Wormhole announced an update to its Wormhole native tokenomics.W( ), including a reserve token and an increased yield for investors. Changes could have an impact on the governance of the protocol, since staked Wormhole Tokens give voting power away to delegates.
A Wednesday announcement revealed three major changes. coming Wormhole will introduce a new token with a W-reserve funded from protocol fees, revenue and rewards. Staking the Wormhole coin now yields 4% with better rewards for ecosystem participants.
“The goal of Wormhole Contributors is to significantly expand the asset transfer and messaging volume that Wormhole facilitates over the next 1-2 years,” The protocol stated. Wormhole says that as more tokens are adopted and the revenue returns to Wormhole’s company, they will lock up even more.
Wormhole was founded in late 2020 to act as a transfer bridge between Ethereum and Solana. Wormhole’s native token launched on April 3rd, 2024.
In just 10 days, the token’s price plummeted from $1.66 to $0.54. On Wednesday, the price of tokens increased by over 6.3% following the revision to tokenomics.
The announcement by Wormhole attracted a lot of attention to X. However, some users were disappointed that there was no second airdrop on the roadmap or a mechanism for buyback and burning. It is common to use such mechanisms in order to lower a token’s availability and boost its price.
The new Wormhole tokenomics may affect the protocol’s governance. The W token is used as a mechanism for governance: users can stake W tokens to give power to delegate who then vote on running the protocol.
A total of $45,000,000 in W has been staked.
Dan Reecer is the co-founder and CEO of Wormhole Foundation. He has the greatest influence on protocol governance, with $30.5 Million in Wormhole bets at the time this article was written. representing 25% of the voting power
Cointelegraph contacted Wormhole to get a comment. However, at the time of publishing they had not heard back.
Related: Flow Traders, Wormhole partner to boost cross-chain liquidity
Wormhole takes on the growing crypto industry
Wormhole, an interoperability platform that enables assets to be launched across multiple blockchains and eco-systems, has been receiving more attention in the crypto world this year.
The functionality can be useful for those stablecoin or RWA tokenization issues who want to distribute assets on multiple chains.
Wormhole is not the only competitor. Crosschain messaging services are also competitors. ChainlinkLayerZero is an omnichannel deployer and Axelar, the interoperability standard.
Magazine: TradFi is building Ethereum L2s to tokenize trillions in RWAs — Inside story
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Source: cointelegraph.com
