Defactor partners with LayerZero to address key challenges in RWA
January 31, 2025 – Dublin – Defactor, a leading platform for real-world asset (RWA) tokenization, is partnering with LayerZero, an omnichain interoperability protocol, to overcome key challenges in the DeFi space. This collaboration will enhance cross-chain liquidity, security, and scalability, creating a more interconnected blockchain ecosystem. By combining LayerZero’s seamless omnichain technology with Defactor’s end-to-end platform for tokenizing real-world assets, users can manage tokenized assets across multiple blockchains without technical constraints.
Defactor and the OFT Standard
A key milestone in this partnership is Defactor’s adoption of the Omnichain Fungible Token (OFT) standard, developed by LayerZero. This eliminates the need for asset wrapping, intermediary chains, or liquidity pools, allowing $FACTR tokens to move freely across networks. $FACTR plays a crucial role in governance and incentivization within the Defactor ecosystem, and this integration strengthens its utility and accessibility.
Addressing Major RWA Challenges
Tokenizing real-world assets has vast potential but faces obstacles that hinder adoption. This partnership aims to address:
- Fragmented Liquidity – RWAs are often siloed within individual blockchains, limiting market efficiency. The OFT standard enables seamless cross-chain movement, consolidating liquidity and expanding investor access.
- Security Risks – Traditional cross-chain bridges introduce vulnerabilities like de-pegging and exploitation. LayerZero’s burn-and-mint mechanism ensures secure, direct token transfers, reducing reliance on riskier bridging methods.
- Interoperability Barriers – Many RWAs struggle to integrate with DeFi applications. LayerZero’s decentralized messaging infrastructure allows seamless interaction with a diverse range of blockchain ecosystems.
- Complex User Experience – Managing multi-chain assets can be cumbersome. Standardizing operations via OFT simplifies asset transfers and reduces user friction.
- Institutional Adoption – Blockchain complexity deters institutional investors. LayerZero’s decentralized, permissionless architecture enhances security and usability, making RWAs more attractive to institutions.
How It Works
Defactor and LayerZero’s integration leverages:
- Burn-and-Mint Mechanism – Tokens are burned on the source chain and minted on the destination chain, ensuring consistent supply across networks.
- Ultra Light Nodes (ULNs) – Reduces costs and enhances cross-chain efficiency without compromising security.
- Decentralized Verifier Networks (DVNs) – Eliminates single points of failure, improving transaction reliability.
- lzRead Functionality – Allows smart contracts to access on-chain data from multiple blockchains in a single function call.
Defactor complements these capabilities with secure onboarding, automated compliance checks, governance tools, and lending/borrowing solutions. This partnership streamlines tokenized RWA management, unlocking broader adoption and efficiency across blockchain ecosystems.
About LayerZero
LayerZero is an open-source, immutable messaging protocol designed to facilitate the creation of omnichain, interoperable applications. By enabling seamless communication across multiple blockchains, LayerZero empowers developers to build decentralized applications that operate simultaneously on various networks.
For media inquiries please contact:
contact@defactor.com