TL;DR

• Wormhole (W) is one of the most prominent and well-known companies in the cross-chain communications market.

• Wormhole began as a cryptocurrency bridge platform in late 2020 and has since developed into a comprehensive cross-chain protocol that provides a wide range of products necessary for cryptocurrency activities across several networks.

• More than 1 billion cross-chain messages and more than $40 billion in cryptocurrency funds processed since it began operations are two significant operational milestones that it has just reached.

About Wormhole

• Why Do We need cross-chain Bridges?

There are currently more than 30 blockchains with sizable ecosystems, Ethereum being the most popular. As L1s and L2s become more prominent, and as Alt L1s like Aptos and Sui become more brilliant, we are gradually moving towards a multi-chain future in which numerous ecosystems coexist.

In order to achieve a genuine multi-chain future, we must facilitate the exchange of information and capital. This is where bridges become useful!

There are essentially two kinds of bridges -

1. Two-way Asset Bridge: facilitates capital flow.

2. Messaging Bridges: facilitates information exchange.

• Introduction to Wormhole

Wormhole (W) is a cross-chain protocol with a diverse range of products that facilitate communication and messaging across more than 30 blockchain and Layer 2 networks. These include all of the major smart contract chains, such as Ethereum, BNB Chain (BNB), Solana (SOL), Polygon (POL) and Avalanche (AVAX), to name just a few. Some of the key features of wormhole are -

Wormhole Messaging -

The primary function of Wormhole is its cross-chain messaging protocol, which enables DApps to send and receive messages quickly and easily over more than 30 blockchains. This is a great substitute for maintaining separate smart contracts on each chain that DApp users would wish to use.

To enable smooth communication and interoperability between different blockchain networks, Wormhole Messaging is integrated with both Polkadot's native Cross-Consensus Message Format (XCM) and the Cosmos-native Inter-Blockchain Communication protocol (IBC).

Wormhole Connect -

Blockchain developers can incorporate cross-chain asset bridging into their DApps with ease thanks to Wormhole Connect. As a developer, all it takes to perform asset transfers across Wormhole's broad network of supported blockchains is three lines of code.

The transfers are made possible by this approach by utilising the Portal token bridge, Wormhole's bridging platform. Based on the underlying protocol, Wormhole's native crypto bridge is called Portal. The main component that makes up the system that enables the transfer of cryptocurrency assets is Portal, whilst the messaging protocol is designed to deliver small cross-chain data packets.

Overview

• Technical Architecture of Wormhole

Wormhole keeps fundamental smart contracts running on each of the blockchains in its larger network in order to facilitate cross-chain messaging through its main protocol. Lightweight cross-chain data packets are sent from a DApp's smart contract to the Wormhole contract on the source chain when it needs to convey information or a message to another blockchain.

Verified Action Approvals (VAAs) are cross-chain data packets that are created when these packets are received and processed by the Wormhole smart contract within the Wormhole ecosystem. The decentralised Guardian network and VAA message Relayers are the two main components of the platform's off-chain segment, which receives the VAA messaging data at this point.

Guardians are essential to Wormhole's off-chain processing and data verification since they independently observe and sign the messages sent by the Wormhole core contract on each supported chain, ensuring their authenticity and correctness. Usually, institutional blockchain service providers are the Guardian nodes.

Once a sufficient number of Guardians have signed a message, the message and metadata are integrated with the signature collection to complete the VAA. After verification, Relayers are given permission to send the message to the destination chain. After receiving the message and processing it, the Wormhole smart contract sends the formatted, finalised data to the DApp's smart contract on the chain.

OnChain Data

• Tokenomics

The main purpose of W is to serve as a governance token. Through the Wormhole DAO, a decentralised governing organisation composed of W holders, token holders will have the ability to cast votes on a variety of matters pertaining to the evolution and course of the protocol. The DAO will initially be in charge of overseeing Wormhole's treasury and community operations.

It is intended for the DAO to eventually assume greater control over platform governance procedures, including technical and operational choices like adding or removing blockchains that are linked to the protocol, updating smart contracts, changing fee schedules, launching new token utilities, and choosing new Guardian network members.

W tokens can be traded on centralized crypto exchanges. At the time of writing, the most popular exchange to buy and trade Wormhole is Gate.io, where the most active trading pair W/USDT has a trading volume of $8,480,320 in the last 24 hours. Other popular options include OKX and MEXC. The trading volume of Wormhole (W) is $139,058,847 in the last 24 hours, representing a -22.20% decrease from one day ago and signalling a recent fall in market activity.

1. Guardian Nodes: 510,000,000 W

Wormhole’s Guardian Network has been allocated 5.1% of the token supply.

2. Community & Launch: 1,700,000,000 W

The Community has been allocated 17% of the token supply.

3. Core contributors: 1,200,000,000 W

The core contributors to Wormhole have been allocated 12% of the supply.

4. Ecosystem & Incubation: 3,100,000,000 W

5% or 500,000,000 W will be unlocked at TGE with the remaining 26.1% thereafter.

5. Strategic Network Participants: 1,160,000,000 W

11.6% of the supply has been reserved to allow strategic network participants to take a vested interest in the long-term success and stability of the network through private sales.

6. Foundation Treasury: 2,330,000,000 W

2% of the Foundation’s Treasury will be unlocked at TGE, while the remaining 21.3% locked W will unlock linearly according to the Token Release Schedule.

Founding Story

According to the report, Jump Trading withdrew from the cryptocurrency market after investing over $320 million in it nearly two years ago in the aftermath of a significant attack.

The Web3 ecosystem saw close to $26 billion invested in VC-backed firms last year. Nevertheless, according to Crunchbase data, less than $6.5 billion has been raised globally by entrepreneurs in this field this year, marking a sharp decline in that figure.

The creators of Wormhole, a platform that facilitates communication between developers on various blockchains, had also announced the establishment of Wormhole Labs, a stand-alone business that “specializes in building products, tools, and reference implementations” in order to support the expansion of cross-chain development.

Wormhole Labs co-founder and CEO Saeed Badreg stated, "Nearly three years ago, Wormhole was launched with the vision of a world resembling the one we see today." "We launched Wormhole Labs, devoted to developing the technology that enables effective blockchain-to-blockchain communication, to reaffirm our commitment to this vision."

Summary

Wormhole started as a way to transfer cryptocurrencies between blockchains but has become a much bigger player, offering tools for all sorts of interactions across different blockchains.

Think of blockchains as separate islands, each with its own strengths and weaknesses. Normally, there's no way to send things or communicate between them. Wormhole builds bridges to connect these islands.

Wormhole offers Wormhole Messaging and Wormhole Connect.

Wormhole also has its own token (W) that lets holders vote on the future of the protocol through a decentralized organization (DAO). This DAO is like a council that decides how the bridges will be built and maintained.

Overall, Wormhole is a key player in making blockchains work together. It's like building a network of bridges between islands, allowing communication and exchange to flow freely.

FAQs

Q) Is Wormhole secure?

Every design decision in Wormhole begins with the safety and privacy of your data in mind. We can't read your files, and no one else can either. Privacy isn’t an optional mode — it’s just the way that Wormhole works.

Q) What libraries are available for handling queries?

The Query TypeScript SDK can be used to create query requests, mock query responses for testing, and parse query responses along with some utilities for posting query responses.

Q) Can anyone run a Query Proxy server?

The Query Proxy is currently permissioned by the Guardians. The guardian nodes are configured to only listen to a set of allow-listed proxies. However, it is possible that this restriction may be lifted in the future and/or more proxies could be added.