A16z invests $55 million in LayerZero’s ZRO token

Venture capital firm Andreessen Horowitz (a16z) has invested $55 million in LayerZero, a Web3 company that developed omni-chain interoperability protocol designed to facilitate seamless communication between different blockchain networks.

The investment was made using LayerZero’s own token, ZRO, and the tokens are locked for three years. This was shared on April 17 by a16z partner Ali Yahya on X.

A16z has already invested in LayerZero before. First in March 2022, then again during LayerZero’s Series B funding round in April 2023.

Why crosschain tools matter

LayerZero builds a tool that lets apps send messages across different blockchains.

This is important for decentralized apps (DApps) and crypto traders who want to move assets or data easily between chains.

LayerZero has several rivals, like Wormhole, Stargate, Superbridge, and Connext. Wormhole is a big competitor, it raised $225 million in 2023 at a $2.5 billion valuation.

It also launched its own token (W) through an airdrop, but scammers took advantage of that.

Chainlink also offers a similar tool to connect blockchains.

The shift toward multichain support

More companies are trying to work across multiple blockchains. For example:

• Phantom, originally a wallet for Solana, now supports Bitcoin, Ethereum, and four other blockchains.
• Magic Eden, once focused only on Solana NFTs, now runs marketplaces for several blockchains.

Interoperability is important for blockchains by being able to communicate with multiple chains.