Conformal Blocks, Generalized Theta Functions and the Verlinde Formula

In 1988, E. Verlinde gave a remarkable conjectural formula for the dimension of conformal blocks over a smooth curve in terms of representations of affine Lie algebras. Verlinde's formula arose from physical considerations, but it attracted further attention from mathematicians when it was realized that the space of conformal blocks admits an interpretation as the space of generalized theta functions.