In This article, I Will be explaining
1.) Introduction to LayerZero. What is LayerZero?
2.) How does it work?
3.) Active Chains that allow cross-chain interactions and how it utilizes LayerZero
4.) Components of LayerZero and their functionality

1.Introduction to LayerZero. What is LayerZero?

"LayerZero" is the first trustless omnichain interoperability protocol, which provides a powerful, low level communication primitive upon which a diverse set of cross-chain applications can be built.
LayerZero provides authentic and guaranteed message delivery with configurable trust lessness.

Moving out of the context, let's explain how this relates to blockchain technology.
At the core of the blockchain concept are the three pillars, which are

1. Decentralization.
2. Transparency.
3. Immutability.

No single entity or government controls the blockchain, and actions on the blockchain are verifiable, tamper-proof and irreversible.
These pillars create a foundation upon which an entity can act without trusting any other entity. This trust guarantee is one reason why, for example, cryptocurrencies are enticing compared to fiat.

Which leads to the demand for a diverse set of functionalities spurned the growth of specialized chains. (speed, low transaction cost and accessibility) but the isolation between these ecosystems has emerged as a key limit to adoption.
Users and developers are forced to split time, resources, and liquidity between separate chains. A natural consequence of the sheer number of so-called Layer 1 blockchains.
But since transactions have always been a single-chain concept; as described below, interacting across chains has traditionally required a third-party mechanism outside of the normal blockchain cryptosystem.

In contrast, this content describes the first messaging protocol upon which native cross-chain transactions are possible: LayerZero

2. HOW DOES IT WORK?
To illustrate the powerful communication primitive LayerZero provides, we look at the example of transferring tokens from one chain to another. Currently, to convert between tokens of two chains, a user must leverage age either a centralized exchange (CEX) or a cross-chain decentralized exchange (DEX), both of which require a compromise. In the case of a centralized exchange, e.g., Binance, Coinbase and Kraken etc.
The user must trust the exchange that is tracking deposits and funding withdrawals. This trust relationship is contrary to the fundamental trust lessness of blockchain consensus and lacks the security of an on-chain automated
system. Using a DEX, such as Uniswap or THORChain alleviates the trust problem by conducting the transfer on-chain, but existing DEX implementations which involve converting the user token into a protocol-specific token that transits their intermediate consensus layer to achieve transaction consensus.

Illustration:
A cross-chain transaction, In other words it's like having a token X on chain A and wanting to transfer to Chain B. A trust boundary has to be created that the user has given an access token X on Chain A to be Transferred to Chain B. Hence the transfer is locked until validated by Chain B and the transaction is processed then the token X is now reflected on Chain B. This means that Both independent chains have to corroborate the ownership and validity of the token in order for the transaction to be valid.

Figure 2 illustrates this at a high level. Given two entities that do not collude, if
(1) One entity can produce a block header for the block containing tA on chain A.
(2) The other entity can independently produce the proof for tA on that block (transaction proof).
(3) The header and transaction proof in fact agree, then the communication protocol can deliver m to the client on chain B with the guarantee that tA ñChain A and unlock and reflects on Chain B

The process is called "BRIDGING"
A Bridge is a tool that lets you move (ports) assets from one blockchain to another, solving one of the main pain points within blockchains – a lack of interoperability.

3.) Active Chains that allow Cross-Chain Interactions and how they utilize LayerZero.

This section builds an understanding of the important players in the cross-chain interaction space, reasons they fall short of the ideals of trustless valid delivery, and how LayerZero closes that gap.

ETHEREUM
Ethereum is considered the most popular platform for decentralized finance applications built via smart contracts (it uses solidity programming language). Ethereum extends its underlying blockchain with a Turing-complete programming language that enables a library of decentralized applications to leverage the powerful security properties of the underlying chain through a developer-friendly abstraction. However, the low transaction rate of the underlying blockchain, approximately 15–45 transactions per second, has proven to be a serious scalability bottleneck that limits the popularity of the applications built to run directly on the Ethereum blockchain. Because of its programming model and popularity, many inter-chain communication techniques revolve around interfacing third-party chains with Ethereum.
LayerZero provides the ability to directly transfer state to and from Ethereum without a middleman, allowing users and applications to leverage the stability and trustworthiness of the Ethereum chain without the cost and bottlenecks of the solutions described below.

POLYGON (MATIC)
POLYGON, formerly Matic Network, is a Layer 2 network that addresses the throughput and sovereignty challenges of Ethereum using the zkEVM. Despite being the most popular platform for blockchain development, Ethereum is plagued by low throughput, making it unsuitable for certain applications. Polygon provides application specific, Ethereum-compatible side chains that combine the scalability and independence of separate chains with the community and security of Ethereum. Specialized or throughput-intensive applications run on the side chains and periodically consolidate back to the main Ethereum chain.
In contrast, LayerZero is a lower-level platform that enables direct inter-chain communication and can use be used to facilitate transfers back to the Ethereum chain without the complexities of the Polygon protocol.

POLKADOT
Polkadot (Dot) is an early example of the potential of an open cross-chain ecosystem. In Polkadot, many domain-specific, parallel chains (“parachains”) connect via a common relay chain that enables tokens and data to flow between them. However, inter-chain communication always crosses this relay chain, thus incurring additional costs. LayerZero provides the same low-level communication platform of Polkadot, without involving the extra transactions necessitated by the on-chain middleman.

ANYSWAP
AnySwap is a DEX that is created to make easy pairwise token exchanges, AnySwap relies on an intermediate token, ANY, based on Fusion distributed control right management. The use of the ANY intermediate token introduces undesirable overhead, delay, and additional transfer fees.
There are also lots of chains which include ThorChain, Cosmos, Chain-link and lots more.

Components of LayerZero
There are three components of LayerZero;

1.LayerZero Endpoints
2.Oracle
3.LayerZero Relayer

1. LayerZero Endpoints

LayerZero Endpoints are the user-facing interface to LayerZero. Each chain in the LayerZero network has one LayerZero Endpoint implemented as a series of onc-chain smart contracts. An Endpoint’s purpose is to allow the user to send a message using the LayerZero protocol backend, guaranteeing for valid delivery.

A LayerZero Endpoint is split into four modules namely the
Communicator,Validator,Network and Libraries
Communicator, Validator, and Network modules comprise the core functionality of the Endpoint while each new chain supported by LayerZero is added as an additional Library. This design allows us to add support for new chains without modifying the three core modules.

2.The Oracle

The Oracle is a third party service that provides a mechanism to, independently of the other LayerZero components, read a block header from one chain and send it to another chain. In theory, this Oracle can be any third party service that provides this mechanism, but in practice we expect to use Chain Link Which is the current industry leader for decentralized oracle networks.

3.The Relayer

The Relayer is an off-chain service that is similar in function to an Oracle, but instead of fetching block headers it fetches the proof for a specified transaction.
To ensure valid delivery, the only requirement is that for any given message sent using the LayerZero protocol, the Oracle and Relayer must be independent of each other. The protocol itself does not require any specific implementation of a Relayer, and in theory the users of LayerZero could even implement their own Relayer service.

This design allows users to be sure that the Relayer cannot collude with the Oracle, and this independence is what allows us to implement trustless validated delivery.
In practice, LayerZero provides the Relayer service while the Oracle is handled by Chain-link’s decentralized oracle network and associated consensus mechanisms.
References.

1.LayerZero whitepaper.//
Ryan Zarick, Bryan Pellegrino and Caleb Banister

2. YouTube