Is Layerzero's Zero an "Ethereum killer"?

Author: Blue Fox Notes

LayerZero recently announced the launch of its heterogeneous L1 chain, Zero, in partnership with Wall Street giants (Citadel Securities, DTCC, ICE, etc.). Zero aims to achieve 2 million TPS and reduce transaction fees to 1/10,000 of a cent. If it achieves this, it will surpass all current L1 chains.

Is Zero Chain good or bad for Ethereum? Is it the new "Ethereum killer"?

In conclusion: Zero is not a killer of Ethereum, but rather an amplifier for its ecosystem. It addresses scalability issues, does not preclude ETH's security anchoring, and in the long run, will actually drive Ethereum's evolution from a "single-machine" to a "multi-core hub."

This will be discussed from three aspects:

First, from a technical perspective, Zero's core technologies include QMDB (quantum storage/100X write speed), FAFO (scheduling algorithm/parallel execution), and "unlimited partition execution" (zone independent, 2 million TPS), and are compatible with EVM, so developers can migrate high-load DApps without rewriting Solidity code.

However, a closer look at Zero's white paper reveals that it is not an "independent kingdom." It adopts a "computation-proof-verification" paradigm: execution is completed on Zero's heterogeneous multi-core architecture, but ZK proofs (Jolt Pro zkVM, gigahertz speed) can be bridged to the Ethereum L1/L2 settlement layer, leveraging the decentralized security of Ethereum's 1 million+ validators. This is similar to the L2 Rollup model, but more flexible: it does not require mandatory calldata commits, but instead allows for optional "hot-swappable" bridging (LayerZero OFT standard, latency <100ms). When DApps migrate to Zero, they typically move 30-50% of the high-load execution components (such as NFT minting), while core governance and state synchronization can be anchored to ETH via OFT bridging, supporting optional hybrid deployments.

Why not a killer app? If Zero truly wanted to disrupt, it wouldn't need EVM compatibility (for example, Solana uses Rust to function independently); instead, its design directly addresses L2 pain points—read amplification and centralized sorting. Vitalik Buterin's recent tweets also mentioned that this "external interoperability" could strengthen ETH's role as a "trust anchor" (although not referring to Zero, but with a similar effect). Technically, Zero could function as an "external brain" for Ethereum, rather than a replacement.

Therefore, from a technical perspective, Zero and Ethereum are heterogeneous and complementary, rather than disruptive in a zero-sum manner.

Secondly, there's the issue of ETH value capture, which is what many ETH holders are most concerned about.

Zero's triggering of DApp migrations may lead to a short-term outflow of ETH value, such as a 5-10% reduction in gas fees or a 2-3% diversion of TVL (based on L2 historical simulations). However, its economic model attracts traffic through low fees, and a portion of the cross-chain value can be routed back to ETH via OFT bridging, indirectly benefiting Ethereum's security anchoring and burning mechanism—especially in RWA DvP settlements, where the routing rate may be even higher.

Zero's gas fee design is extremely affordable (<0.0001 USD/Tx), and it is optimized for high-frequency settlement of RWA (such as the trillion-dollar settlement of DTCC). However, the OFT standard of the LayerZero protocol requires cross-chain message/asset transfers to be verified by ETH, generating a bridging fee of 0.2-0.5%.

RWA is a key lever: Zero is partnering with Citadel/ICE to target TradeFi asset tokenization, but DvP (delivery vs. payment) settlements rely on the security of ETH (accounting for 60%+ of RWA's TVL). BlackRock's BUIDL fund is already listed on ETH, and Zero is only expanding its execution side, enabling fully routed backflows of tens of thousands of dollars per transaction.

In a hypothetical scenario, if Zero reaches 1 million TPS (baseline assumption), the bridge will receive $3 billion annually, and a significant portion of that value will be captured by ETH (estimated to exceed L2 call data by 2x). ETH, as the "cornerstone of currency," benefits from the Metcalfe Law: the value of multi-chain user growth.

Counterintuitively, Zero may be more advantageous for capturing the value of Ethereum (ETH) than L2.

In short, economically, Zero is not a "plunderer" but more likely a "traffic pump"—ETH gains more compound benefits rather than losses after DApps migrate to it.

Thirdly, at the ecosystem level, the ecosystem is the lifeline of blockchain. The Ethereum developer community accounts for about 70% (GitHub activity), and the L2 ecosystem locks up 80% of DApps; if Zero is a "killer," the ecosystem needs to be rebuilt from scratch. But in reality, its interoperability DNA has transformed ETH from an "island" into a "hub."

LayerZero has connected to 150+ chains (including Solana/BNB). Since its launch, many DApps have opted for a "hybrid deployment" (Zero execution + ETH governance). Most developers see Zero as a "cure"—solving L2 involution and driving ETH towards Stage 2 decentralization.

In 2026, crypto will enter the "RWA era," and Zero's TradFi portal will attract non-crypto users, which will benefit the expansion of the Ethereum ecosystem and drive Ethereum to become a crypto hub.

In summary, Zero and ETH can synergize in terms of RWA. They are not L1 and L2 in a traditional sense, but from a value and ecosystem perspective, there are opportunities for them to synergize even better than with L2. The arrival of Zero is not a crisis for Ethereum, but an opportunity.