An Overview of the Universal Cross-Chain Information Transfer Protocol Wormhole

Author: Wormhole CN

In the vast universe, wormholes are a magical phenomenon, connecting two distant points in space like magic, opening a dreamlike door for explorers. Similarly, in the digital world, Wormhole also carries such magic, building a mysterious bridge between numerous blockchain planets, allowing assets and data that were originally isolated to flow freely.

In today's crypto space, we live in a galaxy composed of multiple chains, where each public chain is like an isolated planet floating in the vast crypto universe. Cross-chain information transmission protocols have become the mysterious force connecting these planets, enabling them to communicate and exchange with each other. Among them, Wormhole, with its unique role, has become the true "wormhole" in the crypto universe, linking numerous blockchains. To gain a deeper understanding of this crypto universe and the operational rules of its cross-chain ecosystem, we first need to unveil the mystery of Wormhole.

This article will introduce the concept of Wormhole, its core products and use cases, ecosystem overview, working principles, and its advantages, as well as why we need a solution like Wormhole.

Part 1 What is Wormhole?

Wormhole is not just an empty name; it is a frontier explorer of cross-chain communication and one of the indispensable infrastructures in the crypto world. In simple terms, Wormhole is a decentralized universal cross-chain information transmission protocol that allows the transfer of assets and information between different blockchain networks.

Initially, Wormhole was just an asset bridge, but with the gradual development of the multi-chain ecosystem and the increasing number of multi-chain applications, today Wormhole has evolved into a universal AMB (Arbitrary-Message-Bridge) that supports the transmission of any message between 25+ heterogeneous public chains, also known as a universal cross-chain messaging protocol or interoperability protocol, while the asset cross-chain bridge function of Wormhole is handled by the frontend application Portal Bridge, which provides services externally.

As mentioned above, the development trajectory of Wormhole is not accidental. With the continuous evolution of blockchain technology and ecosystems, more and more public chains have appeared in our view, each with its unique characteristics and advantages. However, their isolated state limits their value and development potential, which is why protocols like Wormhole have emerged, aiming to break down these barriers and create a more open and interconnected blockchain world.

It is worth noting that there are two aspects of Wormhole that are easily overlooked or misunderstood, which I would like to emphasize again for readers:

• Wormhole is not a blockchain (L1 or L2), but a foundational protocol that provides communication means for blockchains or Rollups.
• Wormhole is not merely an asset bridge; although there are protocols built on Wormhole that have this function, it includes both asset transfer and information transfer (contract calls, state updates, etc.).

Part 2 How Wormhole Works

With the content from the previous section, readers should have a basic concept of Wormhole. Next, let us delve deeper into the working principles behind Wormhole.

Core Organizational Structure

Before understanding how Wormhole works, let’s first look at its core organizational structure.

The core organizational structure of Wormhole is based on the PoA (Proof of Authority) mechanism, consisting of a group of trusted entities known as Guardians. These Guardians are not randomly selected but are well-known entities with capital and reputational backing. Currently, the Wormhole Guardian network consists of 19 members, including well-known companies such as Chorus One, Everstake, Figment, and xLabs.

How It Works

The workflow of Wormhole is both simple and efficient, with its core being a cross-chain message format known as VAA (Verifiable Action Approval). On each chain supported by Wormhole, a set of specific contracts, called Wormhole Core Contracts, is deployed. These contracts are responsible for converting cross-chain requests from applications into VAAs.

When a cross-chain request is processed into a VAA, the 19 Guardians will listen for these newly generated VAAs. Each Guardian independently signs the VAA, and these signatures will ultimately be combined into a multi-signature. To ensure the authenticity and security of the message, at least 2/3 of the Guardians must sign off on the VAA.

Next, a role known as Relayer is responsible for relaying these signed VAAs to the target chain. When the Wormhole Core Contract on the target chain receives these signed VAAs, it verifies the signatures and passes the message to the target application.

It is important to note that Relayers incur gas fees when relaying VAAs. These fees include the cost of submitting the message to the Wormhole Core Contract and the cost of executing that message in the target application. Relayers will cover these costs. Wormhole does not set up public Relayers, so each application needs to design its own incentive mechanism for Relayers or run its own Relayers.

This is the working principle of Wormhole. In summary, Wormhole provides a secure and efficient bridge for cross-chain communication through its unique organizational structure and workflow, ensuring seamless interoperability between various blockchains.

Part 3 Core Products and Use Cases of Wormhole

As a frontier explorer of cross-chain communication, Wormhole offers a range of powerful products for developers and users, including Messaging, Connect, and Gateway, which involve protocol, frontend (application), and chain level. These products aim to simplify cross-chain interactions while ensuring the highest levels of security and efficiency.

Messaging

In a diverse blockchain ecosystem, messaging has become a core requirement. Wormhole's Messaging product provides a decentralized solution that allows different blockchain networks to securely and easily exchange information and value.

The core function of Messaging is cross-chain information transmission, equipped with a simplified integration method to accelerate user and liquidity growth while maintaining high security and decentralization.

For example, suppose a DeFi project operates on Ethereum but wishes to interact with another project on Solana. Through Wormhole's Messaging, these two projects can easily exchange information and value without complex intermediary steps or third-party intervention.

Connect

Wormhole's Connect product provides applications with a simple bridging tool that allows integration of the Wormhole protocol for cross-chain functionality with just a few lines of code.

The main function of Connect is to provide developers with a set of simplified integration tools, allowing them to integrate Wormhole's encapsulation and native asset bridging features into their own applications with just a few lines of code.

(You can visit the Wormhole official website's Connect page to view a short video demonstration)

For instance, an NFT marketplace wants to bridge its NFTs from Ethereum to Solana. Using Connect, this marketplace can provide its users with a simple and fast bridging tool within its application, allowing them to freely move their NFTs between the two chains.

Gateway

Wormhole Gateway is an application-specific blockchain supported by the Cosmos SDK. Through an IBC-based liquidity router, Gateway connects liquidity and users from Ethereum and other blockchains to Cosmos chains and applications, providing a bridging method for non-native assets to enter the Cosmos ecosystem. It utilizes the flexibility of Cosmos SDK and CosmWasm to achieve seamless compatibility between the Wormhole Stack and the Cosmos ecosystem, ultimately benefiting Cosmos-based chains and applications in terms of liquidity and user growth.

For example, a DeFi platform on Cosmos wants to attract liquidity from Ethereum. By using Gateway, this platform can easily access liquidity on Ethereum while ensuring the security and efficiency of transactions.

Part 4 Overview of the Wormhole Ecosystem

A strong ecosystem in Web3 is one of the key factors for a project's success. As a cross-chain communication infrastructure, Wormhole has established a robust ecosystem composed of numerous partners, projects, and funding programs.

The Wormhole ecosystem is mainly divided into three parts: Guardians, connected public chain partners, and other partners. The Guardians have been introduced earlier, so we will not elaborate on them here.

• Connected public chain partners: As of now, Wormhole supports the transmission of any messages between 25+ heterogeneous public chains, including Solana, Ethereum, BNB Chain, Polygon, Avalanche, Arbitrum, Optimism, Base, Aptos, Sui, Sei, Injective, Algorand, Moonbeam, Near, Oasis, Aurora, Fantom, Karura, Acala, Klaytn, and Celo, among others.
• Other partners: These partners include various applications built on Wormhole (Bridge, DEX, Aggregator, etc.), projects that conduct cross-chain governance through Wormhole, projects that integrate Wormhole Connect products, and projects that support xAsset, such as Uniswap, Lido, Frax, Hashflow, Carrier, Degods, Y00ts, etc.

In addition, Wormhole is actively expanding cooperation with other cross-chain protocols, such as establishing a partnership with Circle CCTP.

At the same time, Wormhole has launched multiple funding programs, including the Cross-Chain Ecosystem Fund, xGrant program, and Wormhole Base Camp Accelerator, aimed at promoting the growth and innovation of the ecosystem.

Thus, the Wormhole ecosystem is not only a reflection of its technology but also a combination of its vision, partnerships, and community involvement. This ecosystem ensures Wormhole's leadership in the field of cross-chain communication and lays a solid foundation for future growth and innovation.

Part 5 Advantages of Wormhole

From the above, we can see that Wormhole's messaging mechanism, while simple, is highly efficient. In addition, its status as a pioneer in cross-chain communication and its rich ecosystem and wide range of use cases are also attributed to the following advantages:

1. Decentralization

Decentralization is the core philosophy of Wormhole. Wormhole achieves true decentralization through its Guardian network, which ensures that there is no single point of failure, enhancing the security and reliability of the network. Furthermore, compared to solutions that use adversarial relayers, Wormhole's collusion threshold is much higher than 1 or 2, further enhancing its decentralization characteristics.

2. Modular Design

Wormhole's design emphasizes modularity, allowing various components in the ecosystem (such as oracles, relayers, applications, etc.) to be designed, modified, and upgraded independently of other parts. This modular approach ensures the flexibility and stability of the system, making it more capable of quickly adjusting and adapting to future development trends.

3. Support for Bridging Non-EVM Compatible and EVM Compatible Chains

Wormhole is one of the few messaging solutions capable of connecting non-EVM compatible chains (such as Solana, Aptos, Sui, Algorand, etc.) with EVM compatible chains (such as Ethereum, BNB Chain, Polygon, etc.). This broad chain support ensures Wormhole's wide applicability, interoperability, and excellent scalability, currently supporting communication across 25+ chains.

4. Strong and Upgradable Trust Network

Wormhole's trust layer is built using the PoA mechanism, with a group of trusted Guardians responsible for verifying inter-chain messages, and these Guardians are well-known entities with strong capital and reputational backing, ensuring the authenticity and security of cross-chain messages. Additionally, Wormhole's design allows for upgrades and modifications without disrupting existing integrations. For example, over time, the Guardian Set can be expanded beyond 19 through threshold signatures, ensuring its long-term sustainability and adaptability.

5. Seamless User Experience

Wormhole provides a simple and efficient cross-chain interaction experience. Currently, Wormhole does not charge any fees for asset cross-chain transactions (users need to pay the necessary gas fees). On the other hand, Connect allows many applications to easily integrate Wormhole into their DApps without developers needing to pay any fees, greatly simplifying the interaction process.

In summary, Wormhole provides an efficient, secure, and economical solution for cross-chain communication through its technological innovation, strong and upgradable trust network, and seamless user experience.

Part 6 Conclusion

As we have mentioned multiple times, with the rise of various blockchain platforms (L1 & L2 & Rollup), ensuring that these independent networks can communicate seamlessly and securely has become an urgent issue that needs to be addressed. This is why we need a solution like Wormhole.

Wormhole is not just a technical solution; it represents a vision, a future of cross-chain communication where various blockchain platforms can freely and securely exchange information and value. Through its unique design, powerful Guardian network, and extensive chain support, Wormhole has established its leadership in the cross-chain field.

But this is just the beginning. The Wormhole ecosystem and community are continuously evolving and innovating to achieve a truly decentralized and interoperable future. Therefore, whether you are a developer, researcher, or ordinary user, we hope you will join us in exploring and participating in the Wormhole ecosystem and community, injecting more vitality into the realization of this vision.