Solana set to launch decentralized Ethereum bridge to power DeFi

The smart contract platform that recently entered the spotlight thanks to FTX's Serum, announced the upcoming release of what it says is a decentralized bridge for Ethereum ERC-20 tokens.

Called Wormhole, the bridge would allow users to transfer value between the different blockchains, turning ERC-20 tokens into Solana's corresponding SPL standard.

The bridge is currently being audited by Kudelski, a major Swiss security firm.

A beta of the bridge will be available to developers in a Oct. 28 hackathon, with a full release expected soon after.

Wormhole uses a set of "Guardians" picked from Solana's existing validators on the proof-of-stake network.

Guardians are responsible for reading data from both blockchains and verifying the correct operation of the bridge.

The system appears to work in a similar way to federated bridging seen on Bitcoin sidechains like Liquid or RSK, though the guardians do not seem to be direct custodians of the assets in the bridge.

"These different bridges have tradeoffs between how fast they can be built, user speed, cost, and decentralization but you can combine them to have the best of both worlds," he explained.

Solana is currently home to Serum, an order book-based decentralized exchange developed by FTX. Up to now, Ethereum liquidity could only make its way to Solana through FTX's wrapping service.

Yakovenko also cited a few other DeFi protocols currently building on Solana, including Stardust, Terra, Ramp DeFi, Anchor and REN. Solana claims a transaction rate of more than 50,000 transactions per second, which is achieved through a variation of the Practical Byzantine Fault Tolerance algorithm seen in blockchains like NEO. The core idea behind its architecture is to have a network that is at least as fast as a single node, which means eliminating bandwidth bottlenecks that often limit scalability on other chains.