Last week, news.Bitcoin.com reported on the Wormhole announcement of a tokenization and smart contract platform project for the Bitcoin Cash (BCH) network. The Wormhole protocol was initiated by the firm Bitmain Technologies, and the codebase is a fork from the Omni Layer protocol. Furthermore, the project has already issued a bunch of Wormhole Cash (WHC) tokens that are backed by burned bitcoins.
Wormhole: The Tokenization and Smart Contract Protocol Launches for Bitcoin Cash
A group of Bitmain developers has launched a new protocol called Wormhole which aims to implement representative tokens and smart contracts without changing consensus rules. The development team says after a lot of research they created Wormhole from a fork of the Omni Layer project which can issue tokens using OP_Return transactions. So far the team has launched a website, published its white paper, and has begun to issue WHC tokens using the Proof-of-Burn process.
Wormhole Cash and Proof-of-Burn
According to the website and white paper, in order to create WHC, Wormhole users send 1 BCH to the burn address. Bitcoin Cash proponents should note — Users can’t just send BCH to the burn address and expect WHC tokens. Users must use the Wormhole protocol which ties the metadata information written within a BCH-based OP_Return transaction. The Wormhole software then transfers the burning through the BCH transaction allowing the data to be identified for the issuance of WHC tokens. There’s been 1,626BCH ($1.2Mn) sent to the burn address so far, but if less than 1BCH is sent, the platform will not generate WHC. The white paper further details that WHC also needs 1,000 confirmations to issue coins, and for every 1BCH deposited 100WHC is created. Users can also purchase WHC from the market, and the exchange Coinex will be the first trading platform to list the currency.
The project’s white paper which was kindly translated for news.Bitcoin.com by the cryptocurrency journalist, Cindy Daily, explains the team decided not to attempt two-way anchoring with BCH as they found there was no safe and feasible way to implement anchoring. The platform will also have fees associated with smart contract gas which will require BCH transactions. Anyone around the world can use Wormhole to issue a token after paying a BCH network fee and the WHC creation fee. New tokens cost 1WHC to create and fees will also be burned so the total WHC supply will shrink over time.
Tropos, Ionize, and Exosphere
The Wormhole developers also state the Wormhole protocol will be fully compatible with Bitcoin ABC version 0.17.2 and will be updated during the next upgrade. Moreover, the team has laid out a roadmap for plans until 2019. The Wormhole upgrade ‘Tropos’ will work toward protocol-based decentralized exchange systems after lots of research. Both Android and iOS compatible apps for mobile phones, alongside a desktop wallet client, and cold wallet solution as well. Developers hope to finish Tropos tasks by November 2018. Tropos is followed by the next set of goals called ‘Ionize’ which plans to integrate ERC721 compatibility as well as develop the multi-language Software Development Kit (SDK) by January 2019.
Lastly, the final plan on the roadmap called ‘Exosphere’ aims to harness permissionless smart contract capabilities. The team will also implement the Plasma protocol for further Wormhole scaling methods, and distribute a new generation of smart contract virtual machines like Ethereum’s EVM. The Wormhole development team also thanked the creators of the Omni Layer protocol which helped bolster the project’s beginnings.
“First of all, we want to give credit to Omni Layer — Its extensive use on USDT gives us confidence that more things can be done based on Bitcoin Cash — The Omni protocol takes full advantage of the features of the UTXO model and enables token management without changing the consensus rules and the protocol,” explains the Wormhole creators.
The Omni team helped us a lot in developing Wormhole. Meanwhile, Omni Layer sticks to the spirit of open source and uses the MIT license, which makes permissionless innovation possible.
What do you think about the Wormhole project? Let us know in the comment section below.
Disclaimer: Bitcoin Cash proponents should note that you can’t just send BCH to the burn address and expect WHC tokens. Users must use the Wormhole software. Readers should do their own due diligence before taking any actions related to the mentioned company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Images via Shutterstock, the Wormhole White Paper, and Website.
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Author: Jamie Redman