Symbiosis v1 vs. v2

The differences between Symbiosis protocol v1 and Symbiosis protocol v2.

Symbiosis protocol v2 is up and running. It inherits the main concepts and the logic of cross-chain operations of Symbiosis protocol v1, and due to its organization, it provides much better capital efficiency and can be easily extended to new blockchains.

The Symbiosis Protocol v1 peacefully reached its end of life and we shut it down.

This document covers the similarities and differences between Symbiosis protocol v1 and its direct successor, Symbiosis protocol v2.

In a nutshell,

• Symbiosis protocol v2 inherits the main concepts and the logic of cross-chain operations from Vv1.

• The difference lies in the liquidity pools used to perform cross-chain operations via the Symbiosis protocol.

Let’s take one step deeper.

The Symbiosis protocol (v1 and v2) works with a particular stablecoin on each supported blockchain to perform cross-chain operations. For instance, it’s USDC on Ethereum and BUSD on BNB.

Such a stablecoin has its wrapped representation (sToken) on another blockchain with a 1:1 ratio to its locked original. For example, it is USDC on Ethereum, and its wrapped representation is sUSDC on another blockchain.

Symbiosis Protocol v1

The Symbiosis protocol V1 has one Nerve-like liquidity pool {stablecoin, sToken} for each blockchain pair that supports direct cross-chain operations. Such a liquidity pool is located on the blockchain with the lowest gas fee (in the USD equivalent) of the pair and contains:

• The stablecoin selected for that blockchain, and

• Its wrapped representation on another blockchain (sToken).

For instance, for the Ethereum — BNB chain pair, the liquidity pool {sUSDC, BUSD} is on BNB to minimize transaction fees (Scheme 1).

Scheme 1. Ethereum — BNB liquidity pool {sUSDC, BUSD}.

The Symbiosis protocol v1 owns and supports the net of such AMM to perform cross-chain operations (Scheme 2).

Scheme 2. Nerve-like liquidity pools with {stablecoin <> sToken} pairs in the Symbiosis Protocol v1.

If there is no liquidity pool for a blockchain pair, there are no direct cross-chain swaps for that pair. So, for instance, you cannot directly swap a token on Telos for a token on Avalanche.

Symbiosis Protocol v2

The main difference between Symbiosis Protocol v2 and v1 is that the liquidity pools for cross-chain operations are now consolidated on the Symbiosis Host Chain (Scheme 3).

Scheme 3. Symbiosis protocol v2: Octopool.

An Octopool AMM contains tokens of the same face value and allows for the following:

• New tokens can be added to the existing pool.

• Single-sided liquidity provision and withdrawal.

• Any token can be swapped for any other token within the pool (there are no token-pair constraints).

This configuration uses liquidity more efficiently than v1.

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Cross-chain operations via v2

In general, Symbiosis Protocol v2 inherits the logic of v1 for cross-chain operations.

Let's examine how cross-chain operations work with v2 by considering three cases:

1. The source and destination blockchains of a cross-chain operation are not the Symbiosis Host Chain (Scheme 4),

2. The destination blockchain of a cross-chain operation is the Symbiosis Host Chain (Scheme 5),

3. The source blockchain of a cross-chain operation is the Symbiosis Host Chain (Scheme 6).

Case 1

The source and destination blockchains of a cross-chain operation are not the Symbiosis Host Chain.

As an example, let's see how a cross-chain swap MATIC (Polygon) for UNI (Ethereum) goes with Symbiosis v2 (Scheme 4).

Scheme 4: A cross-chain swap MATICs for UNIs via Symbiosis protocol v2

Case 2

The destination blockchain of a cross-chain operation is the Symbiosis Host Chain.

For example, let's examine how a cross-chain swap of MATICs on Polygon for some tokens on the Symbiosis Host Chain is processed through Symbiosis v2 (Scheme 5).

Scheme 5: A cross-chain swap via Symbiosis protocol v2.

Case 3

The source blockchain of a cross-chain operation is the Symbiosis Host Chain.

For example, let's examine how a cross-chain swap of tokens on the Symbiosis Host Chain for UNIs on Ethereum is processed through Symbiosis v2 (Scheme 6).

Scheme 6: A cross-chain swap via Symbiosis protocol v2.

Important: As you can see, the Symbiosis Protocol uses a number of liquidity pools to perform cross-chain operations. However, only Octopools belong to the Symbiosis protocol.

Cases 3 and 4 are exactly how cross-chain operations occurred in Symbiosis Protocol v1, with one difference: Symbiosis Protocol v1 used classic, nerve-like liquidity pools.