StellaSwap Partners with Wormhole to Rebuild Liquidity on Moonbeam

StellaSwap
6 min readOct 7, 2022

We’re excited to share with you that Wormhole is coming to Moonbeam! The time has come for StellaSwap and the wider Moonbeam ecosystem to rebuild itself post-Nomad exploit. The foundation of any robust ecosystem lies on a sturdy infrastructure, and in the context of Moonbeam, bridging still remains a core pillar of the network.

Wormhole will be the leading bridge for StellaSwap, allowing users to bridge their assets across the top blockchain networks securely. StellaSwap farms will be rebuilt with Wormhole assets.

Why Wormhole

A tremendous amount of resources was expanded internally as well as across the ecosystem to evaluate the next steps for Moonbeam post-Nomad exploit. This was manifested in StellaSwap’s bridging framework that outlined the key parameters that are useful for evaluating bridges for the ecosystem.

The selection of Wormhole was based on two major considerations;

  1. Moonwell Governance Vote: Moonwell community governance enabled the broader Moonbeam ecosystem, including StellaSwap, to poll users for their bridge preference through a snapshot vote on the preferred bridge. Wormhole was the overwhelming favourite, amassing 66% of the total votes.
  2. Security & Financial Coverage as the Over-Arching Factors: The second major consideration was our own internal evaluation of the most optimal bridge choice based on our analysis, which pointed to Wormhole based on two main factors; security and financial coverage. As StellaSwap was at ground 0 for Nomad’s exploit, we fully understood the need for a robust security framework and the importance of financial coverage in making users whole in the event of an exploit.

Security must be discussed from a larger spectrum of elements that is beyond architectural logic but also, and equally, emphasised on various other vectors that included operational processes, safeguard mechanisms, audit coverage (full audit, continual audit & bounty), incident control and testing SOPs (for deployments). The comprehensiveness of “security” must be explored in detail for each component to ensure a proper evaluation of security prowess, and Wormhole edges out in aggregate. This will be discussed in the security section below.

There was also a concession that was highlighted in the framework that exploits/hacks may be undeniable in the world of DeFi, and therefore another core pillar discussed was financial coverage. This exact point was presumably a major factor by participants in the Moonwell governance process, as in the case of Nomad, there was no ‘lender of last resorts’ to backstop user losses. This insurance coverage — besides a robust security framework — played a strong part in why Wormhole was regarded as a credible and strong bridge option.

Introduction to Wormhole

Wormhole is a cross-chain messaging protocol that is known as one of the biggest bridges in the space, amassing half a billion dollars in TVL with a focus on high-value chains. Wormhole is a decentralized protocol that possesses a list of core contributors including Jump Crypto, the crypto arm of high-frequency trading behemoth Jump Trading Group.

Initially created as a decentralized bridge connecting Ethereum to Solana, Wormhole has grown exponentially to extend its reach across 13 other high-value chains such as Avalanche, Polygon, BNB, Fantom and more.

“There’s no doubt that Wormhole is a major force in the cryptocurrency space with a highly-respected and talented team. That is why we’re excited to rebuild towards a cross-chain future that will unlock next-gen, interoperable applications within DeFi. “ — Atticus, Co-Founder of StellaSwap

There is an important distinction between Wormhole and its bridge, that will be explicated here;

  • Wormhole: The underlying message protocol that allows information to flow freely cross-chain between previously siloed blockchains.
  • Portal: The main bridge that offers unlimited transfers across chains for tokens and NFTs that is wrapped by Wormhole.

Bridge Security Comparative Analysis

This is perhaps the most vital factor for evaluation of bridges, covering trust mechanism and security assurances. The former covers the spectrum of trust assumptions embedded within their logic and (operational) verifiers instituted in the system, while the latter covers the depth of audits, code deployment process and external bounties. The Nomad exploit underlined the need for a comprehensive and fully robust security framework; it is simply not enough to have a secure architectural logic without a corresponding emphasis on secure operational measures. It is therefore vital to analyze the full-suite of security elements that not only include the architectural logic, but also — with equal emphasis — the respective operational security measures and safety measures determining the protocol’s code quality. Here is the comparative analysis for security across the bridges;

Across all security vectors, Wormhole stood out. The security guarantee of Wormhole comes from the reputational authority of the Guardians, which is made up of 19 of the largest staking and infrastructure providers in Web3. Beyond that, their dedication towards continual audits, offering the highest bounties as well as extensive incident control + robust on-chain monitoring played a huge role in edging the rest of the bridges. We have spoken to the Wormhole’s Chief Security Officer (CSO) to understand their security infrastructure and processes at a greater depth, which gave us more conviction on their dedication towards security.

Wormhole Portal’s Farm Launch

The following strategic assets will be re-launched on StellaSwap with Wormhole’s assets that include;

  • USDC
  • ETH
  • WBTC
  • BUSD

Given that the ecosystem will revert to business-as-usual (BAU), the above strategic farms — together with other native farms such as DOT — would need to be the first priority, especially for critical protocols like Moonwell, that has conceived the plan for deprecating Nomad assets and is awaiting for sufficient liquidity to open other non-native markets.

Besides the aforementioned farms, we will collaborate closely with Wormhole to support other assets across other chains.

Utilizing Ecosystem Grants to Spearhead Growth & Liquidity

StellaSwap has already submitted an ecosystem grant proposal for rebuilding baseline liquidity across all strategic assets. You can start voting on it here > StellaSwap’s Ecosystem Grant Proposal.

In the event that the vote passes, StellaSwap will launch the strategic farms with ecosystem grants to drive up TVL for the ecosystem, allowing deeper market depths and a conducive trading environment, which are critical components of a fully-functioning and robust ecosystem.

About StellaSwap

StellaSwap is the first and leading Moonbeam DEX that offers an integrated gateway to the DeFi world. Users can swap, earn, yield farm, bridge assets, explore new projects and engage in NFT trading all from a single unified platform. StellaSwap’s products are structured in such a way that facilitates decentralized governance of STELLA holders, while continuing to innovate on the collective foundations by design.

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StellaSwap

StellaSwap.com, Leading Moonbeam DEX and DeFi gateway on Moonbeam. Swap, earn & stake effortlessly from a single unified platform.