07 Feb 2024•
6 min read
Web3 aims to foster an internet that is transparent, trustless, open, and secure. This vision relies on ecosystems being securely and seamlessly connected. To achieve this, the Web3 ecosystem needed a foundational messaging protocol that is secure, decentralized, trust-minimized, and open source. Over three years ago, Wormhole launched the first-ever generalized messaging protocol to first connect Ethereum and Solana. The protocol has since evolved into a fully fledged interoperability platform that connects Web3 and helps applications rapidly scale.
Today, Wormhole is the leading interoperability platform powering multichain applications and bridges at scale — the Web of Web3. The suite of open source protocols is used by developers of over 200 applications and hundreds of thousands of users to move various types of data across over 30 blockchains. In total, the platform has handled over 950 million multichain messages for applications and teams like Uniswap, Circle, Lido, Synthetix, Pyth, and more. In 2023, the Uniswap Foundation’s Bridge Assessment Committee conducted a third-party multi-month report that resulted in Wormhole being named the only unconditionally approved cross-chain protocol for use by the Uniswap DAO, based primarily on security and decentralization practices.
The Wormhole platform is being developed by a decentralized set of teams contributing to security, engineering, research, product development, ecosystem growth, and community. These teams include Wormhole Foundation, Wormhole Labs, and xLabs, as well as other contributors like Wormhole China, Superteam, Lurk (ZK engineering), Zpoken (ZK engineering), among others.
The Wormhole protocol is now further decentralizing. This post explores the tokenomics of Wormhole’s native token, W. It includes the Token Release Schedule, allocation to strategic stakeholders within the Wormhole network and ecosystem, as well as a description of its current and future utility. The token generation event (TGE), broad distribution, and usage of W is a crucial step in advancing Wormhole towards a decentralized and permissionless future.
If you’re new to Wormhole, you can learn more about the platform at the following links:
There are six strategic stakeholders in the Wormhole ecosystem.
5.1% - 510,000,000 W
Wormhole’s Guardian Network has been allocated 5.1% of the token supply. Guardian nodes provide the primary verification mechanism for any message passing through Wormhole. The Guardians operate full nodes for every blockchain connected to Wormhole and are critical to the overall security of the network. The Guardians have a strong reputation in the industry as a leading cross-chain security mechanism, with recognition from Uniswap’s Bridge Assessment leading to Wormhole being the only unconditionally approved interoperability protocol for Uniswap’s multichain governance.
None of the Guardian’s allocated token supply will be unlocked at the TGE and those W are subject to the Token Release Schedule.
17% - 1,700,000,000 W
The Community has been allocated 17% of the token supply. Wormhole wouldn’t be possible without a thriving community of supporters. 11% of this allocation will be unlocked at TGE and will be distributed during the initial phases of the TGE, including the TGE-related airdrop (and related activities). The snapshot for this airdrop has been taken before the publishing of this blog.
11% or 1,100,000,000 W will be unlocked at TGE with the remaining 6% unlocked four months after TGE, in accordance with the Token Release Schedule above.
12% - 1,200,000,000 W
The core contributors to Wormhole have been allocated 12% of the supply. This portion of the token supply was reserved for the decentralized set of core contributing organizations who have tirelessly focused on the security, engineering, product, infrastructure, growth, and operations of the Wormhole platform.
None of their W will be unlocked at TGE and such W will unlock in accordance with the Token Release Schedule.
31% - 3,100,000,000 W
The Ecosystem and Incubation category represents a portion of W previously allocated to strategic contributors to the broad Wormhole ecosystem, including community organizations, developer community growth initiatives, strategic contributors, and more.
5% or 500,000,000 W will be unlocked at TGE with the remaining 26.1% thereafter. The remaining locked W are subject to the Token Release Schedule.
11.6% - 1,160,000,000 W
11.6% of the supply has been reserved to allow strategic network participants to take a vested interest in the long-term success and stability of the network through private sales. These participants include strategic angels, builders, and technical partners, as well as long-duration funds with deep crypto expertise in network governance and scaling. Read more in the detailed announcement blog post.
Similar to the core contributors, none of the strategic participants’ tokens will be unlocked at TGE and are subject to the Token Release Schedule.
23.3% - 2,330,000,000 W
This portion of the token supply is dedicated to Wormhole Foundation’s reserves. This allocation aims to drive priority initiatives such as future interoperability research, providing grant funding to ecosystem teams through the Wormhole Foundation’s xGrant program, supporting the developer community, funding operational expenses, and other relevant programs. The Wormhole Foundation’s mandate is to effectively and strategically deploy these resources into the continued development of the network, gradually moving some foundation resources on-chain, and over time, work to transition authority over the network completely to the DAO.
2% of the Foundation’s Treasury will be unlocked at TGE, while the remaining 21.3% locked W will unlock linearly according to the Token Release Schedule.
Learn more about the Wormhole Foundation.
Fundamentally, a token-based governance system allows token holders to guide and impact the protocol's direction. Over time, Wormhole plans to progressively decentralize the protocol's governance to W holders. After the token generation and distribution events, on-chain governance will largely guide community programs and treasury-related activities. The exploration of what is possible in a multichain world has just begun. The goal of this governance launch is to empower and enable the Wormhole community to address these critical areas with the necessary resources and support.
However, over time, it is expected that the DAO will take more responsibility for many decisions and actions, including:
A detailed progressive decentralization roadmap will be developed with input from Wormhole Core Contributors and the community. This collaborative effort will ensure that the path toward decentralization is transparent, inclusive, and aligned with the community's insights and needs.
THIS IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO PURCHASE ANY W, AND IS NOT AN OFFERING, ADVERTISEMENT, SOLICITATION, CONFIRMATION, STATEMENT OR ANY FINANCIAL PROMOTION THAT CAN BE CONSTRUED AS AN INVITATION OR INDUCEMENT TO ENGAGE IN ANY INVESTMENT ACTIVITY OR SIMILAR. YOU SHOULD NOT RELY ON THE CONTENT HEREIN FOR ADVICE OF ANY KIND, INCLUDING LEGAL, INVESTMENT, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVICE, AND SUCH CONTENT IS NOT A SUBSTITUTE FOR ADVICE FROM A QUALIFIED PROFESSIONAL.
THIS DOCUMENT CONTAINS HYPOTHETICAL, FORWARD-LOOKING AND/OR PROJECTED FIGURES WHICH ARE NOT GUARANTEED AND ARE SUBJECT TO CHANGE; ACTUAL NUMBERS MAY VARY. WORMHOLE MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS, RELIABILITY, VALIDITY, OR ACCURACY OF THIS INFORMATION. THE CONTENT HEREIN IS NOT ERROR-FREE AND MAY CONTAIN INCORRECT INFORMATION. YOU AGREE AND ACKNOWLEDGE THAT ANY INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE. NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED FROM WORMHOLE FOUNDATION, WILL BE CONSTRUED TO CREATE ANY WARRANTY OR REPRESENTATION NOT EXPRESSLY MADE HEREIN. FOR ADDITIONAL INFORMATION, PLEASE REFER TO OUR TERMS OF SERVICE.
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