Introduction to Biconomy
Dec 28, 2022
Founded in 2019 by Aniket Jindal, Ahmed Al-Balaghi, and Sachin Tomar, Biconomy is a cross-chain relayer protocol to help dApps and organizations build without having to pay hefty gas fees.
Backed by Binance, Coinbase Ventures, and Stani Kulechov (AAVE), Biconomy seeks to empower Web3 developers to build without limits by providing easy-to-use infrastructure for decentralized applications. At its core, Biconomy is a relay network optimizing user interactions with dApps by obfuscating complex Web3 flows through easy-to-use APIs. Notable features offered by Biconomy include batched and gasless transactions
What is Multi-Chain Relayer Protocol
One of the problems with sending funds across blockchains is that transactions can often get stuck due to competition for network resources. When multiple accounts try to execute transactions on Ethereum, the gas fees required to process the transactions can rise. Miners will then prioritize transactions with higher gas fees, causing those with lower fees to become stuck. To resolve this issue, the stuck transaction can be replaced with a new one that includes higher gas fees.
Meta Transactions
Instead of sending tokens directly to the blockchain, the sender will direct the meta transaction to a third party that takes care of the gas fees.
Biconomy Relayer
EIP 2771 is a standard adopted by Biconomy to send meta transactions.
- Make sure the contract is compliant with EIP2771
- The contract verifies the signature and nonce — a number associated with the transactions on Ethereum of the sender.
- Forward to the recipient smart contract.
Plug and Play SDK
Software development kit (SDK) or application programming interfaces (API) is a set of tools provided by software providers that allow third-party developers to easily integrate with and build services or products on top of the software.
In Web 2.0, due to the complexity of accepting credit card payments online from a technical perspective, online payment providers such as Braintree or Stripe allow any e-commerce company to seamlessly accept payments using their APIs which saves the e-commerce company days, weeks, or even months of work.
Developing decentralized applications can be complicated due to the perceived complexity of blockchain. To resolve this issue, Biconomy’s SDK provides developers with an easy way to build decentralized applications seamlessly.
Since it launched, Biconomy has helped integrate 100’s of dApps helping them to save on gas fees and process more than 17M transactions amounting to $1.4B in volume with notable users including AAVE and Curve Finance.
As part of the pilot program facilitated by the Monetary Authority of Singapore (MAS), multinational Bank, JPMorgan executed its first ever cross-border trade using DEFI on Ethereum’s layer 2 protocol, Polygon with the support of Biconomy’s gasless relayer.
Another use case of Biconomy is the integration with Decentraland’s NFT marketplace. Decentraland is an Ethereum-based metaverse. The marketplace https://market.decentraland.org/ allows for the buying and selling of NFT assets including land and wearables as part of their revenue.
Decentraland reached out to Biconomy in May 2021 to solve 2 issues.
Gas Fees
Everytime a user performs a buy or sell on the marketplace, it requires a gas fee; During the peak of the NFT craze in late 2021 and early 2022, Ethereum gas fees skyrocketed with some reported paying hundred or even thousand of dollars of gas fees per transaction.
Unfriendly user interface
As a result of paying gas fees, multiple steps were required to complete a transaction.
The integration of the Gasless Api by Biconomy, not only helped save more than $300K in gas fees per month, but also removed the complication of the transactions and gas fees for Decentraland’s customers.
Before the integration of the protocol, multiple steps were required to perform a transaction along with high gas fees, after the integration, only one step was required to perform a transaction with no gas fees whatsoever.
Hyphen
One of the biggest problems with blockchains is compatibility, similar to a scenario where you want to use an American Express card on the Visa network.
With the emergence of so many layer 1 chains in the market such as Aptos, Sui, Canto, Alt L1s, Quai, Sei, Linera, and many more, multi-chain interoperability is playing key roles in the normalization of the financial market.
Traditional token “bridging” allows assets to be ported from one chain to another using token bridges. One example of this is the Defi protocol AAVE, which allows Bitcoin holders to bridge their BTC to a chain like Avalanche and leverage their Bitcoin as collateral to borrow stablecoins such as USDC. This solution is ideal for Bitcoin holders looking to gain liquidity without directly selling their assets.
Biconomy’s latest product, Hyphen solves the hassle of cross-chain transfers by allowing users to instantly move funds between Ethereum, BNB Chain, Avalanche, and Polygon within seconds.
Tokenomics
BICO is the native token for the Biconomy Infrastructure and is used for network fees, network governance, and participant fees in the protocol.
Network Fees
Biconomy relayers are carried out by executors whose job is to run the relayer nodes and execute the meta-transactions when a dApp invokes a gasless transaction.
Executors are also responsible for processing cross-chain transactions on Hyphen as well.
In contrast, the validators are responsible for validating the transactions performed by the relayer and recording them onto the Biconomy chain.
Node operators pay a transaction fee in BICO to add any information on the chain while earning BICO proportional to the work they perform on the network.
Liquidity Provider
To facilitate cross chain transactions, the protocol requires liquidity on its supported chains. To incentivize liquidity, BICO tokens are distributed to the liquidity providers based on their overall contribution to liquidity in the pool.
Governance
BICO holders can submit proposals and vote upon decisions including changes to the code and adding new services.
BICO Token Allocation
The total supply of BICO is 1B hard cap.
Community: 38.62%.
Team & Advisors: 22%.
Token Sales: 23.38%.
Treasury: 10%.
Early Supporters: 6%.
BICO token Release Schedules
Integration with VTVL — Token Management
In order to distribute BICO tokens to their stakeholders (employees, advisors, and investors) the Biconomy team developed their own internal smart contract for vesting. Unfortunately, due to insufficient resources for maintenance as well as a limited user interface, issues began to arise with their implementation.
As a result, Biconomy partnered with VTVL to automate the vesting of their employee’s tokens. Founded by ex-venture capitalists and crypto natives, VTVL is a token management platform that makes it easier for web3 companies such as protocols, decentralized autonomous organizations (DAO), Defi, crypto funds, family offices, and venture capitalists to distribute and receive tokens.
More to Come…
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Disclaimer
This content should not be relied upon as legal, business, or investment advice. Please consult your advisors regarding these matters. References to digital assets or cryptocurrency do not constitute investment recommendations. Some information in this blog has been obtained from third-party sources and might contain third-party advertisements which had not been verified by VTVL. Any information in this blog is subject to change without further notice.