Posted on Feb 25, 2024Read on Mirror.xyz

An Idiot Explores Modularity, Week 3: Wormhole

Modularity is hot. I know it, you know it. But we don’t get it (or at least I don’t). Join me as I stumble and bumble my way to minimum viable understanding.

This week we’re discussing Wormholean “open source blockchain development platform connecting the decentralized web.” Ah yes, of course! That makes intuitive sense to me.

Matthew McConaughey go weeeeeeeeeeee

In my (moviegoing) experience a wormhole is a portal of sorts that turns interstellar travel up to 11. Where travel was once slow and incremental, a wormhole allows an intrepid adventurer to skip across space and time. Wormhole is much the same. Instead of skipping across the blackness of space one can bridge across the (blackness?) of blockchains; instead of transporting people or dehydrated food, one can transport tokens. Instead of…well just look at this table:

That was a dumb comparison; What does this actually do?

Glad you asked. Wormhole is a messaging protocol that allows applications to engage in a cross-chain fashion. What exactly is meant by “message” depends on the application. For instance, Pike is a borrow and lend application. While there are many such applications that operate within a single chain (e.g. marginfi on Solana; Nostra on Starknet), Pike allows users to deposit collateral on one chain and borrow against that collateral on a different chain. Wormhole is the communication channel through which Chain A and Chain B converse, such that Chain A can say to Chain B “Go ahead and allow that borrow on your chain, Jim has deposited collateral on mine.”

Of course there are many other things that Chain A and Chain B can talk about. They might discuss the trading of one token for another (e.g. cross-chain swaps at Hashflow), for instance, such that Jim can swap Eth on Chain A for USDC on Chain B. Then again maybe Chain A and Chain B are sick of talking about Jim and instead want to focus on their own relationship.

Start sending me this shit

Wormhole doesn’t just talk the talk, it also tokens the token (editor’s note: we’ll change this before you publish, right?). By that I mean that Wormhole allows users to bridge tokens across otherwise disconnected blockchain ecosystems. This means Solana can bridge to EVM chains (using e.g. Mayan Swap) and EVM chains can bridge to Cosmos chains (using e.g. Portal Bridge), among other permutations. In this way Wormhole allows for blockchain connections that increase flexibility and decrease liquidity fragmentation for users.

Zero Knowledge: That thing Wormhole and I have in common

Wormhole recently announced a partnership with AMD, which I thought was one of those movies-on-TV networks but is instead a semiconductor/computing company. The main takeaway I can gather from this partnership is that Wormhole wants to transition to zero-knowledge proof verification for its messaging (currently verified by a multisig), but it needs AMD’s horsepower to do that at scale. As an idiot that’s honestly as specific as I can be.

L8r sk8rs.