Frequently Asked Questions | Symbiosis
Find answers to the most popular questions about the Symbiosis protocol.
Our vision is that users need a simple solution for moving their liquidity across multi chains; current solutions like bridges create liquidity fragmentation and are not trivial for end users.
Our idea was that a multi-chain world needs an easy-to-use solution, as Uniswap. So we created Symbiosis: it acts as a cross-chain AMM DEX and interchain communication protocol allowing users to swap their assets and move liquidity between chains in one click (in one transaction).
In a nutshell,
- Symbiosis protocol V2 inherits the main concepts and the logic of cross-chain operations of V1.
- The difference lies in the liquidity pools used to conduct cross-chain operations via the Symbiosis protocol.
A relayer is a specific software run by an organization or individual in a decentralized p2p network, not owned by anyone. The software listens for transactions on one blockchain, reaches a consensus with other relayers, and calls smart contracts on another blockchain. A relayer neither holds any of users' funds nor sends money transfers across networks.
The Symbiosis correspondent network is a network of relayers, not ruled by anyone, but operating in a p2p manner, so all relayer nodes are equal. There is no leader in this network, and the team of Symbiosis neither controls it.
They do not receive any reward for bridging. However, they do receive rewards as a part of relayers consensus distribution.
If you ask who is paying gas fees for bridging, the answer is relayers pay for the gas, which is precharged from a user.
Technically, the Symbiosis protocol can support the chains listed below:
- L1/L2 EVM compatible blockchain (with the right Solidity version).
- WASM blockchain (Near).
Practically, we will support blockchains that get market traction and are appreciated by the users. Since there are legal risks of integrating new blockchains, we consult legal advisors before integrating any.
Govern the Symbiosis DAO and DAO Treasury.
Any token holder (and only token holders!) can submit governance proposals. Relayers stake their tokens in the Staking contracts.
Our goal is to design a DAO, which locks tokens before token holders can vote for proposals. However, this design brings legal risks. We are actively researching this topic, considering legal risks. So far, we will proceed with the current design (without locks) appreciated by the market.
Token holders don't get any reward for participating in the governance process.
The simple solution to this problem is AMM pools, which design perfectly handles this problem.
At Symbiosis, we rely on proven solutions for Uniswap-like and Curve-like models that have been confirmed to be efficient over time. A liquidity pool between two networks is always deployed on one of these networks (usually, on the one with fewer transaction fees).
The ratio of the numbers of assets in the pool towards one another determines their prices. With an increase in one of the directions of exchange, the ratio of assets changes, and the price of each of them comes to a “non-market” state.
At this point, arbitrageurs come into play. Arbitrageurs are an important element of the AMM protocols. They are competing for the right to buy an asset from the pool at a discount price.
There is one difference in the implementation of Symbiosis pools: one of the pool’s assets is a wrapped representation of the source token. Thus, arbitrageurs should execute the bridging scenario (Token A <> sToken A) in addition to the usual scenario of buying an asset on the open market. It’s done to transfer source tokens from (or into) the Symbiosis protocol and manage them in the pools. The stable pools have their peculiarities and can potentially work between several networks at once.
The main directions are:
- Fees collected from all swaps going through that pool,
- Farming incentivization.
There are two cases:
- EVM-incompatible blockchains with smart contracts (e.g. Solana, Near):We will support them as long as they allow the EdDSA/ECDSA key generation. Integration complexity depends on the virtual machines and the smart contract languages they use.
- Blockchains without smart contacts (e.g. Bitcoin):Definitely, we cannot execute the AMM logic directly on them. However, if they support ECDSA and HTLC contracts (hash time lock), we can bridge the native assets since our Relayers support that. So as for UX, it will be similar to swapping ETH -> BTC, and slightly different for BTC -> ETH.