🚦 LayerZero OFT Standard: DeFi’s Cross-Chain Backbone? @LayerZero_Core's Omnichain Fungible Token (OFT) standard has brought the bridged asset amount to a total of $44B, underlying an important dependency of this mechanism as exposure of large DeFi protocols grows. OFTs aim to enable native cross-chain tokens, reducing liquidity fragmentation and giving asset issuers customization control. But risks remain: - Security depends on how projects configure their off-chain verifiers (DVNs/Executors). Poor setup = centralization risk. - Adapter-based OFTs (for existing tokens) introduce custodial, governance, and rehypothecation risk — locked collateral becomes a single point of failure. - Legal & regulatory uncertainty is elevated, as omnichain tokens blur jurisdiction and compliance lines. How does it compare? - Traditional bridges: More custodial risk, fragmented liquidity. - Canonical bridges: Secure, but slow and limited to specific chains. -@circle CCTP: Seamless for USDC, but fully centralized. - @chainlink CCIP: Similar issuer control, but fixed security model. Bottom line: OFTs are a leap forward for DeFi interoperability, but security and trust depend on each project’s configuration. Users and protocols must scrutinize particular DVN setups before diving in. Full research in the reply 👀

Read the detailed analysis discussing these considerations to get familiar with the particular risks and trade-offs at