chains. Most chains have one road for all traffic, but Zero splits the chain into multiple independently running partitions, which LayerZero calls Zones.
Each Zone can be individually optimized for different use cases without interfering with each other.
At launch, three Zones were opened: a generic environment compatible with Ethereum smart contracts, a privacy payment system, and a dedicated trading matching environment.
These three Zones target three types of customers.
The generic EVM environment retains existing crypto developers with low migration costs. The privacy payment solution addresses an age-old issue for institutions: when trading on Ethereum, counterparties can see your position and strategy, leading to large funds not wanting to swim naked.
The dedicated trading Zone aims more directly at resolving matching and settlement post-securities tokenization.
Looking back at the guest list, it's easy to understand. DTCC clears trillions of dollars in securities transactions annually and wants to know if clearing can be faster. ICE operates the NYSE, which only trades on weekdays; it wants to try 24/7 trading. Citadel handles massive order flow, and every step faster in the post-trade process is money.
So taken together, these are not needs of the crypto industry, but rather Wall Street's own pain points.
CEO of LayerZero, Bryan Pellegrino, put it bluntly in a public interview:
"It's not that existing things are not good enough; it's that there are truly scenarios that need 2 million transactions per second, belonging to the future global economy."
By the way, this new chain called Zero claims to achieve 2 million TPS in a test environment, which can indeed meet the needs of traditional financial production-grade. But the performance narrative of public chains has long been played out; how high the performance is, in fact, the author finds it not surprising.
The story can remain the same, but the audience for the story can change, and this time it's the old money's turn.
Wall Street Wants to Move Trades onto Chain, but Ethereum Can't Keep Up
The institutional rush into LayerZero is not due to a crypto bull market, but rather Wall Street itself promoting tokenization.
BlackRock's BUIDL Fund issued on Ethereum last year, with a scale exceeding $5 billion. JPMorgan's Onyx platform runs on Ethereum technology and has already processed trillion-dollar scale repo transactions.
Wall Street used Ethereum for a proof of concept, demonstrating the feasibility of tokenization. The next step is to find a place that can handle production loads.
Zero's three Zones are targeting this gap. EVM compatibility means that assets and contracts on Ethereum can be migrated over.
Perhaps this is the real divide between LayerZero and Ethereum.
Currently, Ethereum is using standards like ERC-8004 to stake out its definition rights, providing on-chain identity for AI agents, and establishing rules for the future on-chain economy...
LayerZero's current move is to build pipelines regardless of definition, telling institutions that their transactions can run here.
One is writing a rulebook, and the other is laying pipes. They are betting on different things.
Ethereum is betting on its irreplaceability as a trust layer, with TVL scale, security audit ecosystem, and institutional recognition as the foundation. LayerZero is betting on the substitution demand at the execution layer: Wall Street needs speed, privacy, and throughput, and whoever provides them first will be used.
Whether the two paths will eventually cross is unclear at this point. But the flow of capital has already provided a directional signal.
What Does $ZRO Mean?
The previous positioning of ZRO was simple: the governance token of the LayerZero cross-chain protocol. With a total supply of 1 billion, it was used for voting and staking, and that's about it.
After the release of Zero, the story of this token changed.
ZRO is the native token of the Zero chain, anchoring network governance and security. If Zero indeed becomes institutional-grade financial infrastructure, the valuation logic of ZRO will no longer be based on "how much transaction volume is on the cross-chain bridge" but rather on "how many assets are running on this chain."
There are two valuation anchors, as you all understand, with the ceiling differing by several orders of magnitude. But while the narrative is one thing, several hard variables will determine the future trend of ZRO.
Supply Side: Eighty percent of the tokens are still locked.
Currently, the circulating supply of ZRO is approximately 200 million tokens, accounting for just over 20% of the total supply. According to CoinGecko data, around 25.71 million ZRO will be unlocked on February 20, worth about $50 million, representing 2.6% of the total supply, and will be distributed to core contributors and strategic partners. The entire unlocking period will extend until 2027.
This unlocking on February 20 is the first supply shock after the release, and whether the market can absorb it will be a litmus test of short-term sentiment.
Demand Side: The fee switch has not been turned on yet.
Currently, ZRO does not have a direct value capture mechanism. In December of last year, there was a governance vote proposing a fee on each cross-chain message, with the income used for ZRO buyback and burn, but it did not pass due to insufficient voter turnout. The next vote is scheduled for June this year.
If passed, ZRO will have a burning mechanism similar to ETH, reducing the circulating supply with each transaction. If it fails again, the token's "governance right" will only be a voting right without cash flow support.
So overall, players interested in ZRO may want to keep an eye on three key points:
1. In June, the second vote on fees. Approval will directly determine whether ZRO has inherent demand.
2. In the fall of this year, the Zero mainnet launch.
3. It will not be until 2027 that the ZRO token is fully unlocked. Until then, each unlocking phase is seen as pressure, compounded by the current bear market in the crypto space, where positive news may not necessarily drive ZRO's price.
Lastly, LayerZero refers to Zero as the "decentralized multicore world computer," clearly a concept aiming to benchmark against Ethereum's world computer, seeking to play a more significant role in the settlement layer, especially in financial settlement, while transitioning away from and cutting across the thin narrative of cross-chain bridges.
However, the official statements from several partners are intriguing.
Citadel refers to its involvement as "evaluating how the architecture can support high-throughput workflows"; DTCC mentions "exploring scalability in tokenization and collateralization aspects."
In translation, it means we think this thing might be useful, but we haven't sealed the deal yet.
Wall Street money is smart, so smart that they will place many small bets at the same time to see which one takes off first. Therefore, when a project attracts various star institutions, it does not necessarily imply a full commitment but rather acts more as a short-term bullish catalyst.
What LayerZero has received may be a ticket to enter, or it may just be an interview opportunity.
You may also like
Found a "meme coin" that skyrocketed in just a few days. Any tips?
TAO is Elon Musk, who invested in OpenAI, and Subnet is Sam Altman
The era of "mass coin distribution" on public chains comes to an end
Soaring 50 times, with an FDV exceeding 10 billion USD, why RaveDAO?
1 billion DOTs were minted out of thin air, but the hacker only made 230,000 dollars
After the blockade of the Strait of Hormuz, when will the war end?
Before using Musk's "Western WeChat" X Chat, you need to understand these three questions
The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.
There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."
No. The difference lies in where the keys are stored.
In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.
X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.
This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.
The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.
The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.
After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."
From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.
In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.
As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."
Not continuous monitoring, but a clear access point.
For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.
This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.
There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."
X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.
In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.
WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.
X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.
These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.
This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.
X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.
Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.
The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.
X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.
The help page sentence has never been just technical instructions.
Parse Noise's newly launched Beta version, how to "on-chain" this heat?
Is Lobster a Thing of the Past? Unpacking the Hermes Agent Tools that Supercharge Your Throughput to 100x
Declare War on AI? The Doomsday Narrative Behind Ultraman's Residence in Flames
Crypto VCs Are Dead? The Market Extinction Cycle Has Begun
Claude's Journey to Foolishness in Diagrams: The Cost of Thriftiness, or How API Bill Increased 100-Fold
Edge Land Regress: A Rehash Around Maritime Power, Energy, and the Dollar
Arthur Hayes Latest Interview: How Should Retail Investors Navigate the Iran Conflict?
Just now, Sam Altman was attacked again, this time by gunfire
Straits Blockade, Stablecoin Recap | Rewire News Morning Edition
From High Expectations to Controversial Turnaround, Genius Airdrop Triggers Community Backlash
App