Parachain winners Acala and Karura will connect Polkadot and Kusama with the broader crypto ecosystem.
Key Takeaways
- Acala and Karura will integrate with the Wormhole cross-chain bridge.
- The update will enable users to send tokens from other Wormhole-connected Layer 1 networks to the Polkadot and Kusama ecosystems.
- While Wormhole has helped create a more interconnected blockchain ecosystem, recent hacks have raised concerns over bridge security.
Acala and Karura have announced plans to integrate with Wormhole's leading cross-chain bridge. The move will connect the Polkadot and Kusama ecosystems with eight other Layer 1 chains, including Ethereum, Avalanche, Terra, and Solana.
Polkadot Prepares for Wormhole Integration
The Polkadot ecosystem is integrating with Wormhole.
Acala and Karura, two DeFi-focused parachains running on Polkadot and Kusama, have announced that they will integrate with the Wormhole cross-chain bridge. A Wednesday press release revealed that development to connect the parachains to Wormhole was ongoing, with an estimated launch date for the second quarter of 2022.
The Wormhole integration will let users send tokens from other Wormhole-connected Layer 1 networks to Acala and Karura. From there, tokens can either be converted to other Polkadot and Kusama native assets or be used as collateral to mint the aUSD and kUSD stablecoins.
Once the bridge is operational, it will give the Polkadot and Kusama networks easy access to over $200 billion of liquidity from eight other Layer 1 networks. For example, DeFi protocols building on Acala or any other connected Polkadot parachains will be able to integrate tokens sent through Wormhole to use in yield farming strategies or to provide liquidity. Acala and Karura will join Ethereum, Avalanche, Solana, Polygon, Terra, BNB Chain, Fantom, and Oasis to become the ninth and tenth networks to allow token bridging through Wormhole.
Karura will be the first of the two networks to join Wormhole. Karura serves as Acala’s equivalent on the Polkadot Canary network Kusama. Like many previous launches and upgrades, new integrations will first be tested on Kusama before being committed to the more secure Polkadot network.
The Wormhole is a message-passing protocol that lets users send assets such as tokens and NFTs across various blockchains using smart contracts. It also enables cross-chain communication protocols and multi-chain oracles to share information between Layer 1 chains.
While Wormhole has helped create a more interconnected blockchain ecosystem, many have raised concerns over the protocol's security and other similar cross-chain bridges. In February, the Wormhole Solana bridge fell victim to one of the most significant exploits in DeFi history when a hacker faked the bridge transfer signatures to steal 120,000 Ethereum worth over $322 million at the time.
More recently, the Ronin Network team disclosed that its bridge connecting Ethereum mainnet to the Axie Infinity ecosystem was hacked for about $552 million on Mar. 23, further highlighting the vulnerability of cross-chain bridges. Nevertheless, as more blockchains look to offer a way to connect with Ethereum and other Layer 1 networks, demand for cross-chain interoperability solutions remains high.