What is Wormhole?

Wormhole (W) is a cross-chain protocol offering a variety of products to enable communication and messaging across over 30 blockchains and Layer 2 networks. This includes major smart contract chains like Ethereum, BNB Chain (BNB), Solana (SOL), Polygon (POL), and Avalanche (AVAX), among others.

Wormhole debuted in 2020 as a crypto-bridging tool for transferring funds between blockchains, specifically Solana and Ethereum. In early 2022, the project was rebranded from Wormhole Token Bridge to simply Wormhole, shifting focus towards a lightweight messaging protocol for cross-chain communications.

The Portal token bridge, previously known as the crypto bridge, is still a key product within the Wormhole ecosystem. Wormhole now supports over 20 blockchains and Layer 2 protocols. Its offerings include a cross-chain messaging protocol, an on-chain querying tool, the Portal token bridge, a solution for connectivity with the Cosmos ecosystem, and a protocol for native token transfers.

In essence, the Wormhole platform provides developers with a comprehensive suite of tools for cross-chain operations and functionalities.

What is the history behind Wormhole?

Wormhole was established by Jump Crypto, a division of Jump Trading Group focused on development. Launched in 2021, the protocol initially served as a token bridge, facilitating token transfers between blockchains, particularly between Solana and Ethereum. Wormhole later progressed with the introduction of Wormhole V2, transforming into an interoperability layer that provides a foundation for chains and decentralized applications to easily build upon.

Wormhole V2 is a messaging protocol that allows various blockchains to interact with each other. This technology supports various applications, such as token transfers between chains, cross-chain governance for protocols operating across chains, and NFT transfers across chains, which could be applied to multi-chain games. Wormhole V2 has also expanded the protocol's services to include Terra and the BNB Smart Chain.

How Does Wormhole Work?

Wormhole enables cross-chain messaging through its core smart contracts on each blockchain in its network. When a DApp on one platform wants to send data or a message to another blockchain, the DApp's smart contract sends lightweight cross-chain data packets to the Wormhole contract on the source chain.

The Wormhole contract processes the data packets and initiates the creation of Verified Action Approvals (VAAs). The VAAs are sent to the platform's off-chain segment, which consists of two key components: the decentralized Guardian network and VAA message Relayers.

Guardians play a vital role in off-chain data processing and verification in Wormhole. They monitor and validate messages for accuracy and legitimacy and independently sign the messages produced by the Wormhole core contract on each supported chain to create VAAs. Guardian nodes are often institutional blockchain service providers.

Once enough Guardians sign a message, the collection of signatures is combined with the message and metadata to complete the VAA. The verified message is then transmitted to Relayers, who forward it to the destination chain. The Wormhole smart contract receives, processes, and sends the formatted data to the DApp's smart contract on the target chain.

What is the story of W in Wormhole?

For over three years since its inception, the Wormhole platform has evolved from being a crypto bridge to becoming a full-fledged cross-chain messaging protocol, all without having its native cryptocurrency. In early February 2024, the team behind the project revealed plans to introduce the platform's native W token.

W will primarily serve as a governance token. Token holders can participate in decision-making regarding the protocol's development and direction through the Wormhole DAO, a decentralized governance organization composed of W holders. Initially, the DAO will manage Wormhole’s community and treasury operations.

As time progresses, the DAO is expected to assume greater responsibility for governance processes, including operational and technical decisions such as adding or removing blockchains from the protocol, upgrading smart contracts, modifying fee schedules, introducing new token utilities, and selecting new members for the Guardian network.

W will be available on two blockchains—Ethereum as an ERC-20 token and Solana as an SPL token. The token's total supply is capped at 10 billion, with 1.8 billion (18%) designated as the initial circulating supply. The remaining 82% will be released gradually over four years.

The 17% allocated for Community & Launch will be distributed via airdrops, with 11% (1.1 billion W) set for an airdrop during the token generation event (TGE) and the remaining 6% (600 million W) airdropped four months later.

What are the key features of Wormhole?

The importance of Wormhole crypto extends beyond its cross-chain bridging and messaging capabilities, which allow decentralized applications (dApps) to send and receive messages across at least 30 blockchains. Here are some of its key features:

▪️ Wormhole ZK: Wormhole integrates zero-knowledge (ZK) proofs into its core protocol, enhancing the security and trustworthiness of its cross-chain transfers. ZK proofs enable permissionless verification of messages, allowing parties to verify the authenticity of cross-chain transfers cryptographically without the need for third-party involvement.

▪️ Wormhole Queries: This feature allows developers to efficiently and cost-effectively access blockchain data. Instead of relying on centralized data providers to store complete copies of blockchains, developers can query on-demand on-chain data such as smart contract states or token balances, reducing overhead processing.

▪️ Wormhole Gateway: The Wormhole Gateway serves as an appchain that connects Cosmos to other blockchains. Utilizing the Cosmos SDK, it provides a developer-friendly environment for creating and deploying dApps within the Cosmos ecosystem.

▪️ Wormhole Connect: This simplifies the integration of Wormhole's cross-chain features into dApps. With just a few lines of code, developers can incorporate wrapped or native tokens directly into dApps, streamlining the development process and making Wormhole's cross-chain functionality more accessible.

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