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Jump-Backed Wormhole Bridge Expands to Algorand Blockchain
The cross-chain bridge is hoping to capture some of Algorand’s $136 million in DeFi TVL.
By Tracy Wang
Updated May 11, 2023, 6:40 p.m. Published May 17, 2022, 1:00 p.m.
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The Jump Crypto-backed cross-chain bridge Wormhole has launched support for the Algorand blockchain.
The Algorand partnership marks Wormhole’s 10th integration with a layer 1 blockchain, as developers focus on interoperability solutions. Popular layer 1, or base-layer, blockchains, such as Ethereum, Avalanche and Solana, cannot easily communicate with each other, meaning assets held on one blockchain are difficult to transfer onto and account for on another.
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When tokens are bridged through Wormhole’s Portal Bridge, the original token is locked in a smart contract while a new Portal-wrapped version of that token gets minted on the target chain. Then, the wrapped tokens can be traded for tokens native to the target chain and used for decentralized finance (DeFi).
"Wormhole has quickly become one of the largest DeFi networks in the world," Wormhole Foundation Director Hendrik Hofstadt said in a statement. “The network plays a key role in enabling liquidity to flow into new ecosystems, which has a profound impact on the growth and expansion of decentralizing protocols, projects, liquidity, governance and participation.”
However, bridges have been historically prone to hacks, with critics saying they do not offer nearly as much security as the standalone blockchains they connect.
Wormhole's Solana-Ethereum bridge was hacked for over $320 million in February, leading Wormhole backer and crypto market maker Jump Crypto to backstop the nine-figure exploit.
“The integration of Algorand to Wormhole’s network is great news for builders of this ecosystem,” said Michel Dahdah of Rand Labs, an Algorand developer who collaborated with Wormhole on the integration. “It will allow us to access all the liquidity that exists outside of Algorand, significantly boosting the TVL of the network.”
According to its website, Wormhole currently boasts integrations with blockchains Avalanche, Terra and Polygon, among others, and has racked up over $760 million in total value locked (TVL).
Algorand’s total TVL is currently valued at $136 million, according to DefiLlama.
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