Wormhole Cross-Chain Messaging

Wormhole, a core partner of Pike, plays a pivotal role in enabling cross-chain communication between the Pike Hub and Spokes. One primary function involves validating user assets on Hub and Spokes, ensuring their suitability as collateral for borrowing on other chains. Additionally, it enables cross-chain liquidations, enhancing the security and efficiency of Pike's operations.

How Wormhole enables cross-chain borrowing on Pike

Below is an illustrated example of how messages flow when a user borrows USDC on the Optimism Blockchain. Note that assets are not wrapped or transferred across blockchains. Instead, Wormhole only relays the users' request to Optimism.

Transport Fees

Cross-chain transactions incur a transport fee for relaying the message through Wormhole and covering gas fees for executing transactions on the destination chain.

For example, when a user borrows USDC on the Optimism network, the transaction originates on Base. The transport fee encompasses relaying the message and gas fees to execute the transaction on Optimism. Transport fees vary significantly depending on the destination chains. For instance, gas prices on Ethereum may be higher during periods of high activity.

Wormhole Guardians

The Wormhole Guardian set, consisting of 19 Guardians, serves as validators that attest to messages on connected chains. When a supermajority (2/3) of the Guardians sign a message, it produces a Verifiable Action Approval (VAA), which contains the user's message and the Guardian signatures. This VAA is then sent to the destination chain to authorize the intended actions.