Terra is now the latest entrant in the communication bridge provided by Wormhole. Wormhole facilitates communication between top Defi networks and Solana. With the addition of a new user interface support, it is now fully compatible with the Terra network.
With this development, it is now possible to transfer digital assets between Ethereum, Solana, Binance Smart chain, and Terra through a simple and integrated interface. Previously, Terra users had to double wrap Terra tokens to port them between these networks. After the new interface support, it is no longer necessary.
In blockchain jargon, ‘wrapping’ refers to keeping a specific digital asset in a particular digital vault. It makes it possible to function on a blockchain while being issued in another. However, the process of wrapping has its own set of disadvantages. Firstly, wrapping can prove to be very expensive. If assets need to be exchanged over various chains, tokens have to be double-wrapped. It is not effective in terms of both time and cost.
Hendrik Hofstadt, director of Jump Crypto, is optimistic about the usefulness of Wormhole’s newest development. He says that once assets are able to move freely across Defi networks, new use cases will open up. Often these use cases could not be thought of in the earlier setting of wrapping and double wrapping. Among the new things possible with this development are liquid staking tokens and governance across chains.
The development is all the more significant since now the four biggest players of Defi Blockchain can now move assets freely between them. Increased interoperability will have a positive effect on further development in the Defi space.
