Try Quests to earn cryptoFees on Wormhole vs Terra Bridge
In the graph above, we can see the daily average fee for sending an asset to Wormhole and Terra Bridge. As can be seen, the average daily outbound fee for Wormhole is a bit unstable prior to November. We will ignore this for now and assume it is due to the recent launch of Wormhole on Terra at that time. However, since November, we can see that average daily outbound fees on Wormhole and Terra Bridge have been very comparable at around 1 UST.
Key findings
- Fees in UST for outbound transactions on Wormhole and Terra Bridge are very comparable
- Almost all fees for inbound transactions on Wormhole are paid in LUNA
- Almost all fees for inbound transactions on Terra Bridge are paid in UST
- Fees in UST for inbound transactions are higher on Wormhole compare to Terra Bridge
- Fees in UST for inbound transactions are higher on Wormhole due to the recent increase in the UST value of LUNA
Before we start, I will first answer some questions that are probably on your mind:
Why the comparison with only Terra Bridge?
Terra Bridge is currently the most used bridge on Terra. Therefore, I figured it would be more interesting to provide a more in-depth comparison to this bridge, rather than a low-level comparison to many bridges that support Terra.
What fees do we pay when bridging?
When bridging an asset, the user will have to pay the fee for two main transactions when bridging from chain A to chain B: 1. sending assets to the bridge on chain A and 2. retrieving the assets from the bridge on chain B. In this dashboard, we will call the fees associated with transactions 1 and 2 outbound and inbound fees respectively.
How are fees calculated in this dashboard?
Fees on Terra can take three forms:
- fee is paid fully in LUNA
- fee is paid fully in UST
- fee is paid in a combination of LUNA and UST
To make the comparison of fees fair, I decided to convert all fees to UST. This means that all fees in LUNA were multiplied by the daily average price of LUNA on the particular day of the transaction. If the fee is paid in a combination of LUNA and UST, the LUNA part is converted to UST using the above method and then added to the UST part to get the total fee in UST.
With that out of the way, we will compare the outbound and inbound fees on Wormhole and Terra Bridge and explain any differences in fees.
Next, we will compare the outbound fees for specific chains to see if there are any major differences in fees there. We will only compare Ethereum and Binance Smart Chain as these are the only chains that are supported both on Wormhole and Terra Bridge.
As can be seen, ignoring the spike of wormhole fees in late October, the daily average outbound fees on Wormhole and Terra Bridge for Ethereum and BSC are very comparable as well.
Next, even though these chains are not supported on Terra Bridge, I will also throw in some daily average outbound fees for Wormhole to Solana and Polygon as well.
Judging by the graphs above, we can conclude that the outbound fees on Wormhole and Terra Bridge are very comparable. Next, we will look at inbound fees to see if there are any major differences there.
Above we can see the daily average fee for bridging assets to Terra via Wormhole and the Terra Bridge. Now we can see a clear difference in fee: the average Wormhole fee is much higher. To explain why the inbound Wormhole is higher than that of Terra Bridge, we will look at the currency that is used to pay for the inbound fee for both Wormhole and Terra Bridge.
From these donut charts above we can see that almost all fees for inbound transactions are paid in LUNA on Wormhole and paid in UST on Terra Bridge. This means that the UST value of the inbound fee on Wormhole is almost entirely determined by the price of LUNA. To better illustrate this point, let's look at the same average inbound fee chart as above, but with the price of LUNA plotted as well:
As can be seen, the fee in UST for inbound transactions from Wormhole follows the price of LUNA almost exactly. Because the UST price of LUNA has been rising in the last few weeks, so have the UST prices of fees for inbound transactions from Wormhole.