Wormhole (W) is one of the leading internetworking protocols in the crypto industry

Bank users can easily transfer their funds from one credit organization to another, but transferring their assets from one blockchain to another is not as easy. However, developers have released cross-chain solutions that allow digital assets to be transferred between different blockchain networks. One of these solutions is the Wormhole protocol.

What is Wormhole?

Wormhole is a decentralized cross-chain or multichain protocol that allows you to transfer cryptocurrencies between different blockchain networks. Wormhole supports over 30 different blockchains, including:

• Ethereum,
• Solana,
• Polygon,
• Tron and many others.

It is worth noting that Wormhole is not a specific application or blockchain but a protocol that provides the necessary tools for developing decentralized interchain solutions such as cross-chain bridges, DEX exchanges with Multichain support, cross-chain aggregators, and others.

Wormhole is founded by Jump Crypto, one of the most famous investment funds in the crypto industry. Jump Crypto fund has invested in many well-known crypto projects, such as:

• Aptos,
• Injective,
• Celestia and others.

The Wormhole protocol was launched in 2021, but initially, it allowed cryptocurrency transfers only between Ethereum and Solana blockchains. It is also worth noting that Wormhole was one of the first cross-chain protocols for the Solana network, which quickly gained popularity in the crypto industry.

Later, updates to the Wormhole protocol were released, which added new blockchain networks and the ability to transfer other types of assets, such as non-fungible tokens (NFTs).

As of May 2024, Wormhole is one of the leading cross-network protocols, connecting dozens of blockchain networks that are isolated from each other and providing various solutions that allow users to not only transfer assets between blockchains but also perform cross-chain swaps (exchanges between different decentralized networks).

Wormhole ecosystem

One of the Wormhole ecosystem's key and best-known products is the Allbridge cross-chain solution, which allows users to transfer assets between networks and exchange them (i.e., perform cross-chain swaps).

Allbridge supports 25 blockchains, and the number of digital assets (TVL) blockchains exceeds $73 million. Allbridge has its mini-ecosystem consisting of two essential products:

1. Allbridge Core — a cross-chain exchange for exchanging stablecoins between different blockchain networks;
2. Allbridge Classic — a cross-chain bridge for easy transfer of digital assets between blockchains.

The second well-known product of the Wormhole ecosystem is the Jupiter cross-network DEX aggregator based on the Solana blockchain. The Jupiter aggregator allows swaps in the underlying network and transfers assets between Ethereum, Solana, BNB Chain, Tron, Avalanche, Optimism (now OP Mainnet), Polygon, Arbitrum One, Fantom, Base, and Linea.

In total, the Wormhole ecosystem includes more than a dozen cross-chain protocols, including DEX exchange C3, DEX aggregators Hashflow and Mayan Swap, and cross-chain bridges Portal and Carrier. More than 200 decentralized applications have been created on the basis of Wormhole's cross-chain technology.

Wormhole token

In April 2024, Wormhole issued its own W token. Initially, the W token was only released in two formats:

1. ERC-20 — the token standard on the Ethereum network;
2. SPL is the token standard on the Solana network.

However, the W token later appeared in three other networks: Optimism (OP Mainnet), Arbitrum, and Base.

One of the main functions of the W token is to manage the Wormhole ecosystem. W token holders can influence the future of the protocol by participating in decisions about its development, including:

• Managing supported networks (adding and removing blockchains from the Wormhole ecosystem);
• Adding new guardians to the Guardian Network;
• Updating smart contracts features;
• Managing the speed of cross-network transactions;
• Identifying uses for the W token;
• Adjusting network fees for different applications of the Wormhole ecosystem, and more.

The maximum issuance of W is 10 billion, of which only 1.8 billion tokens (18%) have been issued as of May 2024. Regarding capitalization, which is $1.04 billion, Wormhole ranks 83rd in the cryptocurrency ranking. The W token can provide liquidity on various decentralized exchanges and generate revenue in cross-chain protocol pools.