PayPal adds LayerZero support for PYUSD transfers

What’s new? Stablecoin PYUSD from payment company PayPal has started using LayerZero to optimize transfers between Solana and Ethereum blockchains. According to the LayerZero team, the integration will address liquidity fragmentation and provide fast, secure, and cost-effective transactions for users and businesses.

Press release

What else is known? The developers clarified that PYUSD has started using the Omnichain Fungible Token (OFT) standard they created to perform cross-chain transfers. This will allow users who self-store their tokens using non-custodial solutions to seamlessly transfer assets between blockchains without the need to use centralized payment platforms such as Venmo or PayPal.

PYUSD’s market capitalization and its distribution across the two supported blockchains have changed significantly in recent months. On August 26, PYUSD’s capitalization reached a record of $1 billion, with more than $660 million circulating on the Solana network and $340 million coming from Ethereum.

However, by the time the news was published, PYUSD’s capitalization had almost halved to $513 million, with only $166 million circulating on Solana, while Ethereum hosted $384 million.

PYUSD was launched on August 7 last year and initially only supported the Ethereum blockchain. The asset is issued by US-regulated fintech company Paxos under the PayPal brand, it is pegged to the US dollar at a 1:1 ratio and is fully backed by dollar deposits, short-term US Treasuries, and similar cash equivalents.

Support for Solana was added in May of this year. The initiative was implemented with the support of Crypto.com’s centralized exchange (CEX) and the leading Solana crypto wallet Phantom. The Solana functionality made PYUSD transactions on this network more confidential compared to Ethereum.

At the same time, crypto payment company MoonPay opened the ability for US users to buy and sell more than 110 cryptocurrencies, including PYUSD, using PayPal. In September, PayPal allowed crypto transactions for business accounts, and in October it conducted the first B2B payment in PYUSD. In November, the company began working with the state of Detroit to allow local residents to pay taxes with cryptocurrency.

Paxos and Stripe have launched a platform for payments in stablecoins

The new product supports USDP, PYUSD, and USDC coins

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As for LayerZero, it is a cross-chain protocol for transferring information between more than 90 blockchain networks, including Ethereum, Solana, Binance Smart Chain, Polygon, Avalanche, Aptos, Fantom, Arbitrum, Optimism, Polkadot, and Algorand.

With LayerZero, developers can create applications and products that support multiple blockchains, including stablecoins, decentralized lending platforms, and digital identity solutions. More than 300 teams are developing within the ecosystem.

Canadian developer LayerZero Labs raised $6 million back in September 2021 with participation from Binance Labs. In March 2022, the company raised $135 million at a valuation of $1 billion. One of the participants in the round was the now-bankrupt crypto exchange FTX.

Last April, LayerZero Labs raised another $120 million, with the company’s valuation increasing to $3 billion. The main investors, like last time, were venture capital funds Andreessen Horowitz (a16z) and Sequoia Capital.

The main product of the protocol ecosystem is the Stargate bridge, which offers a simplified transfer of assets between different networks that does not involve locking up the original assets and releasing synthetic versions of them on another network.

In June, the LayerZero team launched the native token ZRO and held an airdrop to early adopters who sent donations to a non-profit association of Ethereum researchers and developers called Protocol Guild. In the run-up to the giveaway, Arbitrum’s daily revenue hit a record high.

ZRO is currently ranked 203rd in the overall cryptocurrency ranking with a capitalization of $389,74 million and is trading at $3,5, having lost 4,8% over the day. The weekly gain was 4,3%, but the value has barely changed since launch.

According to a report by Messari analysts on the state of the LayerZero ecosystem in Q3, the value of processed transactions grew 161% over the quarter. It is noted that regular users use the protocol to make high-value transfers: the average transaction amounted to $1668.

In addition, crypto custodian BitGo selected LayerZero as its infrastructure provider for Wrapped Bitcoin (WBTC), expanding support for BNB Chain and Avalanche and making transfers between networks safer and cheaper.

In late September, the team announced the second season of airdrop, which resulted in a 433% increase in activity. It is noteworthy that wallets that received ZRO at launch but did not show any further activity will not be able to participate in the new giveaway.