The term wormhole refers to space holes that connect two points in space. The question is, what is the relationship between this spatial concept and the world of digital currencies? Decentralized applications (dApps)? It is interesting to know that the Wormhole protocol in the DeFi world does exactly this. This protocol, as a blockchain bridge, connects two or more blockchains such as Ethereum and Solana. The wormhole interchain protocol is a very attractive and creative concept and has attracted the attention of many analysts. In this article, we have tried to carefully look at all the angles of this network and examine its advantages and disadvantages.
What is meant by Wormhole protocol?
Wormhole network is actually a very useful decentralized protocol that solves the problem of lack of communication between blockchains. Until now, digital currency users were limited to transfer assets from one blockchain like Ethereum to another blockchain like Solana. For this, they have to first convert ether (Eth) to Solana (SOL) and then use DeFi projects based on the Solana blockchain network. This process is time-consuming and tedious! Even users who are on the Ethereum blockchain; They can only work with tokens based on the Erc-20 standard or Ether currency (ETH). This limitation is observed in all blockchains.
Wormhole protocol was created to solve exactly this problem. WormHell, in fact, provides a suitable platform for transferring liquidity between networks. This protocol is a smart contract that uses Cross-Chain Bridge technology. With this technology, users on the Ethereum network can use DeFi projects based on the Solana blockchain without the need to sell ether. Among the blockchains that the Wormhole protocol bridges, the following can be mentioned:
- Solana
- Ethereum
- Binance Smart Chain
- Polygon
- Terra
- Avalanche
- Oasis
How does Wormhole connect blockchains?
To get to know how cardamom worm works, we must first look at the important role the nineties Let’s point out (Nodes). Wormhole protocol uses authentication nodes or guardians to communicate between blockchains; but how? In fact, these nodes act as guards and check any activity on blockchains with the aim of ensuring their security; Therefore, this group is responsible for managing Worm Hell’s smart contract. It is interesting to know that the nodes include well-known teams from the largest financial platforms in the world.
Let’s explore together how the wormhole protocol works. Suppose a user intends to transfer a part of his ether assets from the Ethereum network to the Solana blockchain in order to use some of the DeFi projects of that network. To do this, he first issues a request to the Wormhole smart contract. In the next step, this request is evaluated by the nodes. They vote to approve this request and if the votes reach the quorum, the request is approved. After that, the Ether currency is locked in the Ethereum network and its equivalent in the Solana network, the SOL token, is created. In short, a process in the Worm Cardamom ecosystem includes the following steps:
1. Send the request to the wormhole ecosystem.
2. Guardian nodes carefully review the request in the form of a transaction.
3. After a few seconds, the voting between the nodes is finished and the process is approved or rejected.
4. If approved, the request will be publicly displayed.
5. The token asset is locked in the origin blockchain.
6. The target digital currency is created in the blockchain.
What is the importance of nodes in Wormhole security?
Nodes in order to secure the transactions in the Hel Worm from the process Multiple signatures use. For this, after the request is issued by the user, the voting is started and all nodes vote within a few seconds. Signing the request by all nodes prevents possible abuse of one of the nodes. When the votes are reached, the request is approved and sent to the destination network.
It is interesting to know that Guardians usually use the Solana network to perform this process; Because the cost of doing transactions in this network is low and the speed of transactions is also high. For this reason, nodes register user requests in the form of a transaction in the Solana network. To such requests in the Solana network, Vaa Called.
What are the advantages of Wormhole protocol?
Why is the Wormhole Protocol so important to cryptocurrency investors? In this section, we are going to talk about the advantages of the wormhole network. Familiarity with these benefits will help us understand the importance of Worm Hel in the world of DeFi.
Access to a multitude of DeFi protocols
Wormhole Network, helps users to use without using Focused programs, benefit from the services of a large number of blockchains and DeFi protocols. For example, you can easily transfer tokens based on the Erc-20 standard from Ethereum to other blockchains. This feature is especially for users who have a high rate Gus (Gas) complains on the Ethereum network, it is very useful. They can take refuge in other blockchains from the high cost of each transaction in the Ethereum network with the help of wormhole.
Support for popular blockchains
The wormhole network is one of two very famous blockchains, viz Tera (Terra) and Solana (Solana) supports. These two networks are growing rapidly with the help of DiFi programs. Now, TVL or the total amount of the locked property They are increasing. Supporting these two blockchains makes Wormhole stand out from other blockchain bridges.
Suitable platform for transferring NFTs
This network is a suitable platform for transferring various NFTs between blockchains. This feature is not seen among other blockchain bridges; Therefore, it can be considered as a unique advantage.
Development of decentralized applications (DApps)
In addition to supporting decentralized applications (DApps), the Wormhole token bridge also enables the development of cross-chain decentralized applications. In the digital currency market, there are some decentralized applications that take advantage of the strengths of each blockchain. For example, an application might use the Solana network to verify transactions (due to the high cost of each transaction on the Ethereum network), and use the Ethereum blockchain for financial settlement. This process makes decentralized applications more intelligent and advanced.
Disadvantages of Wormhole network
Although the Wormhole protocol is valuable and noteworthy; But so far, there have been negative news about its security. For example, in 2022, the news of one of the biggest hacks in the history of digital currencies took the crypto world by storm. In this hack, more than 320 million dollars of assets were stolen during the exchange of digital currency between Ethereum and Solana blockchains. For this, hackers were able to steal 12 thousand Ether (Eth) in the destination blockchain (Wrapped Ether).
The main team of the Wormhole protocol announced in an email to the hackers that they are willing to reward them with $10 million; Provided that they return the stolen property. This request was not approved by the hackers. Following this incident, many analysts believe that the security of DeFi protocols has not yet reached an acceptable level for maintaining large assets.
However, the Wormhole Protocol team eventually injected the stolen asset into the network to maintain their credibility. Jump Kanav Kariya, head of one of Worm Hell’s sponsoring companies that replaced the stolen amount, said in an interview: “During these two weeks, he has aged as much as two years!”
What will be the future of this interesting project?
Wormhole protocol has a unique idea. Currently, in all fields of technology, interdisciplinary knowledge is very important. This idea is also followed in Wormhole protocol. Facilitating processes and transactions in the DeFi world is a goal that various projects pursue, but Worm Hell has been able to achieve it to a large extent. This project is definitely at the beginning and has a long way to go. Considering the powerful supporters and investors of this network, we can guess that a bright future awaits Worm Hel.
What is Wormhole Protocol? Introduction of Wormhole interchain protocol network for the first time in Wallex blog. appeared.
