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Symbiosis as Interchain Communication Protocol
Interchain communicating messaging with Symbiosis: adding any assets from one blockchain into lending and farming protocols on other blockchains.
Looking for SDKs and API? Please check out our documentation for software developers Symbiosis Developer Tools
With Symbiosis, users can supply liquidity to other DeFi protocols. Yes, it's cross-chain and done in one transaction. So Symbiosis acts as an Interchain Communication Protocol here.
Currently, users can add assets via the Symbiosis protocol to the following lending and farming protocols:
- Aave, BENQI, C.R.E.A.M.
- Beefy
Let's consider one example to see how it works in Symbiosis protocol V2: a user has MATICs on Polygon and wants to deposit USDCs to AAVE on Avalanche (the same scheme is used to add liquidity to other protocols). The algorithm of interchain communication is shown in Scheme 1.
Scheme 1. Interchain communication routine with Symbiosis protocol V2.
Important notices for Scheme 1
Steps 6 and 10. The Symbiosis protocol mints/releases tokens with a ratio of 1:1 and then withholds an amount that equals the transaction processing fee on the current blockchain. Please refer to the document Gas Fees for Cross-chain Operations for more details on the fee withholding process.
Step 12. Once the depositing operation is accomplished, the user gets LP tokens or another confirmation about depositing to the protocol to their address on the destination chain.
The lifespan of Symbiosis protocol V1 has peacefully reached its end, and we stopped it. The information below is for historical records about the Symbiosis protocol development.
Let's consider one example to see how it works in Symbiosis protocol V21: a user has UNIs on Ethereum and wants to add BNBs to C.R.E.A.M. on the BNB chain (the same scheme is used to add liquidity to other protocols). The algorithm of this interchain communication is shown in Scheme 2.
Scheme 2. Interchain communication routine with Symbiosis protocol V1.
Important notice for the Scheme 2
There are two cases while doing interchain communication via Symbiosis protocol V1:
- 1.There is a Symbiosis liquidity pool {stablecoin, sToken} on the source blockchain of interchain communication operation: such a cross-chain operation involves burning sTokens.
- 2.There is no Symbiosis liquidity pool {stablecoin, sToken} on the source blockchain of interchain communication operation: such a cross-chain operation involves minting sTokens (Scheme 2).
Symbiosis uses the Ren protocol on Polygon and the BNB chain to perform cross-chain exchanges for BTC. When the Ren protocol receives renBTCs, it burns them, and sends BTCs to the user's address on Bitcoin Blockchain.
Symbiosis acts as the Interchain communication protocol exchanging tokens for BTCs.
From the user's point of view, just one transaction is sent to the blockchain, where the user has tokens to exchange.
Let's consider one example to see how it works: a user has UNIs on Ethereum and wants to swap them for BTCs (Scheme 3).
Scheme 3. Exchanging for BTC with the Ren Protocol (Symbiosis protocol V2).
Important notices for Scheme 3
Steps 6 and 10. The Symbiosis protocol mints/releases tokens with a ratio of 1:1 and then withholds an amount that equals the transaction processing fee on the current blockchain. Please refer to the document Gas Fees for Cross-chain Operations for more details on the fee withholding process.
Step 13. In the result, the user gets BTCs on the Bitcoin blockchain.
The lifespan of Symbiosis protocol V1 has peacefully reached its end, and we stopped it. The information below is for historical records about the Symbiosis protocol development.
From the user's point of view, just one transaction is sent to the blockchain, where the user has tokens to exchange.
Let's consider one example to see how it works: a user has UNIs on Ethereum and wants to swap them for BTCs (Scheme 4).
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Scheme 4. Exchanging for BTC with the Ren Protocol (Symbiosis protocol V1).
- If you are looking for a more detailed explanation of how interchain communicating works, please refer to the Symbiosis Routing Contracts document.