Flow Traders, an institutional market maker, has announced a partnership with Wormhole, an interoperability protocol, to enhance cross-chain liquidity and performance. As part of the collaboration, Flow Traders will acquire a stake in Wormhole Foundation and support multichain swaps within Wormhole’s “solver” network of cross-chain liquidity providers.
Michael Lie, Flow Traders’ global head of digital assets, highlighted the challenge of fragmentation within multi-blockchain ecosystems and emphasized the need for simplification and unification to enhance interoperability.
Wormhole’s Solvers compete in real-time to fulfill cross-chain transfer requests, including complex multi-step trades in a single transaction.
The exact size of Flow Traders’ investment in Wormhole has not been disclosed.
This partnership between Wormhole and Flow Traders is part of a wider effort by blockchain infrastructure providers to enter the institutional cryptocurrency markets. For example, tokenization platform Securitize integrated Wormhole’s messaging infrastructure to enable cross-chain capabilities for all assets tokenized on their platform.
In addition, decentralized oracle Chainlink partnered with Swift to facilitate blockchain payments and revealed plans to assist institutions in maintaining transaction privacy and storing market data on-chain.
Flow Traders has become a significant market maker for cryptocurrency exchange-traded funds (ETFs) in the United States and other regions. The company provides liquidity support for various crypto ETFs, including iShares Bitcoin Trust (IBIT) and Grayscale Bitcoin Trust (GBTC), among others.
According to Flow Traders’ quarterly financial report, in the second quarter of 2024, the company traded approximately $500 million in crypto assets.
The smoother integration of cross-chain capabilities has paved the way for increased institutional adoption of tokenized assets, according to Robinson Burkey, co-founder and chief commercial officer of Wormhole Foundation.
Wormhole is a blockchain protocol specializing in sending and verifying 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.