👌
Symbiosis as Interchain Communication Protocol
Interchain communicating messaging with Symbiosis: adding any assets from one blockchain into lending and farming protocols on other blockchains via cross-chain Zaps.
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 cross-chain Zaps powered by Symbiosis 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: 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 9. 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. For more details on the fee withholding process, please refer to Gas Fees for Cross-chain Operations via Symbiosis
Step 10. 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.