Is Layerzero's Zero the "Ethereum killer"?

Author: Blue Fox Notes

A few days ago, LayerZero announced the launch of a heterogeneous L1 chain called Zero, partnering with Wall Street giants such as Citadel Securities, DTCC, ICE, and others. Zero aims to achieve 2 million TPS and reduce transaction fees to one ten-thousandth of a cent. If it truly reaches these goals, it will surpass all current L1 blockchains.

Is Zero chain good or bad for Ethereum? Is it a new “Ethereum killer”?

First, the conclusion: Zero is not an Ethereum killer but an amplifier of its ecosystem. It addresses scalability issues without excluding ETH’s secure anchoring. In the long run, it could actually promote Ethereum’s evolution from a “single-core” to a “multi-core hub.”

Let’s explore from three perspectives:

1. Technical Perspective: Zero’s core technologies include QMDB (quantum storage / 100x write speed), FAFO (scheduling algorithm / parallel execution), and “infinite partition execution” (zones operate independently, reaching 2 million TPS). It is compatible with EVM, allowing developers to migrate high-load DApps without rewriting Solidity code.

However, a closer look at Zero’s white paper reveals it’s not an “independent kingdom.” It adopts a “compute-proof-verify” paradigm: execution occurs on Zero’s heterogeneous multi-core system, but ZK proofs (Jolt Pro zkVM, gigahertz-level speed) can bridge to Ethereum’s L1/L2 settlement layers, leveraging Ethereum’s decentralized security with over a million validators. This is similar to L2 rollup models but more flexible: no mandatory calldata submission, optional “hot-pluggable” bridging (LayerZero OFT standard, latency <100ms). When migrating DApps to Zero, typically 30-50% of high-load execution parts (like NFT minting) are transferred, while core governance and state synchronization can be anchored via OFT bridges to ETH, supporting hybrid deployment.

Why isn’t Zero an Ethereum killer? If Zero truly aimed to overthrow, it wouldn’t need EVM compatibility (for example, Solana uses Rust to build a self-contained chain). Instead, its design directly targets L2 pain points—read amplification and centralized sequencers. Recent tweets by Vitalik Buterin also mention that this “external interoperability” can strengthen ETH’s role as a “trust anchor” (though not specifically Zero, similar effects exist). Technologically, Zero can serve as an “external execution brain” for Ethereum rather than a replacement.

Therefore, at the technical level, Zero and Ethereum are heterogeneously complementary, not zero-sum competitors.

2. Value Capture Layer: This is a major concern for many ETH holders.

Zero’s DApp migration could cause short-term ETH value outflows—such as a 5-10% decrease in gas fees or a 2-3% shift in TVL (based on historical L2 simulations). However, its economic model attracts traffic through low fees, and via OFT bridges, a portion of cross-chain value can route back to ETH, indirectly benefiting Ethereum’s secure anchoring and burn mechanisms—especially in RWA DvP settlements, where routing rates could be even higher.

Zero’s gas fees are extremely affordable (<$0.0001 per transaction), optimized for high-frequency RWA settlements (like DTCC’s trillion-dollar clearing). The LayerZero protocol’s OFT standard allows cross-chain message and asset transfers that can be validated on ETH, incurring bridging fees of 0.2-0.5%.

RWA is a key leverage point: Zero’s partnership with Citadel and ICE targets tokenization of traditional finance assets, with DvP (delivery vs. payment) settlement relying on ETH’s security (accounting for over 60% of RWA TVL). BlackRock’s BUIDL fund has already been built on ETH; Zero extends its execution capabilities, with single transactions worth tens of thousands of dollars flowing back through full routing.

Imagine a scenario where Zero reaches 1 million TPS (a baseline assumption), generating $3 billion annually in bridging revenue. A significant portion of this value would be captured by ETH (likely more than twice the L2 calldata revenue). As the “monetary cornerstone,” ETH benefits from Metcalfe’s Law: more users across multiple chains increase overall value.

Counterintuitively, compared to L2s, Zero might actually enhance ETH’s value capture more effectively.

In summary, economically, Zero is not a “thief” but more like a “traffic pump”—after DApp migration, ETH could see increased compound returns rather than losses.

3. Ecosystem Layer: Ecosystem is the lifeblood of blockchain. Ethereum’s developer community accounts for about 70% (active on GitHub), and L2 ecosystems lock in 80% of DApps. If Zero were a “killer,” it would need to rebuild a new ecosystem from scratch. But in reality, its interoperability DNA transforms ETH from an “island” into a “hub.”

LayerZero has already connected over 150 chains (including Solana and BNB). After Zero’s launch, many DApps will choose “hybrid deployment” (Zero for execution + ETH for governance). Most developers see Zero as a “solution”—addressing L2 competition and pushing ETH toward Stage 2 decentralization.

By 2026, as the crypto industry enters the “RWA era,” Zero’s traditional finance entry points will attract non-crypto users, expanding Ethereum’s ecosystem and pushing it toward a role as a crypto hub.

In conclusion, Zero and ETH can collaborate on RWA initiatives. They are not simply L1 and L2; from a value and ecosystem perspective, their synergy might even surpass that of L2 collaborations. Zero’s emergence is not a crisis for Ethereum but an opportunity.