Wormhole, an interoperability protocol facilitating cross-chain asset transfers, has announced a comprehensive update to its native W tokenomics. The changes, revealed on September 17, 2025, include three key components: a W Reserve funded by protocol fees and revenue, a 4% base yield for stakers with higher rewards for active ecosystem participants, and a transition from bulk unlocks to biweekly token unlocks starting October 3, 2025.
The W Reserve will accumulate value from on-chain and off-chain protocol revenues, Wormhole Portal, and ecosystem applications to build a sustainable treasury. This mechanism channels revenues into W tokens, effectively reducing token supply and aligning holders with network expansion. The tokenomics maintains its supply cap of 10 billion W tokens with no dilution.
Stakers who participate in governance and use Wormhole apps can earn the 4% base yield, with active users able to increase rewards through the Portal Earn program. The yield sources include existing token supply and real protocol revenue without increasing token inflation.
The unlock optimization affects key allocation categories including Guardian Nodes, Community and Launch, Ecosystem and Incubation, and Strategic Participants. These categories will now release tokens over 4.5 years through smaller, predictable unlocks. Wormhole contributors have extended their lock schedules by six months, increasing alignment with the protocol until at least October 2028.
The W token serves as the multichain asset powering over 40 blockchains, supporting staking, governance, and ecosystem development. Following the announcement, the W token price jumped over 6.3%, trading at $1.66 on its April 3, 2024 debut before plummeting to $0.54 within approximately 10 trading days.
Currently, $45 million in W is staked, with 485 million W having been used in votes. Dan Reecer, co-founder of the Wormhole Foundation, holds the most significant influence over protocol governance with $30.5 million in Wormhole staked, representing 25.1% of voting power.