Wormhole Token big pump 6.3%! W reserves launch and stake rewards increase ignite market enthusiasm

Wormhole announced significant tokenomics reforms, including the launch of W reserves funded by protocol fees, a 4% staking base yield, and an optimized token unlock mechanism, which triggered a positive market response, with the token price immediately pumping over 6.3% after the announcement. This series of reforms aims to enhance holder value and significantly increase the cross-chain asset transfer volume supported by Wormhole in the next 1-2 years.

Wormhole tokenomics three revolutionary changes

According to the announcement on September 17, the Wormhole Token will undergo three major changes aimed at reversing the downward trend since its initial release in April:

W reserve mechanism: The token reserve funded directly by protocol fees and income, providing intrinsic value support for the token.

Increase Staking Rewards: The basic staking yield has been raised to 4%, and active ecosystem participants can receive higher rewards.

Optimize Unlocking Mechanism: Change from bulk unlocking to unlocking once every two weeks to reduce market selling pressure.

Wormhole states: "The goal of Wormhole contributors is to significantly increase the volume of asset transfers and message passing supported by Wormhole in the next 1-2 years." With the increase in adoption and revenue return, it is expected that more tokens will be locked, further improving the market supply-demand balance.

From Initial Dullness to Potential Rebound: The Market Performance of Wormhole Token

(Source: CoinTelegraph)

Wormhole was established at the end of 2020, initially serving as a bridge for Token transfers between Ethereum and Solana, and launched its native Token on April 3, 2024.

When the Token first debuted, the trading price was $1.66, but it plummeted to $0.54 in about 10 trading days, and has since performed poorly, despite the overall cryptocurrency market being in a bull cycle. After the tokenomics revision announcement on September 17, the Token price rose by more than 6.3%, indicating that the market has a positive attitude towards these changes.

Community Response and Governance Impact

The announcement of Wormhole has attracted widespread attention on the social media platform X, but some users expressed disappointment at the absence of a second airdrop or buyback and burn mechanism in the roadmap. Such mechanisms are commonly used to reduce the supply of tokens in hopes of increasing prices.

The new tokenomics will also affect the governance structure of the protocol. The W token serves as a governance mechanism, allowing users to stake their W tokens to allocate power to representatives, who will vote on the operation of the protocol. Currently, the amount staked in W is 45 million USD, with 485 million W used for voting.

Dan Reecer, co-founder of the Wormhole Foundation, has the greatest influence on protocol governance. At the time of writing this article, his stake amount is $30.5 million, accounting for 25.1% of the voting power.

Cross-chain Interoperability Market Competition Intensifies

Wormhole and other interoperability protocols are at a critical moment for cryptocurrencies, receiving more attention this year: the ability to deploy assets across different blockchains and ecosystems. This functionality is particularly important for stablecoin and RWA token issuers that need to deploy assets across multiple chains.

Wormhole's main competitors include:

· cross-chain messaging service Chainlink

· Omnichannel Deployer LayerZero

· Interoperability Protocol Axelar

As the demand for cross-chain interoperability continues to grow, the tokenomics reform of Wormhole may help it solidify its position in this competitive field.

Market Outlook and Investment Opportunities

After the tokenomics reform, the market prospects for Wormhole Token may see significant improvement. A 4% base staking yield provides stable returns for long-term holders, while the W reserve mechanism offers stronger value support for the token.

As the demand for cross-chain asset transfers grows, the usage and revenue of the Wormhole protocol are expected to increase, further enhancing the intrinsic value of the Token. For investors seeking investment opportunities in the realm of cross-chain interoperability, the latest reforms of Wormhole may mark a noteworthy turning point.