In the field of encryption, with the increasing variety of public chains, the relative independence between them is like isolated islands hanging overseas, which is not conducive to the development of their own ecology. Therefore, starting from asset cross-chain, more and more cross-chain technologies have been developed, and multi-chain has become the mainstream concept of current blockchain. Many new concepts have also been proposed one after another: cross-chain bridge, chain interoperability, full chain, account abstraction, chain abstraction, and intent transaction.
Wormhole, with its unique role, connects numerous blockchain ecosystems, connecting over 25 + mainstream blockchains, supporting multiple blockchain environments, not just EVM compatibility, and this number is still increasing. By providing a seamless, secure, and decentralized universal messaging protocol, it makes it possible for assets and information to flow between different blockchains.
This innovation not only promotes the development of DeFi, governance, asset bridging, NFTs, and native cross-chain applications , but also provides unprecedented flexibility and convenience for developers and users. Moreover, The First officially announced that it will launch the Wormhole ecological token $W in the spot area at 16:00 (UTC + 8) on September 30, 2024. Today, we will deeply understand the market prospects of Wormhol through the development experience, core technology, operation mode, and token economics of Wormhole, so that we can make the correct investment strategy.
What is a Wormhole?
As a groundbreaking protocol, Wormhole can connect different blockchains and allow them to communicate with each other. Wormhole enables developers and users to leverage the unique features and advantages of various blockchain ecosystems, breaking down barriers and promoting collaboration in a decentralized world.
Wormhole was originally incubated and supported by Jump, designed to enable developers to build native cross-chain applications that cover multiple chains. Wormhole started as a hackathon project with the goal of finding a solution that would enable blockchains to "communicate with each other". As the project has grown, to this day Wormhole has evolved into a universal messaging protocol that connects multiple chains in the ecosystem. This evolution is consistent with its broader vision of becoming the foundational layer for developers to build diverse cross-chain applications.
II. Wormhole operation mode
Wormhole's workflow is both concise and efficient, with a cross-chain message format called VAA (Verifiable Action Approval) at its core. A specific set of contracts called Wormhole Core Contracts are deployed on each chain supported by Wormhole. These contracts are responsible for converting cross-chain requests of the application into VAA.
Request generation and VAA conversion
III. Wormhole product use cases
Messaging
As one of Wormhole's core products, Messaging provides a secure and efficient cross-chain information transmission solution for different blockchain networks. It simplifies the process of cross-chain interaction and promotes the growth of users and liquidity.
Connect
Connect provides developers with a set of simplified integration tools, allowing them to easily integrate Wormhole's cross-chain functionality into their own applications. This product lowers the threshold for cross-chain development and accelerates the popularity of cross-chain applications.
Gateway
Gateway is an application-specific blockchain based on the Cosmos SDK. It connects the liquidity and users of Ethereum and other blockchains with the Cosmos chain through an IBC liquidity router. This product provides a convenient way for non-native assets to enter the Cosmos ecosystem.
Queries
Queries provides application developers with real-time cross-chain data query capabilities, reducing latency and gas fees. It solves the problem of cross-chain digital identity fragmentation, supports a unified identity system, and enhances User Experience.
Wormhole team and financing information
In November 2023, cross-chain protocol Wormhole completed a $225 million financing at a valuation of $2.50 billion and established Wormhole Labs. This makes it the largest crypto project finance in 2023. There was no lead investor in this round of financing, with participants including Brevan Howard, Coinbase Ventures, Multicoin Capital, ParaFi, Dialectic, Borderless Capital, Arrington Capital, and Jump Trading. Wormhole Labs CEO Saeed Badreg stated that technically, this is the company's first financing, while Jump Crypto, the crypto department of high-frequency trading company Jump Trading, has been incubating the project for many years.
V. Wormhole Token Economics
The native token of Wormhole is $W, with a total supply of 10 billion coins and an initial circulation of 1.80 billion coins, which will be distributed on the Ethereum, Solana, Arbitrum, Optimism, and Base networks. The distribution method is as follows:
Guardian Node: 5.1% tokens (510 million)
Community: 17% (1.70 billion)
Ecosystems and hatching: 31% (3.10 billion)
Core contributors: 12% (1.20 billion)
Strategic network participants: 11.6% (1.16 billion)
Foundation treasury: 23.3% (2.33 billion coins)
Wormhole, with its unique role, connects numerous blockchain ecosystems, connecting over 25 + mainstream blockchains, supporting multiple blockchain environments, not just EVM compatibility, and this number is still increasing. By providing a seamless, secure, and decentralized universal messaging protocol, it makes it possible for assets and information to flow between different blockchains.
This innovation not only promotes the development of DeFi, governance, asset bridging, NFTs, and native cross-chain applications , but also provides unprecedented flexibility and convenience for developers and users. Moreover, The First officially announced that it will launch the Wormhole ecological token $W in the spot area at 16:00 (UTC + 8) on September 30, 2024. Today, we will deeply understand the market prospects of Wormhol through the development experience, core technology, operation mode, and token economics of Wormhole, so that we can make the correct investment strategy.
What is a Wormhole?
As a groundbreaking protocol, Wormhole can connect different blockchains and allow them to communicate with each other. Wormhole enables developers and users to leverage the unique features and advantages of various blockchain ecosystems, breaking down barriers and promoting collaboration in a decentralized world.
Wormhole was originally incubated and supported by Jump, designed to enable developers to build native cross-chain applications that cover multiple chains. Wormhole started as a hackathon project with the goal of finding a solution that would enable blockchains to "communicate with each other". As the project has grown, to this day Wormhole has evolved into a universal messaging protocol that connects multiple chains in the ecosystem. This evolution is consistent with its broader vision of becoming the foundational layer for developers to build diverse cross-chain applications.
II. Wormhole operation mode
Wormhole's workflow is both concise and efficient, with a cross-chain message format called VAA (Verifiable Action Approval) at its core. A specific set of contracts called Wormhole Core Contracts are deployed on each chain supported by Wormhole. These contracts are responsible for converting cross-chain requests of the application into VAA.
Request generation and VAA conversion
- When a user or application wants to transfer assets or information between Wormhole-supported blockchains, they will first make a cross-chain request to Wormhole.
- This request is then processed by the Wormhole system and converted into a specific cross-chain message format, namely Verifiable Action Approval (VAA). VAA contains all necessary information required to perform cross-chain operations, such as asset quantity, destination address, timestamp, etc., and is designed to be verifiable to ensure its authenticity and integrity.
- The converted VAA will be sent to a group of nodes called Guardians for signature verification. Guardians are carefully selected and highly responsible nodes that jointly maintain the security and stability of the Wormhole network.
- Each Guardian will independently sign the VAA, indicating that they believe it is valid and secure. These signatures are then combined into a multi-signature to increase the security and reliability of the entire process.
- In order to ensure the authenticity of VAA, Wormhole requires at least two-thirds of Guardians to sign and approve VAA. This mechanism is called "threshold signature", which can improve the flexibility and scalability of the system while ensuring security.
- Once VAA obtains enough signatures, it will be relayed to the target chain by a role called Relayer. The Relayer is responsible for submitting the signed VAA to the Wormhole Core Contract on the target chain.
- During this process, the Relayer will incur certain Gas fees, including the cost of submitting the message to the Wormhole Core Contract and the cost of executing the message by the target application. Since Wormhole does not set up a public Relayer, these fees are usually paid by the Relayer itself and recovered through various Incentive Mechanisms (such as fees, rewards, etc.).
- When the Wormhole Core Contract on the target chain receives the signed VAA, it will first verify the validity and integrity of these signatures. Only after verification is passed will the message in the VAA be delivered to the target application.
- The target application will then perform corresponding cross-chain operations according to the instructions in VAA, such as transferring assets, updating status, etc. Once the operation is completed, the relevant information will be recorded on the target chain, thus achieving a closed loop of cross-chain communication.
- Wormhole ensures the security and reliability of cross-chain communication by using Guardians' multi-signature mechanism and Relayer's relay service. At the same time, its flexible architecture and scalable design enable Wormhole to support more blockchain networks and cross-chain operations.
- With the continuous development of the multi-chain ecosystem, Wormhole will continue to play an important role as a universal cross-chain information transmission protocol, providing strong support for interoperability in the blockchain world.
III. Wormhole product use cases
Messaging
As one of Wormhole's core products, Messaging provides a secure and efficient cross-chain information transmission solution for different blockchain networks. It simplifies the process of cross-chain interaction and promotes the growth of users and liquidity.
Connect
Connect provides developers with a set of simplified integration tools, allowing them to easily integrate Wormhole's cross-chain functionality into their own applications. This product lowers the threshold for cross-chain development and accelerates the popularity of cross-chain applications.
Gateway
Gateway is an application-specific blockchain based on the Cosmos SDK. It connects the liquidity and users of Ethereum and other blockchains with the Cosmos chain through an IBC liquidity router. This product provides a convenient way for non-native assets to enter the Cosmos ecosystem.
Queries
Queries provides application developers with real-time cross-chain data query capabilities, reducing latency and gas fees. It solves the problem of cross-chain digital identity fragmentation, supports a unified identity system, and enhances User Experience.
Wormhole team and financing information
In November 2023, cross-chain protocol Wormhole completed a $225 million financing at a valuation of $2.50 billion and established Wormhole Labs. This makes it the largest crypto project finance in 2023. There was no lead investor in this round of financing, with participants including Brevan Howard, Coinbase Ventures, Multicoin Capital, ParaFi, Dialectic, Borderless Capital, Arrington Capital, and Jump Trading. Wormhole Labs CEO Saeed Badreg stated that technically, this is the company's first financing, while Jump Crypto, the crypto department of high-frequency trading company Jump Trading, has been incubating the project for many years.
V. Wormhole Token Economics
The native token of Wormhole is $W, with a total supply of 10 billion coins and an initial circulation of 1.80 billion coins, which will be distributed on the Ethereum, Solana, Arbitrum, Optimism, and Base networks. The distribution method is as follows:
Guardian Node: 5.1% tokens (510 million)
Community: 17% (1.70 billion)
Ecosystems and hatching: 31% (3.10 billion)
Core contributors: 12% (1.20 billion)
Strategic network participants: 11.6% (1.16 billion)
Foundation treasury: 23.3% (2.33 billion coins)
