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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 V1.
- 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.
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).
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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.
The main feature of the Symbiosis Protocol V2 compared to V1 is that the liquidity pools {stablecoin, sToken} for cross-chain operations were moved to a servicing blockchain (S-chain). Furthermore, they become one AMM with multiple stablecoins! We call it Octopool. It’s a Wombat-like AMM (Scheme 3).
Scheme 3. Symbiosis protocol V2 with Octopool.
The Octopool AMM allows:
- New tokens to be added to the existing pool,
- Single-sided liquidity provision/withdrawal,
- Any token to any token swap within the pool (there are no token-pair constraints).
Moreover, this configuration allows liquidity to be used in a very efficient manner.
The Symbiosis protocol V2 inherits the logic of cross-chain operations of V1.
Let’s see how cross-chain operations go with the Symbiosis protocol V2. To do so, we should consider three cases:
- 1.The source and destination blockchains of a cross-chain operation are not S-Chain (Scheme 4),
- 2.The destination blockchain of a cross-chain operation is S-chain (Scheme 5),
- 3.The source blockchain of a cross-chain operation is S-chain (Scheme 6).
Case 1
The source and destination blockchains of a cross-chain operation are not S-Chain.
As an example, let's see how a cross-chain swap MATICs for AVAXes goes with Symbiosis V2 (Scheme 4).
Scheme 4: A cross-chain swap MATICs for AVAXes with Symbiosis protocol V2
Case 2
The destination blockchain of a cross-chain operation is S-chain.
As an example, let's see how a cross-chain swap MATICs on Polygon for BOBAs on BOBA BNB goes with Symbiosis V2 (Scheme 5).
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Scheme 5: A cross-chain swap with Symbiosis protocol V2 (MATICs on Polygon for BOBAs on BOBA BNB).
Case 3
The source blockchain of a cross-chain operation is S-chain.
As an example, let's see how a cross-chain swap BOBAs on BOBA BNB for AVAXs on Avalanche goes with Symbiosis V2 (Scheme 6).
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Scheme 6: A cross-chain swap with Symbiosis protocol V2 (BOBAs on BOBA BNB for AVAXs on Avalanche).
As you can see, the Symbiosis protocol uses a number of liquidity pools to do cross-chain operations. However, only one of these liquidity pools belongs to the Symbiosis protocol: Octopool with {stablecoin, sToken1, sToken2, …sTonenN} set of tokens. Octopool is used to bridge blockchains.
Cases 3 and 4, discussed above, are exactly how the cross-chain operations occur in Symbiosis protocol V1. With one difference, though. Symbiosis protocol V1 uses classic Nerve-like liquidity pools.