The IOTA side project Shimmer (SMR) has built bridges to foreign ecosystems, including Ethereum and Binance Smart Chain, via the LayerZero protocol. This should open up prospects for decentralized finance.
Shimmer (SMR) is taking a technological step forward: Shortly before the New Year, the network was integrated into LayerZero, as announced in a blog post . This was made possible because Shimmer unlocked the Ethereum Virtual Machine (EVM) at the end of September. LayerZero, in turn, is a protocol that connects more than 50 different crypto ecosystems.
Shimmer is designed as a side project of IOTA and is intended to serve as a test bed for technological development. With LayerZero, Shimmer now has bridges to Ethereum (ETH), Polygon (MATIC), Binance Smart Chain, Arbitrum (ARB), Avalanche (AVAX), Base, Fantom and Optimism, among others. This allows messages and assets to be sent between ecosystems that are actually incompatible with one another.
Read more about the integration of LayerZero solutions at IOTA, and find the latest financial news of the day with the Born2Invest mobile app.
It remains to be seen whether the offer will be well received
For Shimmer, the crypto year 2023 was disappointing from the perspective of investors. Even now, SMR’s price curve did not respond noticeably to the integration of Layer Zero. Shimmer wants to score points in the decentralized finance (DeFi) sector. There, capital invested by the data service DefiLlama is counted at almost 6 million US dollars, which is not enough for Shimmer to be among the 100 most important DeFi ecosystems.
Shimmer critics argue that the integration of EVM came far too late and is no longer a unique selling point. Shimmer’s second problem, from the perspective of the crypto sector, is a network that does not meet the principle of decentralization. At IOTA and Shimmer, committees monitor transactions that are under the control of the IOTA Foundation. The switch to a decentralized IOTA 2.0 should be successful in 2024, the technology of which will initially be tested at Shimmer.
Conclusion: LayerZero at Shimmer more than an experiment?
LayerZero is a technological asset for Shimmer. But for Shimmer, bridging the gap to Ethereum (ETH) and other large ecosystems is probably more of a feasibility study for the time being; interest in DeFi with SMR is very low. The preparatory work at Shimmer could pay off later for IOTA, where there is more liquidity.
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