The goal of Web3 is to create a transparent, trustless, open, and secure Internet environment. The realization of this vision depends on an ecosystem that can connect securely and seamlessly. To achieve this goal, Web3 needs a secure, decentralized, trust-minimized, and open-source underlying messaging protocol. More than three years ago, Wormhole launched the first universal messaging protocol designed to connect Ethereum and Solana. Since then, the protocol has evolved into a comprehensive interoperability platform that connects Web3 and helps applications scale rapidly.
Today, Wormhole is the leading interoperability platform that powers large-scale multi-chain applications and bridges. Developers of more than 200 applications and hundreds of thousands of users use this open source protocol to move various types of data between more than 30 blockchains. Overall, the platform has processed more than 950 million multi-chain messages for applications and teams such as Uniswap, Circle, Lido, Synthetix, Pyth, etc.
The development of Wormhole
In 2023, the Bridge Evaluation Committee of the Uniswap Foundation conducted a months-long investigation and issued a third-party report. Ultimately, based on its security and decentralized practices, Wormhole was designated as the only unconditionally approved cross-chain protocol that can be used by Uniswap DAO. The Wormhole platform is developed by a group of decentralized teams responsible for security, engineering, research, product development, ecosystem growth, and community building. These teams include Wormhole Foundation, Wormhole Labs, xLabs, and other contributors such as Wormhole China, Superteam, Lurk (Zero-Knowledge Proof Engineering), and Zpoken (Zero-Knowledge Proof Engineering).
Token Economics of Wormhole's Native Token W
Wormhole is now further decentralized. This article explores the token economics of Wormhole's native token W, which includes the token release plan, the allocation to strategic stakeholders within the Wormhole network and ecosystem, and a description of its current and future utility. W’s Token Generation Event (TGE), widespread distribution, and usage are critical steps in moving Wormhole toward a decentralized and permissionless future.
Token Distribution and Release Schedule
Token Code: W
Max Supply: 10,000,000,000
Initial Circulating Supply: 1,800,000,000
Token Format: Native ERC20 and SPL (using Wormhole’s native token transfer standard)
Lockup: 82% of W tokens are initially locked, which will be unlocked over four years according to the token release schedule below.
Token Distribution
W will be distributed across the following six categories:
Guardian Nodes: 5.1% — 510,000,000 W
Community & Launch: 17% — 1.7 billion W
Core Contributors: 12% — 1.2 billion W
Ecosystem & Incubation: 31% — 3.1 billion W
Strategic Network Participants: 11.6% — 1.16 billion W
Foundation Treasury: 23.3% — 2.33 billion W W
Detailed Allocation Description
Guardian Nodes
The Guardian Network is allocated 5.1% of the token supply. Guardian nodes provide the primary validation mechanism for any message passing through Wormhole. Guardians run full nodes for every blockchain connected to Wormhole and are critical to the overall security of the network. Guardians have a strong reputation in the industry as leading cross-chain security mechanisms and have been recognized by the Uniswap Bridge Evaluation Committee, making Wormhole the only unconditionally approved interoperable protocol in Uniswap multi-chain governance. The Guardian allocated token supply will not be unlocked at the TGE, and these W tokens will be unlocked according to the token release schedule.
Community & Launch
The community is allocated 17% of the token supply. Wormhole would not be possible without a vibrant community of supporters. 11% of this allocation will be unlocked at the TGE and will be distributed during the initial phase of the TGE, including the airdrop (and related activities) associated with the TGE. The snapshot of this airdrop was completed before publishing this blog. According to the token release schedule above, 11% or 1.1 billion (1,100,000,000) W tokens will be unlocked at the TGE, and the remaining 6% will be unlocked four months after the TGE.
Core Contributors
Wormhole’s core contributors are allocated 12% of the supply. This portion of the token supply is reserved for decentralized core contribution organizations that work tirelessly on the security, engineering, product, infrastructure, growth, and operations of the Wormhole platform. Their W tokens will not be unlocked at the TGE, and these W will be unlocked according to the token release schedule.
Ecosystem & Incubation
The Ecosystem & Incubation category represents a portion of the W previously allocated to strategic contributors to Wormhole’s broad ecosystem, including community organizations, developer community growth programs, strategic contributors, etc. 5% or 500 million (500,000,000) W tokens will be unlocked at the TGE, and the remaining 26.1% will be locked and unlocked later. The remaining locked W tokens will follow the token release schedule.
Strategic Network Participants
11.6% of the supply is reserved to allow strategic network participants to generate investment 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-term funds with deep crypto expertise in network governance and scaling. Similar to Core Contributors, Strategic Participants’ tokens will not be unlocked at the TGE and will be unlocked according to the token release schedule.
Foundation Treasury
This portion of the token supply is dedicated to the Wormhole Foundation’s reserves. This allocation is intended to drive priorities such as future interoperability research, grant funding to ecosystem teams through the Wormhole Foundation’s xGrant program, supporting the developer community, funding operating expenses, and other related initiatives. 2% of the Foundation Treasury will be unlocked at the TGE, while the remaining 21.3% of the locked W tokens will be unlocked linearly according to the token release schedule.
Governance and Wormhole DAO
The token-based governance system allows token holders to guide and influence the direction of the protocol. Over time, Wormhole plans to gradually delegate governance of the protocol to W token holders. After the token generation and distribution event, on-chain governance will largely guide community initiatives and treasury-related activities. The exploration of the possibilities of a multi-chain world has just begun, and the goal of this governance launch is to empower the Wormhole community to address these key areas with the necessary resources and support.
The decentralization process of Wormhole, as well as the detailed planning of its token economics, demonstrates its efforts to achieve Web3 goals. Through a reasonable distribution and release plan for tokens, Wormhole will gradually realize its decentralized and permissionless vision.