Before Wormhole, a number of attacks also occurred on some bridges such as Poly Network (blockchain interoperability was exploited for more than 600 million USD) and Qubit Finance (lending protocol supporting the bridge between BSC and Ethereum was hacked for more than 80 million USD). . One thing these attacks have in common is that they are all related to cross-chain and show that this technology has some limitations and disadvantages. So why can Wormhole still maintain its position today? Let's learn more in the analysis below.
1. Ideas
What is a cross-chain bridge?
Cross-chain bridge is a bridge that helps transfer crypto assets, tokens or data between different blockchains, including layer 1, layer 2 and sidechain. Cross-chain bridge uses lock and mint mechanism. When a user wants to transfer an asset from chain A to chain B. That asset will be locked at the bridge and at the same time mint a similar wrap asset on the destination chain. When the user wants to transfer assets back to chain A, the wrapped assets will be burned. Therefore, the bridge is also a place to store a large amount of assets, leading to it becoming a special point of attention for hacks and attacks.
What is a wormhole?
Wormhole is a cross-chain bridge that allows the transfer of assets from one blockchain to another. Currently, the project is supporting connections between chains including Ethereum, Solana, BSC, Polygon, Avalanche, Algorand, Fantom, Karura, Celo, Acala, Aptos and Arbitrum.
Mechanism of action
Wormhole's operating mechanism is the same as that of regular cross-chain bridges. Specifically:
When users want to transfer assets from chain A to chain B, they will deposit tokens from chain A into Wormhole.
After receiving the asset, Wormhole will mint a wrapped copy of that token on chain B and the number of tokens on chain A will be locked.
When users want to withdraw assets, they send the wrapped token back to the Wormhole.
Those tokens will be burned and Wormhole will unlock tokens on chain A for users.
Through this mechanism, transferring assets between blockchains becomes easier. In general, the number of wTokens created in chain B must be guaranteed in value with the number of tokens locked in chain A. However, hackers have taken advantage of vulnerabilities to mint wTokens in chain B without being guaranteed by any any type of asset in chain B and then liquidated. Since then, damage to the project has amounted to more than 320 million USD. After this incident, Jump Crypto accepted to spend 120,000 ETH to save the project and Wormhole organized a bug bounty immediately afterwards and continues to develop the project until now.
2. Products
Portal Token Bridge
Portal Token Bridge is a cross-chain bridge built and developed by the Wormhole protocol, allowing users to transfer tokens between different chains. The mechanism used is Wormhole's lock&mint mechanism explained above. Currently, this bridge is supporting 22 different blockchains: Acala, Algorand, Aptos, Arbitrum, Aurora, Avalanche, Binance Smart Chain, Celo, Ethereum , Fantom, Injective, Karura, Klaytn, Moonbeam, Near, Oasis, Polygon, Terra and Terra Classic, XPLA.
Portal has transferred nearly 36 billion USD in assets between 19 chains. Among them, the most active networks are Solana, Ethereum and BNB Chain.
Portal NFT Bridge
Portal NFT Bridge allows transfer of NFTs between different blockchains. Currently supporting exchange between 16 blockchains including Acala, Aptos, Arbitrum, Aurora, Avalanche, BSC, Celo, Ethereum, Fantom, Karura, Klaytn, Moonbeam, Oasis, Optimism, Polygon and Solana.
Carrier
Carrier is a cross-chain bridge for tokens and NFTs developed by Automata Network, built on the Wormhole platform. Carrier uses a zero-tracking mechanism to prevent cross-chain data and metadata storage operations. to enhance user security. Currently supporting 12 blockchains including Acala, Arbitrum, Avalanche, BSC, Celo, Ethereum, Fantom, Klaytn, Moonbeam, Oasis, Polygon and Solana.
3. Team member
Currently, project members are anonymous.
4. Investors and partners
In 2022, Wormhole will undergo a Seed round capital call with an unannounced amount of money. This capital call round had the participation of a number of investment funds such as Arrington Capital, Everstake Capital,... Also that year, Jump Capital also participated in supporting more than 300 million USD for Wormhole to save the project from crisis.
5. Ecosystem
The Wormhole ecosystem is increasingly expanding with the participation of projects integrated in the 22 blockchains that Wormhole supports. Some famous names like Circle, Aptos, Optimism, Acala,...
