Biconomy : Deep Dive
This article follows the following topics:
- This is where Biconomy comes in
- How do we do it?
- Why should you use it?
- In a Nutshell
The Cryptocurrencies have brought liberation to the Internet and have solved one of the biggest problems i.e. centralization of Data and wealth by Decentralizing currency and network.
The saying goes like this, one solution gives birth to many new problems. Same is the situation with cryptocurrencies, while it provides decentralization of data and high security in your transactions, the process of performing these transactions is slow, complex & pricey for the end user. Also, since there are so many different networks, cross-chain transaction infrastructure is still lacking.
This is where Biconomy comes in
Biconomy is a multi-chain relayer protocol.We solves these 2 major problems:
- Paying to much Gas fees on every transaction
2. Lack of Cross-Chain Transaction infrastructure
How do we do it?
Biconomy has created 2 specific products to come up with a solution for each one.
To facilitate higher adoption of cryptocurrencies, mexa offers a one-stop solution to enable gasless transactions. The idea is that Gas fees should be paid by the developer not the users. The main reason being that, as the user starts to use the dapps he can be charged for extra features. It has the same revenue model as Paypal & Paytm just with dapps.
Biconomy offers two techniques for enabling gasless transactions for your smart contracts.
In some circumstances, it makes sense to employ a customized strategy. For example, if it is critical to remove external control or where a standard compliant function — such as EIP 2612 allows — must be implemented. We provide contracts for you to use in your dApps to inherit this functionality. Tokens like Dai and USDC (together with associated permission functionalities) may be supported in your dApp through Biconomy’s Custom Implementation method.
EIP 2771 Standard Implementation
Rather than incorporating meta transaction validation logic within your contract, you may inherit a recipient contract that can receive verified calls from a trusted forwarder. The trustworthy forwarder follows EIP 2771 by verifying signatures before invoking the smart contract with the original user address data attached.
To understand the Mexa inside out Click here
Hyphen is a cross-chain bridge to allow interoperability of different blockchains. There are many different bridges but ours are faster & cheaper. On all supported chains, Biconomy has built LiquidityPoolManager contracts, which will store all Liquidity. Executor Nodes, which are off-chain computers, are constantly checking these smart contracts for incoming deposit transactions.
There are two fundamental components of Executor Nodes:
Watch Tower: It listens for any incoming deposit transaction on all chains using the LiquidityPoolManager smart contract. When it discovers a deposit transaction, it informs the Executor component.
Executor: It checks the incoming deposit and begins a transaction on the opposite chain. Only the deposit transaction contains the other chain id, recipient address, and amount to be sent.
Only on the LiquidityPoolManager smart contract is the LiquidityProvider fee and transfer transaction charge subtracted on-chain. The LiquidityProviderManager contract allows only Executors to move monies.
In simple English, Biconomy has various liquidity pools on various blockchains, therefore if you want bitcoins for ether, you give us ether, we store that ether to our liquidity pool on ethereum and from our liquidity pool on Bitcoin we transfer you the bitcoins. For these transfers we pay the gas fees by batching transactions together & we charge you a liquidity fee which is much lower if you individually perform a transaction. Simple right!
Now, one can simply do cross-chain transfers.
To understand Hyphen inside out click here.
Why should you use it?
Biconomy has simplified transactions in web 3.0. Gasless Transactions & Cross-chain compatibility will reduce the friction between the users and cryptocurrencies allowing more users to use this new technology and disrupt the old centralized web 2.0.
There is a great demand for interoperability of blockchains & gasless transactions. The infrastructure of these options is still lacking.
In other words, Biconomy & its products act as a lubricant to the Crypto transactions. Its solutions help protocols talk to each other & helps simplify the whole transaction process for the user, just like we do it Web 2.0.
In a Nutshell
Biconomy provides the infrastructure for interoperability of blockchains & gasless transactions; these solutions would enable the masses to adopt the cryptocurrencies. It presents great opportunities for cryptocurrency developers to jump early into the game and grab the early mover advantage.