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- 1 $50 million in funds raised by Borderless Capital and other venture firms to help startups with Wormhole.
- 2 The fund will help to create better applications that will attract users
- 3 The fund will aim at improving individual ecosystems
On May 18, it was announced that to help startups that use Wormhole for cross-chain messaging protocol a $50 million fund has been launched.
The $50 million fund that has been launched will be managed by Borderless Capital, a venture capital fund. It also includes 20 such venture capital funds and blockchain development teams. Some of the names are Circle, Polygon Ventures, Solana Foundation, Jump Crypto, and others.
First, let’s try to understand what a Wormhole is
A brief on Wormhole and how it fixes the problem
Wormhole is decentralized in nature and connects multiple blockchains helping them send and receive messages. It acts as a communication platform between different blockchains like Ethereum, Binance Smart Chain, Terra, Solana, Polygon, Avalanche, and Oasis. Wormhole addresses two of the biggest problems present in blockchains today:
To move a token between different blockchains is very tough without the help of a centralized exchange which helps in bridging and swapping tokens. This opens up the users to counterparty risk.
There is a lack of communication between Decentralized apps and smart contracts on different blockchains. The lack of communication makes interoperability difficult to achieve between chains.
Wormhole solves these problems by monitoring the message emitted by smart contracts on different chains. The process is achievable with the help of the Wormhole core layer.
The wormhole core is a core contract that, when deployed on each chain, can route the emitted message to the target chain. This is the core function of the message-passing protocol, Wormhole. Wormhole is secured by a guardian network that consists of 19 nodes.
What is the fund and how will it help?
According to the application page on the Wormhole website, the $50 million fund will help startups that are involved in creating infrastructure and tools for multiple ecosystems and developing cutting-edge apps. The website also describes the fund as “anti-max”. It promotes the idea of users requiring more than one blockchain to solve users’ problems.
CEO and managing partner of Borderless Capital, David Garcia noted that the fund will help attract users by creating new applications and help the Web3 economy grow.
Gracia further added that their motive is to make these startups realize their full potential and make way for blockchain applications. The fund wants to empower builders to exceed the limitations of their individual ecosystems.
Other Cross-chain messaging platforms such as Wormhole include LayerZero, Celer, deBridge, and many more.
Wormhole, because of its technology and platform, has expanded its network in the past few months. Recently in January, Uniswap chose Wormhole as its official bridging protocol. Wormhole will work as the cross-chain governance between Ethereum and BNB network.
On April 26, Wormhole had another breakthrough when it was integrated with Circle’s Cross-Chain transfer protocol. Wormhole will allow transfers from Ethereum to Avalanche for simpler transfer of USD Coin USDC.
Every good thing has its pros and cons, and so does Wormhole. In February 2022, the Solana bridge was hacked, leading to $321 million in losses. Although developers patched the faulty note and reimbursed it, it landed Wormhole in a controversy over its security.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
