Institutional market maker Flow Traders has partnered with Wormhole, an interoperability protocol, to improve cross-chain liquidity and performance, according to an Oct. 30 announcement.
Flow Traders will buy a stake in Wormhole Foundation and commit to facilitating multichain swaps as part of Wormhole’s “solver” network of cross-chain liquidity providers, Flow Traders and Wormhole said.
“One of the biggest challenges we see is the fragmentation within multi-blockchain ecosystems,” Michael Lie, Flow Traders’ global head of digital assets, said in a statement.
“It’s essential to simplify and unify the ecosystem while enhancing interoperability,” Lie said.
Wormhole’s Solvers compete in real-time to fulfill cross-chain transfer requests, including cross-chain “intents” that communicate complex multi-step trades in a single transaction.
The size of Flow Traders’ investment in Wormhole was not disclosed.
Flow Traders’ Q2 2024 report. Source: Flow Traders
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Wormhole’s deal with Flow Traders is part of a broader push into institutional cryptocurrency markets by blockchain infrastructure providers.
On Sept. 20, tokenization platform Securitize integrated Wormhole’s messaging infrastructure to “bring cross-chain capabilities to all assets tokenized through the Securitize platform,” Securitize said.
In October, Chainlink — a decentralized oracle — partnered with Swift for blockchain payments and tipped plans to help institutions keep transactions private and store market data on-chain.
Flow Traders has emerged as a core market maker for cryptocurrency exchange-traded funds (ETFs) in the United States and elsewhere.
It provides liquidity to support crypto ETFs, including iShares Bitcoin Trust (IBIT) and Grayscale Bitcoin Trust (GBTC), among others.
In the second quarter of 2024, Flow Traders traded approximately $500 million in crypto assets, the company said in a quarterly financial report.
Smoother cross-chain integration “has set the stage for increased institutional adoption of tokenized assets,” Robinson Burkey, Wormhole Foundation’s co-founder and chief commercial officer, said in September.
Wormhole is a blockchain protocol specializing in sending and verifying messages — including data on token transfers — among various blockchains.
It connects nearly 30 networks and layer-2 scaling chains including Ethereum, Solana, and Avalanche.
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