Popular crypto projects Algorand, Solana, and Polygon are teaming up to raise $50 million to invest in cross-chain blockchains. Other participants in the investment fund are Aptos Labs, Jump Crypto, Circle, and some other bigwigs. By working together for cross-chain interoperability, these investors declare their willingness to collude on cross-chain projects.
Borderless Capital is in charge of the Cross-Chain Ecosystem Investment Fund, launched on May 18. The fund will major on startups that utilize the Wormhole cross-chain messaging protocol.
Wormhole and other cross-chain messaging protocols envision a future where today’s fragmented blockchain ecosystem becomes more interconnected. However, the crypto bridges facilitating these connections have suffered persistent security problems. There have been substantial financial losses in the hundreds of millions of dollars caused by hackers.
In February 2022, an exploit affected the Ethereum-Solana bridge of the Wormhole protocol. This fraudulent activity resulted in the loss of approximately 120,000 wrapped ETH (wETH). However, the backers of Wormhole took responsibility and intervened promptly to replenish the stolen funds. Subsequently, the project’s venture capital firm proactively initiated a significant bug bounty program to mitigate the risk of future exploits.
In just a few months, the program demonstrated its immense value. Furthermore, in May, Wormhole recognized the white hat hacker Satya0x with a generous prize of 10 million USD for successfully exposing another critical vulnerability.
To establish itself as the preferred cross-chain messaging standard for blockchain developers, Wormhole must maintain a strong focus on security. This is particularly crucial given the growing competition posed by alternative solutions, like Chainlink’s Cross-Chain Interoperability Protocol (CCIP). The emergence of the new investment vehicle has ultimately motivated crypto developers to address the cross-chain security challenges Wormhole poses.
What is Wormhole?
The Wormhole protocol empowers Web3 applications as a cross-chain messaging protocol. It establishes connections between over 20 major blockchain networks, facilitating the integration of liquidity and users. This seamless integration enables many use cases, including DeFi, NFTs, gaming, and other applications.
Wormhole is hailed as a leading framework for interoperability. It has found extensive use by prominent entities, such as Circle and Uniswap, for seamlessly bridging tokens across blockchains.
A press release declares that the impressive 35 billion dollars worth of tokens has already been transferred through Wormhole. Moreover, the platform has fostered the development of various cross-chain applications.