Proof-of-stake blockchain Solana announced a trustless bridge connecting the platform with Ethereum’s chain.
With Ethereum’s blockchain so overloaded that transactions have cost $50 or more at times, proof-of-stake blockchain Solana is focusing on its scalability.
By creating a bridge to Ethereum, Solana’s Wormhole allows the transfer of Ether (ETH) and ERC-20 tokens on the Solana blockchain by connecting them with SLP tokens, and back. Developed in partnership with proof-of-stake blockchain firm Certus One, Wormhole is currently in its testnet phase. Solana Foundation CEO Anatoly Yakovenko commented:
“Smart contract chains are universal computers, and all universal computers can talk to each other, fundamentally making blockspace on any layer-1 fungible with blockspace on any other layer-1.”
That means DApp designers “need not encumber themselves to a single chain if they want to leverage the community of one chain with the performance of another,” according to a Solana blog post on Oct. 8.
Essentially, Wormhole allows DApp teams “to access the high-speed and low-cost benefits of the Solana network,” without rewriting their codebase for Solana. So for an Ethereum smart contract with locked value, bridging across to Solana allows the transaction to go through quickly and cheaply, but still settle back on the Ethereum chain.
Wormhole “allows existing projects, platforms, and communities to move tokenized assets seamlessly and trustlessly across blockchains,” according to Solana. “Interoperability remains a high priority for projects, as it unlocks network effects and allows for the most efficient use of resources.” The blog adds:
“It’s not pragmatic to expect an entire ecosystem of value to immediately shift across networks, and teams can’t afford to wait for such a mass migration.”
Focus on DeFi
The company claims that its Solana blockchain is preferable for decentralized application development since “emulates the scale, speed, and low-cost of the web.” The company also insists that the performance of decentralized applications is much more important than it is believed to be:
“The majority of DApps need to perform as well as, if not better than Web2 products.”
Solana pointed to the explosive growth of decentralized finance—or DeFi—which now has $10.4 billion in locked value. It said:
“DeFi has momentum and excitement on its side. It should be attracting even greater multiples of new capital, but congestion and high gas fees result in aborted trades or significant slippage, the types of issues that keep money on the sidelines.”
Specifically institutional money, Solana said.
“While early adopting retail speculators are content to throw caution to the wind, ‘institutional’ funds need to manage risk. Counterparty risk is mitigated thanks to the nature of DeFi (simultaneous delivery to both transacting parties) but if a fund can’t enter or exit a position due to execution risk (ability to process a trade), that’s often too great a cost.”
Solana is welcoming developers who want to experiment with Wormhole to participate in a hackathon, organized alongside cryptocurrency household names Gauntlet, Curve, FTX, Balancer, Aave, and Audius.