Robinson Burkey, Co-Founder of Wormhole, on Bridges, The Liquidity Fragmentation Problem, and Cross Chain Communication | Ep. 395

Blockchain

Share

Copied

Last updated: 

December 17, 2024

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Robinson Burkey, Co-Founder and CCO of Wormhole Foundation, joined the Cryptonews Spotlight podcast to share his insights on bridging chains, tackling liquidity fragmentation, and the role of Wormhole in creating an interoperable blockchain world.

From DoorDash to Wormhole: Journey into Interoperability

Robinson recounted his early days working at DoorDash and later at Acala within the Polkadot ecosystem. He identified the need for blockchain interoperability early on, understanding that crypto’s future would rely on a multi-chain world.

“I always felt interoperability was going to be this big problem… Even before 2021, it was not the consensus that things would be multi-chain.”

Joining Jump Crypto, Wormhole was born as a solution to connect Ethereum and Solana, solving liquidity transfer issues.

Evolution of Wormhole

“It wasn’t even messaging at the beginning. It was only an asset transfer between SOL and Ethereum.”

Wormhole began as a simple asset bridge but quickly became a robust interoperability protocol. Robinson described the project’s rapid growth as it expanded to connect over 30 chains, including SUI, Aptos, Avalanche, and emerging ecosystems like Monad and Berachain.

Understanding Messaging in Cross-Chain Communication

Robinson emphasized that messaging forms the backbone of Wormhole’s technology. It’s about transferring assets and enabling secure, decentralized state-sharing between blockchains. He compared it to SWIFT in traditional banking, ensuring communication between systems happens reliably and safely.

“Messaging is the core, most important layer… It’s a way to share state to update in a secure and decentralized way.”

Tackling Liquidity Fragmentation

Robinson explained how liquidity fragmentation arises when bridges create multiple versions of the same asset. For example, ETH on Arbitrum and Base might differ based on its transfer path.

“Liquidity fragmentation is a real problem. It’s the idea that there are multiple versions of what should be the same asset.”

Wormhole’s Native Token Transfer (NTT) technology addresses this by unifying liquidity across chains and preventing duplication.

Native Token Transfer (NTT): Solving Real Problems

With NTT, Wormhole allows multiple verification methods while minting a single token on the target chain. This technology solves liquidity fragmentation issues and simplifies asset transfers, making DeFi ecosystems more efficient and user-friendly.

“NTT is a way to say, ‘Here is one set of burn and mint contracts, but you can put a bunch of bridges in between them.’”

Wormhole’s Impact on Stablecoins

Robinson highlighted Wormhole’s partnerships with leading stablecoin providers like Circle, MakerDAO, and Agora.

“Stablecoins are one of the killer use cases… We’re seeing demand for stablecoins across all these ecosystems.”

Stablecoins, crucial for global crypto adoption, benefit from Wormhole’s technology to ensure seamless multichain transfers without liquidity fragmentation.

Wormhole as the Multi-Chain Gateway for Institutions

Burkey says institutions are no longer “coming”—they’re here. According to him, Wormhole is key in enabling on-chain capital movement for institutions like BlackRock and Securitize.

“We’re really making a big push into institutions… We started with the biggest one—Securitize and by extension, BlackRock.”

Robinson underscored that Wormhole is focused on action rather than just announcements, proving its value as the leader in interoperability.

Meme Coins and Wormhole: The Suez Canal for Crypto

Robinson described how meme coins like Bonk, SPX, and MAGA are leveraging Wormhole for multichain transfers, particularly between Solana and Base.

“Wormhole is almost like the Suez Canal or Panama Canal for meme coins.”

While some dismiss meme coins, Robinson noted their ability to drive liquidity and user engagement across chains.

Importance of UX in Cross-Chain Solutions

Robinson emphasized Wormhole’s focus on user experience. By addressing backend complexities, Wormhole ensures that users can transfer assets seamlessly across chains without encountering fragmented or wrapped tokens.

“Our job is to solve all of those annoying little nuances… so users don’t give a shit until they have to.”

Why the Name ‘Wormhole’?

Robinson shared the origins of Wormhole’s name, highlighting its simplicity and intuitive appeal.

Initially developed at Jump Crypto, Wormhole captured the essence of blockchain bridging, providing users a magical, seamless experience.

“You put something on one side, it goes in, and it comes out there. It’s magic.”

Future of Wormhole: Vertically Integrating the Interop Stack

“We’re going for the entire interop stack. Everything is going to enter the Wormhole.”

Looking ahead, Robinson outlined Wormhole’s ambition to dominate the interoperability stack by integrating messaging, asset transfers, and intents. They will focus on real-world action, securing value across blockchains and pushing deeper into institutional markets.

Stablecoins as the Bridge to Real-World Adoption

Robinson reiterated the growing importance of stablecoins, particularly in emerging markets. He shared real-world examples, from developers in Argentina opting for stablecoin salaries to his own experience paying with USDC in Singapore.

“Stablecoins are critical. They help maintain the US dollar’s foreign reserve currency status.”

Institutions, On-Chain Capital, and 2025 Plans

“We’re seeing capital on-chain moving between chains… That’s the difference now. It’s no longer announcements—it’s action.”

Wormhole’s 2025 plans include expanding its role as the backbone of institutional on-chain activity and driving adoption for stablecoins, intents, and chain abstraction solutions.