In a recent announcement on October 30th, institutional market maker Flow Traders has formed a partnership with Wormhole, an interoperability protocol, in order to enhance cross-chain liquidity and performance. As part of Wormhole’s “solver” network of cross-chain liquidity providers, Flow Traders will acquire a stake in Wormhole Foundation and commit to facilitating multichain swaps.
Michael Lie, the global head of digital assets at Flow Traders, highlighted the issue of fragmentation within multi-blockchain ecosystems as one of the main challenges they face. He emphasized the importance of simplifying and unifying the ecosystem while improving interoperability.
Wormhole’s Solvers compete in real-time to fulfill cross-chain transfer requests, including complex multi-step trades communicated through cross-chain “intents” in a single transaction. The exact amount of Flow Traders’ investment in Wormhole has not been disclosed.
This partnership between Wormhole and Flow Traders is part of a broader effort by blockchain infrastructure providers to enter institutional cryptocurrency markets. For instance, on September 20th, tokenization platform Securitize integrated Wormhole’s messaging infrastructure to enable cross-chain capabilities for all assets tokenized through the Securitize platform. Additionally, in October, decentralized oracle Chainlink partnered with Swift for blockchain payments and revealed plans to assist institutions in maintaining transaction privacy and storing market data on-chain.
Flow Traders has established itself as a key market maker for cryptocurrency exchange-traded funds (ETFs) in the United States and other regions. The company provides liquidity to support various crypto ETFs, including iShares Bitcoin Trust (IBIT) and Grayscale Bitcoin Trust (GBTC), among others. In Q2 of 2024, Flow Traders reported trading approximately $500 million in crypto assets.
According to Robinson Burkey, the co-founder and chief commercial officer of Wormhole Foundation, smoother cross-chain integration has paved the way for increased institutional adoption of tokenized assets. Wormhole is a specialized blockchain protocol that facilitates the sending and verification of messages, including data on token transfers, across various blockchains. It connects nearly 30 networks and layer-2 scaling chains such as Ethereum, Solana, and Avalanche.