Wormhole, a leading interoperability platform, has introduced Governor V2, a flow cancellation governor mechanism designed to address congestion issues and improve transaction efficiency across supported blockchains. According to Wormhole, this new feature focuses on net flow to improve transaction throughput while minimizing latency and maintaining security.
The need for a flow cancellation regulator mechanism
Wormhole’s existing rate-limiting mechanism, known as the Governor, sets an upper limit on the total USD-denominated outflows on the chain within 24 hours. However, as usage grew, multiple chains frequently reached their governor limits, causing delays and user frustration. This congestion is often caused by non-fraudulent activities such as arbitrage and settlement, which drain governor limits and reduce risk mitigation effectiveness.
Flow offset design
The flow cancellation regulator mechanism aims to alleviate this problem by considering both inflows and outflows. Here’s how it works:
- Net flow measurement: Now the governor will consider inflows along with outflows. As assets flow into the chain, the governor will reduce the utilization of the limit, effectively offsetting the outflows that were initially increased. Only the net flow (the difference between inflows and outflows) is limited.
- Pure flow processing: For transactions with zero net flow, i.e. when a user puts a certain amount of assets into or out of the chain, the new behavior prevents these flows from consuming the governor limit.
- Trusted Assets: The flow cancellation feature will initially be applied to some stablecoins only, allowing for improved net flow management while maintaining security benefits.
Benefits of Flow Cancellation Regulators
This new mechanism offers several advantages.
- Users will no longer face delays when the net flow is below the governor limit of a particular chain.
- Wormholes can support increasing transaction flow in both directions without increasing governor limits.
- that much code Maintain lower limits to reduce risk and strengthen protection against vulnerabilities.
- Participants such as Guardians, Contributors, and Builders can focus more on developing interoperability solutions rather than managing governor restrictions.
Backtesting Analysis
Wormhole performed a mock implementation of the flow cancellation strategy on historical VAA flows and found that the net flow was significantly lower than that observed with a simple outbound strategy. This indicates that the flow cancellation approach will reduce potential user delay.
Further analysis highlighted that stablecoins such as USDC and USDT account for a significant portion of Governor limit utilization. By applying the flow cancellation mechanism specifically to these tokens, Wormhole can handle higher trading volumes without exposing the protocol to the volatility of other tokens.
conclusion
The flow cancellation governor mechanism is a promising solution to congestion during periods of high utilization. By focusing on net flow, Wormhole can support more transactions while maintaining security and liveness goals. These improvements significantly improve the cross-chain experience, reducing latency and improving efficiency.
About wormholes
Wormhole is a leading interoperability platform that connects 30+ blockchain networks to support a wide range of use cases including DeFi, NFTs, and governance. Trusted by high-profile teams like Circle and Uniswap, Wormhole has facilitated over $40 billion in transfers across over 1 billion cross-chain messages.
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