A Developer's Intro to Warmhole and Product Ideas

A thread🧵

•What is Wormhole? It is a decentralized universal message passing protocol for blockchains.

Now lets break it into detailed segments of what role Wormhole plays in the d5 ecosystem. There are a bunch of  blockchains like Ethereum, Solana and Terra, where these chains all have huge amounts of value in their own  and lively ecosystems. However, they are fundamentally incapable of communicating with each other and that has led to a whole host of problems. The first problem you encounter is that:

▪︎ There's no straightforward way to move tokens between any two blockchains, and the primary way this has been overcome  is by using centralized bridges and centralized exchanges to move the assets for you and this isn't ideal because it effectively amounts to giving someone else your funds and then trusting that they'll do the right thing. However, it at least works, so as long as you accept that. And while moving funds is one thing, there's still a much more difficult problem, which is:

▪︎ That smart contracts and applications written on these blockchains also can't communicate with each other, and with the rise of d5 and the growing dominance of smart contracts and layer 2 applications, this has become an increasingly painful limitation, and this is where the Wormhole core layer comes in. The core layer is the backbone navigator of the entire wormhole ecosystem and it solves this fundamental communication problem, and it does so without centralization. The Wormhole core layer is actually quite simple, but it's also very powerful. It works by deploying a contract on each blockchain called the core contract, and other contracts can use this to send a message off chain or verify the authenticity of a message they received. However, the real power of the core layer is not in the core contract, but rather in its second component, the guardian network. The guardian network's responsibility is to observe and sign messages which are sent from each chain via the core contract. In total, there are 19 guardians in the guardian network, and each one of them observes every blockchain supported by Wormhole. A Wormhole message is not considered valid until two-thirds of the guardians have observed and signed it, and it is actually these signatures which the core contract is verifying when it assesses the authenticity of a message. As someone of an aside, it's quite difficult to run a guardian, as it requires observing every single blockchain supported by Wormhole, and as a result the 19 guardians were selected from a list of the beefiest and most reputable infrastructure providers and validators in the world. So if you compare the list of guardians to the list of top validators on wormhole supported blockchains, you'll see a lot of names in common. Moving on from the core layer, there is another major component to the wormhole ecosystem, and that is, of course, the token bridge. Now, because the Wormhole token bridge is quite popular, there is a widely held misconception that wormhole is only a token bridge, but as we've just discussed, that is obviously not the case. Now there was a version 1 token bridge, which launched in previous year. However, that has since been deprecated in favor of the version 2 wormhole token bridge, and version 2 is actually just a protocol built on top of the core layer to facilitate transferring tokens across chains in a manner which is composable with other core layer protocols. So, while the version 2 token bridge is built on top of the core layer, it is not considered part of the core layer. There are few  level points of the so called Token bridge.

The first is that because it's built on top of the core layer;

☆ It is as decentralized as the core layer. It's also the primary token bridge for Solana, and it is becoming the primary token bridge for Terra, as the shuttle bridge is being deprecated. It also has over 1 billion tvl, which is the total value of assets held by the bridge. This makes it one of the highest tvl bridges in any ecosystem and means that wormhole wrap tokens have a lot of liquidity in various markets.