LayerZero Faces Backlash from Ethereum Users Over Financialization of Goerli Testnet

On February 21, LayerZero Labs, the protocol that provides solutions to connect various blockchains, announced the launch of its new product, Testnet Bridge. This bridge will connect the mainnet Ethereum (the primary blockchain) and the Goerli testnet (a testing blockchain) of Ethereum, allowing developers to transfer assets between Ethereum and Goerli.

LayerZero Labs announced the launch of Testnet Bridge with a tweet, stating that this is the first of several tools they are launching for the Ethereum developer community. With Testnet Bridge, developers can easily and quickly obtain Goerli-ETH without the need to wait for it from Goerli faucets or feeling stranded.

The Testnet Bridge creates a way to connect open markets for immediate pricing of ETH/Goerli-ETH. The initial price of Goerli-ETH is set to $0.10, and the pool is seeded with 12,500 Goerli-ETH. These pools are open and hosted on Uniswap on both Ethereum and Goerli. The LayerZero team welcomes the community to actively trade and provide liquidity to achieve real price discovery and equilibrium.

The two pools created in the Token Bridge design are located on two different ends of the bridge:

  • Goerli Bridge: ETH/mETH (the token representing ETH Mainnet on Goerli)
  • ETH Bridge: ETH/gETH (the token representing Goerli ETH on Mainnet)

When users swap from ETH to gETH on the pool on the mainnet Ethereum, gETH tokens will be bridged to the Goerli test network. Finally, gETH will be unwrapped to ETH format on the Goerli chain.

According to the developers, one of the biggest barriers to testing on Goerli is the inability to collect enough Goerli-ETH via faucets, not to mention the long waiting time to receive it. Therefore, LayerZero sees the creation of a simple and accessible method to access ETH on Goerli as a “public good,” a type of public commodity that serves the interests of the entire Ethereum community.

In essence, this move will make Goerli-ETH a real token with its own financial value that can be exchanged with ETH, rather than only existing independently on Goerli.

A similar model in the crypto industry is Polkadot (DOT) and its testing network, Kusama (KSM). Both are blockchains, but Kusama, despite having its own token and being traded, is only considered a testing network for changes on Polkadot.

Twitter users clash over LayerZero’s water offering on Goerli testnet

LayerZero’s move has received positive feedback from the community, with many seeing it as a great step forward for the Ethereum ecosystem.

According to a tweet from Twitter user @gregthegreek, one of the largest holders of Goerli, the initiative is “harmful” to the Ethereum community. He believes that LayerZero is creating value on a network that has not had thoughtful economics and is crossing a murky line. He also argues that testing should be free and that this initiative is wrong.

Others, however, believe that LayerZero’s initiative is a good thing. Twitter user @0xfoobar, for example, argues that testnet ETH should be free but is not, as many are currently hoarding the token. They believe that the moralizing of those who oppose the move has no power, and that tradeoffs are necessary.

LayerZero’s decision to bridge the Goerli testnet has also been criticized as it is seen as a misuse of the testnet. According to some, Sepolia, another testnet, would be more suitable for dApp testing purposes.

The controversy surrounding LayerZero’s water offering highlights the differing opinions within the Ethereum community regarding the financialization of testnets. Some believe that testnets should remain free and that financializing them may lead to unintended consequences. Others, however, believe that financializing testnets is necessary to incentivize users to test and improve dApps.

While the debate over LayerZero’s initiative continues, it is clear that the Ethereum community is passionate about the future of the blockchain and the role that testnets play in its development.

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