Wormhole Implements Flow-Canceling Governor to Enhance Transaction Efficiency
Wormhole,
a
leading
interoperability
platform,
has
introduced
the
Governor
V2,
a
flow-canceling
Governor
mechanism
designed
to
address
congestion
issues
and
improve
transaction
efficiency
across
its
supported
blockchains.
This
new
feature
focuses
on
net
flows
to
minimize
delays
and
enhance
transaction
throughput
while
maintaining
security,
according
to
Wormhole.
The
Need
for
a
Flow-Canceling
Governor
Mechanism
Wormhole’s
existing
rate-limiting
mechanism,
known
as
the
Governor,
places
an
upper
limit
on
the
total
USD-denominated
outflow
of
a
chain
within
a
24-hour
window.
However,
with
increasing
usage,
several
chains
frequently
hit
their
Governor
limits,
causing
delays
and
user
frustration.
This
congestion
is
often
due
to
non-fraudulent
activities
like
arbitrage
and
settlement,
which
consume
Governor
limits,
reducing
their
effectiveness
in
mitigating
risks.
Flow-Canceling
Design
The
flow-canceling
Governor
mechanism
aims
to
alleviate
these
issues
by
accounting
for
both
inflows
and
outflows.
Here’s
how
it
works:
-
Measuring
net
flow:
The
Governor
will
now
consider
inflows
alongside
outflows.
When
assets
flow
into
a
chain,
the
Governor
reduces
the
limit
utilization,
effectively
canceling
out
the
outbound
flows
that
increased
it
initially.
Only
net
flows
(the
difference
between
inflows
and
outflows)
will
be
constrained. -
Net
flow
handling:
For
transactions
where
the
net
flow
is
zero,
such
as
when
users
move
a
fixed
amount
of
assets
in
and
out
of
a
chain,
the
new
behavior
will
prevent
these
flows
from
consuming
Governor
limits. -
Reputable
assets:
The
flow-canceling
feature
is
initially
enabled
for
a
subset
of
stablecoins,
allowing
for
improved
net
flow
management
while
retaining
security
benefits.
Benefits
of
the
Flow-Canceling
Governor
This
new
mechanism
offers
several
advantages:
-
Users
will
no
longer
face
delays
when
the
net
flow
is
below
the
Governor
limit
for
a
given
chain. -
Wormhole
can
support
increased
transaction
flow
in
both
directions
without
raising
Governor
limits. -
The
protocol
maintains
lower
limits,
reducing
risks
and
better
guarding
against
vulnerabilities. -
Participants
like
Guardians,
Contributors,
and
Builders
can
focus
more
on
developing
interoperability
solutions
rather
than
managing
Governor
limits.
Backtesting
Analysis
Wormhole
conducted
a
mock
implementation
of
the
flow-canceling
strategy
against
historical
VAA
flows,
revealing
that
net
flows
were
significantly
lower
than
those
observed
in
a
simple
outbound
strategy.
This
indicates
that
the
flow-canceling
approach
will
reduce
potential
user
delays.
Further
analysis
highlighted
that
stablecoins
such
as
USDC
and
USDT
represent
a
significant
portion
of
Governor
limit
utilization.
By
applying
the
flow-canceling
mechanism
specifically
to
these
tokens,
Wormhole
can
handle
a
higher
transaction
volume
without
exposing
the
protocol
to
the
volatility
of
other
tokens.
Conclusion
The
flow-canceling
Governor
mechanism
is
a
promising
solution
to
congestion
during
high
utilization
periods.
By
focusing
on
net
flows,
Wormhole
can
support
more
transactions
while
maintaining
its
security
and
liveness
objectives.
This
improvement
significantly
enhances
the
cross-chain
experience,
reducing
delays
and
improving
efficiency.
About
Wormhole
Wormhole
is
a
leading
interoperability
platform
that
connects
over
30
blockchain
networks,
enabling
a
wide
range
of
use
cases
including
DeFi,
NFTs,
and
governance.
Trusted
by
prominent
teams
like
Circle
and
Uniswap,
Wormhole
has
facilitated
over
$40
billion
in
transfers
through
more
than
1
billion
cross-chain
messages.
Image
source:
Shutterstock
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