An Essential Guide to Wormhole Gateway and the Portal Token Bridge [UPDATED]

As we journey deeper into the fascinating universe of blockchain technology, we encounter a pressing need for cross-chain communication. Imagine if different blockchain ecosystems could talk to each other, exchange information, and transfer assets seamlessly. Sounds ideal, right? 

That’s precisely what Wormhole, a cutting-edge protocol, is designed to do. Wormhole has revolutionized the way we view cross-chain communication, and now, with the introduction of Wormhole Gateway, things have taken a significant leap.

What Exactly is Wormhole?

Wormhole is a decentralized protocol that paves the way for users to securely and efficiently move tokens across Ethereum, Solana, and 21 other blockchain networks. 

But Wormhole doesn’t stop at mere token transfer. It extends its capabilities to support the transfer of unique digital assets like NFTs (Non-Fungible Tokens) and DAOs (Decentralized Autonomous Organizations) across chains. 

What Makes Wormhole Unique

At the heart of Wormhole’s appeal is its ability to facilitate cross-chain communication. Wormhole is like a universal translator, enabling these diverse blockchain ‘islands’ to communicate with each other seamlessly.

But how does Wormhole achieve this? It’s all down to a network of guardians, vigilantly observing and validating messages from the Wormhole Core Contract on each supported chain. This creates Verifiable Action Approvals (VAAs) – basically, signed testimonials of an observed message from the core contract.

Wormhole’s infrastructure has another unique ingredient: ‘Relayers.’ Operating off-chain, these processes amplify cross-chain communication by passing VAAs to the intended chain.

In the spirit of a truly decentralized network, Wormhole establishes a solid framework for governance. This allows for upgrades to the Core Contract and even the selection of Guardians through a democratic voting process.

Wormhole Queries Launch for Cross-Chain Apps

Wormhole Queries is a new app development mechanism that introduces a ‘pull’ mechanism, reducing latency and cost for cross-chain data access. It offers sub-1 second latency and up to 84% gas fee reduction.

Currently, accessing chain state information on Ethereum requires deploying explicit contracts and executing costly transactions, which makes the process inefficient for on-demand cross-chain state calls.

Wormhole Queries is a decentralized data retrieval and attestation method that offers fast and cost-effective cross-chain data access. It is supported by 19 decentralized full nodes, and the initial launch is focused on contract calls to Wormhole-connected EVM chains.

How Does Wormhole Queries Work?

Integrators can submit query requests to the Wormhole Guardian network and receive successful results to verify and consume data on-chain.

Where Can Wormhole Queries Be Used?

Wormhole Queries opens up new possibilities for blockchain developers. Let’s further review some use cases:

• DeFi

• Gaming

• Identity

Cross-Chain Price Feeds for DeFi

Wormhole Queries offers real-time cross-chain price feeds for DeFi platforms. It provides up-to-date price information from various blockchains, which is important for functions like collateralization, loan issuance, and AMMs.

With Queries, DeFi platforms can obtain the current Uniswap ETH/USDC price on Ethereum via the Wormhole Guardian network.

Cross-Chain Asset Verification for Games

Gamers can use blockchain to prove ownership of assets, such as NFTs or in-game tokens, and use them in different games without manual movement.

Games can use real-time blockchain data to create dynamic game mechanics. For instance, they can adjust their in-game economy based on real-time crypto values or NFT trades across various blockchains.

Developers can now create interactive cross-chain gaming experiences faster and cheaper than before, with improved cross-chain data retrieval. This includes multi-chain quests, cross-chain leaderboards, and global events that offer a unified Web2-like experience.

Unified Cross-Chain Digital Identity

Wormhole Queries enables a unified identity system to address the challenge of fragmented digital identities across different networks. Verified identity and credentials on one blockchain can seamlessly be used on another, eliminating redundant data calls.

For example, a user’s Degen score on Ethereum can be used by a lending platform on Binance Smart Chain, enhancing user experience and enabling cross-chain integration.

Wormhole Gateway: Bridging the Gap to the Cosmos Ecosystem

The ambition of bridging blockchains and enabling seamless transfers has found another milestone. Previously discussed was the architecture and function of Wormhole, which has connected multiple chains to allow for a free flow of information and value. Now, a new evolution has emerged – Wormhole Gateway. Unveiled at Osmocon, Wormhole Foundation has taken a significant step forward with this application-specific blockchain, crafted using the robust Cosmos SDK.

About Gateway

Gateway isn’t just another addition; it holds a prominent purpose. It aspires to widen access and pour liquidity into the Cosmos ecosystem, enhancing Wormhole’s security and sovereignty. A significant element of Gateway is allowing all 23+ connected blockchains spanning six runtimes to link with Cosmos through one uncomplicated IBC integration. The most enticing factor for users? They can now bridge funds to any Cosmos appchain without worrying about extra bridging charges.

How does Gateway function?

Bridging with Gateway from non-Cosmos chains to Cosmos might sound intricate, but it’s designed with clarity and precision. Gateway, while being complimentary to IBC, aims at providing undivided liquidity throughout the Cosmos chains. The process ensures heightened transparency and fortified transaction security, all on Gateway’s transparent public ledger. In action, once an entity decides to bridge a token to any Cosmos chain through Gateway, this asset gets locked. Following this, a fresh ICS-20 is minted on Gateway and is subsequently dispatched to the destination chain using IBC. The newly minted ICS-20 asset can then be fungibly handled through Strangelove’s packet forward middleware. Another feature to note is Gateway’s utilization of IBC Hooks, ensuring smooth integration with CosmWasm contracts.

Who can utilize Gateway?

Gateway was created keeping two primary users in mind. The first is the Cosmos developers eager to onboard users and infuse liquidity from thriving ecosystems like Ethereum and Solana. The second is users intending to bridge their assets to or away from Cosmos. The beauty of Gateway is that anyone can utilize it to transfer bridge assets that are interchangeable across Cosmos chains. Interestingly, Gateway won’t have a front end, ensuring users will leverage the technology discreetly in the background during cross-chain transfers.

Wormhole and Osmosis: A Joint Venture

It’s worth mentioning that one of the foremost appchains to integrate with Wormhole Gateway will be Osmosis. Recognized for leading in the Cosmos ecosystem concerning IBC activity, volume, and fees generated, it stands tall in the broader DeFi landscape. This collaboration was highlighted at Osmocon, a community conference held in Paris by the Osmosis team.

“We’re thrilled to welcome Wormhole to the Cosmos and celebrate the launch of Gateway with our fellow Cosmonauts at Osmocon in Paris. Wormhole’s Gateway establishes a secure and pivotal bridge between Cosmos and 20+ other cryptocurrency networks, facilitating effortless cross-chain liquidity and message routing. This introduction is set to attract fresh liquidity and users into the Cosmos ecosystem, further establishing Osmosis as the central liquidity hub in Cosmos and enhancing all IBC-empowered chains.” — Sunny Aggarwal, Co-Founder, Osmosis Labs.

The Drive Behind Building Gateway on Cosmos

Several factors contributed to the inception of Gateway on Cosmos. Chiefly, the Cosmos SDK played a pivotal role due to its capability to elevate Wormhole’s transparency and sovereignty. The SDK also empowered Wormhole to harness IBC light clients, considered the gold standard in security. This also amplifies Wormhole’s potential to establish an uninterrupted flow of data and assets across blockchains.

Improving Transparency and Security

Two focal points were prioritized when evolving Wormhole – transparency and security. Gateway now stands as a sovereign validation layer for Wormhole messages. This adds another layer of security to Wormhole’s existing Guardian consensus mechanism, all on a verifiably open public ledger. The consistent growth and evolution of the Wormhole platform made improving the transparency of the Guardian consensus mechanism a priority. This was accomplished without compromising the said mechanism’s autonomous nature, making the use of Cosmos SDK for Gateway an obvious choice.

Light clients have always been the goal of security in bridging, and IBC is a gold standard. Using IBC to transport Wormhole messages allows Gateway to leverage IBC’s time-tested protocol while minimizing infrastructure overhead for the guardian network.

Additionally, the decision to build on Cosmos opened avenues for incorporating advanced security features like Global Accountant – a CosmWasm-based module designed to ensure that the fungibility of native and wrapped assets consistently remains in a 1:1 ratio. The Wormhole team is also keen on enhancing the security framework of the entire Cosmos ecosystem with features like Governor, a dedicated module tailored to limit cross-chain contagion during potential security breaches.

Using the Portal Token Bridge

The Portal Token Bridge, an integral component of the Wormhole ecosystem, facilitates the transfer of tokens from one blockchain to another. This might sound complex at first glance, but don’t worry — we’ll break it down. 

The process involves three key steps:

• Select Source Chain: First, we choose tokens from the original blockchain, also known as the ‘source chain.’

• Token Wrapping: Next, we wrap these tokens into a format that the destination blockchain, or the ‘target chain,’ can comprehend.

• Token Unwrapping: Finally, once they’ve safely arrived at the destination, we unwrap the tokens so they can be utilized on the target chain.

Let’s apply this to a practical example. Imagine you want to send SOL from Solana to Ethereum. Here’s how you’d use the Portal Token Bridge to make that happen:

Step 1: Pick Your Source Chain

The first step is to decide which blockchain you will use as your source. In this case, since you’re transferring SOL tokens, Solana would be your source blockchain.

Step 2: Set Up Your Source Blockchain Wallet

You need to set up your wallet for the source blockchain. Given that Solana is the source blockchain, you’d need to connect to your Solana wallet, which could be either Solflare, Torus, Phantom, or Exodus Wallet.

Step 3: Select the Token for Transfer

Click on Select a token. This will allow you to specify the type of token you wish to transfer from the source blockchain. In our case, the token will be SOL.

Note: Tokens listed under Featured markets have liquid markets on the target chain, while Other assets may not have known liquidity. You can still bridge these tokens, but they won’t have any utility on the target chain. For a detailed overview of liquid markets, refer to this insightful article.

Step 4: Pick the Token for Bridging

Specify the token you want to bridge. In our case, this is ETH. Next, specify the desired amount you want to bridge from Solana to Ethereum and click Next.

Step 5: Select Target Blockchain and Connect Your Wallet

At this point, you need to specify the target chain to which you want to bridge your tokens. Since you’re bridging SOL tokens to Ethereum, you’d select Ethereum as your destination blockchain. After choosing the target chd to link your Ethereum wallet, would typically be MetaMask for most users.

Step 6: Select the payment method for the target chain gas fee

In this step, you must decide how to pay the gas fee on the receiving blockchain. For this example, you’ll be using the manual payment method, which implies that the gas fee will be paid directly from your Ethereum wallet when the transaction is launched. Once you’ve selected, click Next to proceed to the following step.

Please note that eligible tokens may offer an automatic payment method where the relayer covers the target chain fees.

Step 7: Initiate Token Transfer

The next phase involves sending your tokens to the Wormhole token bridge. This action sets off the transfer process on the Solana network, and the system will await finalization. To start this, click on the Transfer button.

Step 8: Confirm the Transfer

A pop-up window will appear asking, ‘Are you sure?.’ Click Confirm to proceed with the transaction. Optionally, you can also click on the provided link within the pop-up window to check whether liquid markets are available for your particular token transfer.

Step 8: Validate the Transfer

A pop-up from your wallet will prompt you for confirmation. At this stage, click Approve to validate and initiate the token transfer. Wait for the transaction to be confirmed on the blockchain.

Step 9: Redeem Tokens

Click on Redeem to finalize the process and receive your tokens on the target blockchain. Click Confirm in the pop-up to claim the tokens.

Please note that sending tokens to Solana will require four wallet approvals.

Congratulations! You’ve successfully bridged your tokens!

Step 10: Add Tokens to Wallet

For EVM (Ethereum Virtual Machine) chains like Ethereum, click Add to Metamask. This will automatically add the bridged tokens to your Metamask wallet. If you happen to miss this step, you can manually add the token to your wallet later.

Swapping Wrapped Tokens to Native Tokens

If you’re transferring, for instance, SOL from Solana to Ethereum using the Wormhole bridge, you’ll receive a wrapped version of SOL on the Ethereum network (ETH-SOL). However, if you want to convert this into native ETH on Ethereum, you will need to use a swap platform compatible with Ethereum, e.g., Uniswap or Sushi.

For example, if you wanted to swap your wrapped SOL (ETH-SOL) to native ETH on Ethereum using Uniswap, you would navigate to the Uniswap interface, connect your wallet, select ETH-SOL as your input token and ETH as your output token, specify the amount you want to swap, then confirm the transaction.

Benefits of Using the Portal Token Bridge

The Portal Token Bridge is a key player in the dynamic blockchain sphere, underlining the growing importance of cross-chain interoperability in this sector. Let’s delve into the key advantages of this cross-chain protocol:

• Interoperability: At the core, the Portal Token Bridge paves the way for efficient token transfer between 23+ blockchain networks, such as Solana, Ethereum, Binance Smart Chain (BSC), Polygon, Aptos, Avalanche, and Arbitrum, among many others. This interoperability lets users tap into each blockchain network’s unique benefits, making the transfer of digital assets across platforms seamless and efficient.
• Low Transaction Fees: What sets the Portal Token Bridge apart from many other services is its lower-than-average transaction fees. That means you can move your digital assets around without breaking the bank.
• Security: The bridge operates under the watchful eyes of guardian nodes, managed by trusted staking service providers. They keep a close eye on the transactions, providing a secure and reliable service. By burning tokens on the sender’s chain and minting equivalent tokens on the receiver’s chain, they ensure the transfer process is secure and transparent.
• Access to a Wide Range of DeFi Services: With Portal, you can shift any ERC-20 DeFi token from Ethereum to other chains and explore the DeFi services on these alternative platforms. On the flip side, token holders on other chains can shift funds to Ethereum and dive into its broad spectrum of DeFi applications.
• High Volume Capacity: As of early 2022, the Portal Token Bridge was handling around 2,000 transfers per day on average, boasting a Total Value Locked (TVL) of about $1 billion. This showcases its ability to manage a significant volume of traffic and funds securely and efficiently.
• Future-Proof: The Portal Token Bridge is all set for future expansion. With the rising significance of cross-chain interoperability in the blockchain space, its growth potential is immense. The chains that Portal supports represent nearly 90% of the entire DeFi industry TVL. This cements its position as a key player in the blockchain ecosystem.

How Wormhole Works

The Wormhole protocol isn’t just a concept; it’s a well-orchestrated system with distinct components working harmoniously to facilitate cross-chain communication. This section will dissect the inner workings of Wormhole, from its on-chain components to its off-chain mechanisms. 

The On-Chain Components

Your tokens begin their inter-chain journey with the “Emitter,” a contract that triggers the Core Contract. The Core Contract records the event in the Transaction Logs, marking your tokens’ travels.

Several existing contracts can act as Emitters, including:

• xAsset Contracts: They convert your tokens into xAssets, enabling their transfer across blockchains via the Wormhole.
• Relay Contracts: They ensure messages from one blockchain reach another effectively.
• Worm Router Contracts: They allow Dapps to become cross-chain applications, broadening their user base.

The Off-Chain Components

While the on-chain components get your tokens moving, the off-chain components ensure the process is secure and verifiable.

The Guardian Network 

The Guardian Network is like the backbone of the Wormhole protocol. Its job is to keep an eye on and validate the messages created by the Core Contract across various blockchains. They create a Verifiable Action Approval (VAA), certifying the message’s authenticity.

• Guardians: These validators contribute to VAAs’ signatures, ensuring only a majority can validate a transaction and enhancing the protocol’s security.
• Spies: They forward network traffic and ensure efficient distribution of VAAs across the network.

The Role of Wormhole Core Contract

The Core Contract initiates messages, tracks them, and writes them to the Transaction Logs for the Guardians to validate. It ensures cross-chain communication remains secure.

Relayers

Relayers ensure VAAs reach their target chain.

• Specialized Relayers: Handle VAAs for a specific protocol or application, leading to lower gas costs and improved cross-chain compatibility.
• Generic Relayers: Part of a decentralized network that delivers any message requested on-chain, offering a more flexible service.

Your Tokens’ Journey Across Chains

With these components in place, the Wormhole protocol ensures that your tokens can safely traverse different blockchain networks. 

• Step 1 – Emission: The journey starts with the Emitter, who kicks off the process.

• Step 2 – Validation: The Guardians step in next, ensuring everything’s in order.

• Step 3 – Delivery: The Relayers then transport your tokens to the destination blockchain.

Each action is documented and checked, guaranteeing a secure and efficient mechanism for cross-chain transfers. 

But what’s in it for you?

Advantages and Disadvantages of Wormhole

Benefits of Wormhole

• Cross-chain Interoperability: Imagine moving assets between different blockchains like Ethereum and Solana. Wormhole makes this possible, unlocking a world of potential for decentralized finance and other applications. This interoperability is a major plus in a world where many diverse blockchains are carving out their unique ecosystems.
• Community Power: At its heart, Wormhole is community-driven. Its design includes a voting system that lets the community elect Guardians and greenlight upgrades to the Core Contract. This democratic approach ensures transparency and keeps the community at the helm.
• Super Efficiency: Wormhole’s use of a Guardian and Relayer network manages cross-chain transactions effectively. This means fewer gas fees and quicker transaction times, a win-win compared to direct transactions between the blockchains.
• Flex for Devs: Wormhole’s design allows developers to tailor and optimize their DApps for cross-chain action. This adaptability opens the doors for innovation and the development of new applications.
• Safety First: Wormhole employs a multisig system for its Guardians, enhancing the security of cross-chain transfers. Plus, each cross-chain transaction involves a signed attestation (Verifiable Action Approval), ensuring that messages passed across chains are legit.
• Future-ready: Wormhole’s design makes it scalable, meaning it can grow as the number of supported blockchains and transactions increases. This forward-thinking approach makes it a sustainable solution for cross-chain communication, all set to keep up with the ever-evolving blockchain ecosystem.
• Enabling Value Flow Across Chains: Wormhole’s distinct interoperability platform facilitates the unobstructed flow of value across blockchains. Cosmos, in its essence, is designed around this core principle. Gateway was thus conceived to serve as an advanced, secure, and cost-efficient pathway to the Cosmos ecosystem compared to existing solutions. This move is in line with Wormhole and Cosmos’ collective vision of effortlessly bridging Cosmos chains with other blockchain ecosystems.

Potential Disadvantages

• Complexity: Moving assets from one chain to another involves several steps and requires using additional platforms for swapping assets. This might be difficult for less experienced users.
• Costs: There might be transaction costs associated with moving assets from one blockchain to another and swapping assets on the platforms.
• Dependence on validators: The operation of the Wormhole protocol depends on the Guardian Network, which could potentially be a point of vulnerability.

Risks and Challenges of Wormhole

• Smart Contract Bugs or Exploits: Like any platform based on smart contracts, Wormhole could potentially be vulnerable to bugs or exploits in the smart contract code. This could potentially lead to a loss of funds.
• Guardian Misbehavior: Wormhole’s operation relies on the guardians to validate transactions. If a majority of guardians were to act maliciously or be compromised, it could disrupt the operation of the bridge.
• Complexity of Use: The process of moving assets across chains using Wormhole involves multiple steps and requires the use of different interfaces. This complexity could lead to user error, potentially resulting in loss of funds.
• Reliance on External Platforms: When moving assets from one chain to another, users may have to use additional platforms (like Saber or Mercurial for swapping tokens), which come with their own risks.
• Cross-Chain Interoperability: As the blockchain ecosystem continues to evolve, maintaining compatibility and functionality across multiple chains could present ongoing challenges.
• Regulatory Risks: Cross-chain bridges operate in a complex and rapidly evolving regulatory environment. Changes in regulations could potentially impact the operation of Wormhole.

Wormholescan: A Comprehensive Tool for Wormhole Users

Wormholescan is a vital block explorer and analytics platform specifically designed for the Wormhole ecosystem. It addresses the need for effective tracking and visualization of cross-chain activities within Wormhole, known for linking over 25 blockchains across 6 runtimes. This tool provides a centralized, intuitive interface for users to effortlessly monitor the Wormhole network.

Features of Wormholescan

Here are some of the key features that Wormholescan offers. Each is designed to enhance your experience within the Wormhole ecosystem.

• Transaction Tracking and Visibility

Wormholescan enhances your view of transactions as they move across different blockchains. It offers advanced tracking features, giving you a fuller understanding of your transactions and activities within the Wormhole ecosystem.

• Developer Insights and Analytics

For developers and tech-savvy users, Wormholescan is a treasure trove of detailed information about Wormhole transaction flows. It helps with troubleshooting, optimizing interactions, and confirming the accuracy of transactions.

• Ecosystem Metrics and Analysis

The platform displays a variety of critical and interesting metrics about the Wormhole ecosystem. These include transfer metrics, details on cross-chain activities (like transactions and volume) for each blockchain, and information on popular chain pairs.

• User-Responsive Design

Wormholescan is constantly evolving, shaped by user feedback and needs. Our focus is on empowering users by providing them with essential information and functionalities that enhance their experience and meet their specific requirements.

Getting Started with Wormholescan

Wormholescan offers a range of functionalities to help you navigate and understand the activities within the Wormhole ecosystem. Here’s how you can begin exploring its capabilities:

• Search Functionality

Use the search feature to find detailed data related to specific transaction hashes (TxHash), addresses, or VAA IDs. This tool is essential for pinpointing exact transaction details or tracking specific activities within Wormhole.

• Vanity Metrics

Get an overview of Wormhole’s activities with aggregated statistics. This feature provides a snapshot of the overall activity, helping you understand the big picture of the ecosystem’s dynamics.

• Cross-Chain Activity Tracker

Monitor the movement of value across different blockchains within the Wormhole network. This tracker is instrumental in observing the flow of assets, identifying trends, and understanding the interconnectivity of various chains.

• Top Asset/Token Pairs

Discover the most popular assets or token pairs within Wormhole. This feature highlights trending assets and pairs, offering insights into the most active segments of the ecosystem.

The Big Picture

Wormhole is definitely a leap forward in the journey towards blockchain interoperability. It makes cross-chain communication—which used to be quite tricky—more achievable. The unveiling of the Wormhole Gateway marks a defining moment in the realm of cross-chain communication and blockchain technology. With its emphasis on bolstering security, and transparency and offering seamless interactions, the Gateway serves as a testament to the evolving nature of the decentralized space. 

Tailored specifically for the Cosmos ecosystem, it promises enhanced liquidity, interoperability, and reduced costs, thus amplifying the benefits for both developers and users alike. 

Given the strides the Wormhole Foundation has already made, the Gateway not only stands as a technological achievement but also as a beacon for what the future holds for interconnected blockchain systems. As the decentralized world moves forward, tools like these will undoubtedly shape the way we understand, interact with, and leverage the power of blockchains.

Looking at the bigger picture, as the blockchain ecosystem keeps expanding and diversifying, solutions like Wormhole will become increasingly important. They will dismantle the barriers between different blockchain ecosystems, encouraging an atmosphere of increased cooperation, innovation, and growth. The future of blockchain could well be cross-chain, and Wormhole seems to be leading the charge.