eIP 63: Select LayerZero OFT as EUL Cross-Chain Bridge Solution

Author

Euler Labs

Date

2025-01-29

Summary

As a follow up to eIP 60, we propose to use LayerZero’s Omnichain Fungible Token (OFT) standard for bridging EUL tokens across networks. This aims to leverage LayerZero’s OFT Adapter pattern, using a mint-burn mechanism on new networks and a locking mechanism on Ethereum mainnet where EUL is already deployed. Using LayerZero’s tech stack enables more widespread deployment of EUL across multiple chains while maintaining the token’s security and unified supply.

Motivation

As part of eIP 60 Euler will soon be deployed to 15+ networks. As part of all new deployments EUL token needs to be available for bridging in order for the token to be used in FeeFlow and as an incentive solution for bootstrapping new markets. In the initial eIP we previously explored using Wormhole’s NTT solution for this purpose. However, on further investigation it is clear that LayerZero’s OFT solution will provide Euler with greater immediate network coverage for its expansion activities. LayerZero supports virtually all EVM chains where Euler aims to deploy, including emerging L2s and newer networks. This extensive reach is crucial for Euler’s expansion strategy, as it eliminates the need to wait for bridge infrastructure to become available on new networks. LayerZero’s established presence in the DeFi ecosystem, particularly among major L2s and newer networks, provides infrastructure support and new integration opportunities. This ecosystem alignment is particularly valuable as Euler expands to new networks where LayerZero is already the de facto standard for cross-chain communication.

Specification

The implementation would utilize two distinct OFT Adapter patterns, with both Ethereum mainnet and Base network serving as hubs for cross-chain EUL transfers. This dual-hub model simplifies the bridging infrastructure while providing users with flexibility in choosing their preferred transfer route based on gas costs and liquidity needs.

On Ethereum mainnet, we would deploy a standard OFT Adapter that implements a lock mechanism. This adapter would serve as the bridge for existing EUL tokens, locking them when transferred to other networks and unlocking them when transferred back to mainnet. As part of the initial setup, 50,000 EUL tokens will be locked on mainnet to match the amount previously minted on Base network through eIP 61, ensuring proper token supply balance across networks.

On Base and other networks, we would utilize the MintBurnOFTAdapter pattern. Both Base and mainnet would act as bridge hubs, with each connecting directly to other networks. This means users can choose to transfer EUL either through mainnet (likely more expensive but potentially preferred for larger amounts) or through Base (where planned EUL liquidity will make it more convenient for typical users).

The dual-hub architecture, rather than enabling direct bridges between every possible network pair, significantly reduces operational complexity while still maintaining practical and flexible transfer routes. This approach is particularly advantageous as it combines the security and liquidity of mainnet with Base’s growing position as a leading L2 DeFi network.

This bridging structure would provide a unified solution for EUL transfers across all networks where Euler operates, while maintaining the flexibility to add support for new networks as needed.

Voting

Given Euler’s recent move to an optimistic governance framework, no formal on or off-chain voting is currently required for this proposal to pass. However, we encourage the Euler DAO and community members to provide feedback, share suggestions, and voice their opinions on this initiative. Community input will, as always, be crucial to ensuring that Euler remains relevant, competitive, and risk-managed.

Implementation

Unless any concerns are raised or the DAO would like more time for consideration of this proposal, the Prime market will be actioned by the Euler Foundation in 2 days’ time.

Disclosures, disclaimers and copyright

The author of this proposal, Euler Labs, is contracted to provide software development services by Euler DAO. Copyright is waived via CC0.

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