As Wall Street embraces blockchain technology, the crypto industry is still dealing with an existential problem: how to scale the tech so that it can handle the massive volume created by traditional finance entities like the New York Stock Exchange. Meanwhile, big banks and trading firms are seeking reassurances that their sensitive client data does not appear on the public ledger of a blockchain like Ethereum or Solana. One startup believes it has found a way to address these concerns. On Tuesday, the Andreessen Horowitz and Sequoia-backed crypto company LayerZero announced a proposed solution: a new blockchain called Zero designed to meet the needs of Wall Street.
In an interview with Fortune, cofounder Bryan Pellegrino said that the Zero blockchain can overcome the scaling challenge thanks to a breakthrough on a cutting-edge type of technology known as zero-knowledge proofs, which allows different parties to verify information in a privacy-preserving method.
“[LayerZero] has such an expansive understanding of what’s going on in the markets,” Wood told Fortune. “Really bringing internet speed to finance—that’s a big idea.”
LayerZero plans to hold a demonstration of the blockchain on Tuesday, though it will not launch until September. (Pellegrino says that they were able to achieve the breakthrough partly by hiring two of the world’s leading ZK engineers and programmers, whose names are still secret even to the majority of his 165-person company.)
“One of the key hurdles has been speed and transactions per second,” Wood said. “This is in a completely different league.”
Pellegrino pointed to the partners coming on board as evidence that LayerZero will help break the logjam of Wall Street’s blockchain adoption. That includes Citadel, which is making an investment into LayerZero through a token purchase, though they declined to specify the deal size. The stablecoin giant Tether also announced it would be investing in the company, as well as ARK.
“When you think about the next few years, how do markets move from 7/5 to 24/7—what does it look like when markets move entirely global?” Pellegrino said. “How do you actually build those markets for the future?”
At this point, everything is still theoretical, from the Zero blockchain itself to how the NYSE integrates decentralization into its core infrastructure. When asked how the NYSE would adopt Zero, Pellegrino said that he doesn’t want to speak on behalf of the company, arguing that it couldn’t currently manage its systems through blockchain owing to cost and speed issues.
“It’s not what exists today,” said LayerZero cofounder Raz Zarick. “But something that actually uses 2 million transactions per second is the future world economy.”
