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FollowingOverlayerfi integrates LayerZero OFT standard and migrates to full-chain infrastructure
Overlayerfi is integrating LayerZero_Core's full-chain homogenization token (OFT) standard and migrating its Overlaid Assets to full-chain infrastructure. The move aims to eliminate liquidity bottlenecks and supply constraints that arise when operating across Layer 2 silos.
Mechanism of Action of the OFT standard
The OFT standard operates through a destruction-cast mechanism: it deducts tokens by destroying or locking on the source chain, and then credits the equivalent amount of tokens by casting or unlocking on the target chain, thereby maintaining a unified global total supply across all connected networks.
This eliminates the need for encapsulated assets or chain-specific liquidity pools, which are a common source of fragmentation in traditional bridging solutions. For Overlayer, the actual effect is straightforward: market participants will be able to issue assets on Ethereum and transfer them to more than 160 other supported networks without being limited to supply caps on a specific chain or managing separate liquidity pools on each chain.
LayerZero's Position in Cross-Chain Infrastructure
The choice of LayerZero reflects its growing dominance in the field of interoperability. The protocol's OFT standard currently accounts for 87% of all cross-chain transfers and has supported a total of US$290 billion in cross-chain transactions on more than 160 blockchains, including stablecoins and tokenized stocks.
The standard has attracted a wide range of adopters. There are currently more than 733 OFT tokens, including Tether's USDt0 and PayPal's PYUSD, and the standard has processed US$166.9 billion in transfers. For Overlayer, building on infrastructure of this size reduces execution risks and connects to a large existing chain and user network from day one.
This migration also circumvents a structural issue that affects many DeFi protocols that operate across multiple Layer 2 networks: fragmentation of mobility. When assets are chain-segregated, the depth is spread across different locations, making it difficult to efficiently execute transactions or maintain consistent prices. By unifying supply under the OFT model, Overlayer does not have to deal with this complexity independently.
LayerZero cannot host OFT tokens, cannot make security decisions that will change the transfer verification method, and cannot disable support for a certain chain. The non-custodial nature of the OFT standard ensures that tokens are always under the control of the project party, eliminating counterparty risks common in other cross-chain solutions.
