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Wormhole implements a flow cancel regulator to improve transaction efficiency
Wormhole, a leading interoperability platform, introduced Governor V2, a Governor flow canceling 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 improve transaction throughput while maintaining security, according to Hole in the wall.
The need for a flow cancellation regulation mechanism
Wormhole’s current rate limiting mechanism, known as Governor, places an upper limit on a chain’s total USD-denominated outflow within a 24-hour window. However, as usage increases, several chains frequently reach Governor limits, causing delays and frustration for users. This congestion is often due to non-fraudulent activities such as arbitrage and settlement, which consume the Governor’s limits, reducing its effectiveness in mitigating risks.
Flow canceling design
The Governor’s flow cancellation mechanism aims to alleviate these problems by taking into account both inflows and outflows. Here’s how it works:
- Net flow measurement: The Governor will now consider inflows along with outflows. As assets flow into a chain, the Governor reduces the cap usage, effectively canceling out the outflows that initially increased the cap. Only net flows (the difference between inflows and outflows) will be capped.
- Net flow management: For transactions where the net flow is zero, such as when users move a fixed amount of assets on and off the chain, the new behavior will prevent these flows from consuming Governor limits.
- Reliable Resources: The flow cancel functionality is initially enabled for a subset of stablecoins, allowing for better net flow management while maintaining security benefits.
Advantages of the flow canceling governor
This new mechanism offers several advantages:
- Users will no longer face delays when net flow is below the Governor’s limit for a given chain.
- Wormhole can support increased transaction flow in both directions without increasing Governor limits.
- THE protocol maintains lower limits, reducing risks and better protecting against vulnerabilities.
- Participants such as Guardians, Collaborators, and Builders can focus more on developing interoperability solutions rather than managing Governor limitations.
Backtesting analysis
Wormhole conducted a simulated implementation of the flow cancellation 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 cancellation approach will reduce potential user delays.
Further analysis highlighted that stablecoins such as USDC and USDT account for a significant portion of Governor’s limit usage. By applying the flow cancellation mechanism specifically to these tokens, Wormhole can handle a higher transaction volume without exposing the protocol to the volatility of other tokens.
Conclusion
The Governor flow cancellation mechanism is a promising solution to congestion during periods of high usage. By focusing on net flows, Wormhole can support more transactions while maintaining its goals of security and viability. This improvement significantly improves 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 major teams like Circle and Uniswap, Wormhole has facilitated over $40 billion in transfers across more than 1 billion cross-chain messages.
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