Introducing oPortal: A Lot More Than Wrapped Tokens
Have you ever dreamed about owning a portal gun like in Rick and Morty that can take you to anywhere you ever dreamed of? Imagine the places, the adventures and of course, the bountiful treasures to be had.
Now, Pepe has invented a crypto portal gun to teleport your favorite token to any chain it wants to go, whether it be ETH, BSC, Polkadot, Avalanche, Solana, Oasis or others. A few blocks, and one click, will be enough to get the job done.
BoringDAO is designing an optimised bridge for each ERC-20 Token, allowing them to shuttle among different blockchains in a safe, fast, and elegant manner. These will allow native tokens to move cross-chain rather than being wrapped. At the same time, we will be setting the new standard for stablecoin swapping. The liquidity of stablecoins on different chains will be gathered together through BoringDAO allowing users to benefit from the low slippage of DAI on Ethereum to exchange for BUSD on the Binance Smart Chain (BSC).
You may have already tried the BoringDAO BSC-ETH bridge. Many people have withdrawn $BOR from Sushiswaps’s Onsen and transferred it to the Pancake’s Farm on Binance Smart Chain through the BoringDAO BSC-ETH bridge.
The bridge will now gradually support more tokens, whether they be ERC-20, BEP-20, or tokens on other smart contract chains.
There are currently 3 types of tokens in the crypto space:
1. POW Coins without an “official team”, such as BTC.
2. Tokens with “official teams” that have not been issued on multiple chains, like UNI.
3. Tokens with “official teams” that are already issued on multiple chains, like USDT.
[Approach to Type 1 Tokens: oToken Tunnel]
For the first type, we have already proposed a 3-layer security mechanism (multi-sig + over 100% reserve + insurance) prepared for BTC. It is perhaps the most decentralized and safest solution currently deployed as most of anchoring solutions of BTC only provide 100% of assets as collateral while BoringDAO provides more than 150% of asset reserve for oBTC.
Want to know more about why oBTC is so great? You can find detailed answers from some early articles, such as Why BoringBTC (link).
[Approach to Type 2 Tokens: Boring Native Bridge]
There is a certain fact behind the assets from types 2 and 3 mentioned above: Tokens issued by official teams enjoy higher credibility than those who do not. For example, USDT — when issued by Tether itself — enjoys the same credibility, whether it be on Omni, ETH or Tron. However, USDT on BSC or HECO chains will be relatively less recognized as they are issued by Binance and Huobi respectively. Thus, if my 12-year-old brother Tom were to create “TomBridge” and issue TomUSDT, the token’s credibility would likely be very low.
Therefore, tokens with an “official team” backing it enjoy the highest credibility.
If an asset bridge mechanically applies the first solution — a wrapped token — some embarrassing problems can arise. For example, if a bridge issues a wrapped Token A on BSC for token A while team A soon after issues their own official token A (Bep-20), then the results could be disastrous. It is impossible for two tokens A’s to coexist on BSC at the same time. According to the theory above, we can know that official token A is more credible than the wrapped token A, and will win out eventually.
It is clear that we need to design better solutions instead of wrapped BTCs. Thus, the “Native Bridge” of oPortal is born.
The issue of Type 2 tokens (Boring Native Bridge) will be simply solved. BoringDAO is completely open and willing to cooperate with any project developer who wants to move cross-chain. Taking UNI as an example, the general logic of implementation is as follows:
1. Alice hopes to transfer 5 UNI tokens to BSC cross-chain;
2. Alice locks 5 UNI tokens in the smart contract of the bridge;
3. The BoringDAO nodes monitor this transaction and mint an equivalent amount of UNI (BEP-20) on BSC at the same time;
4. These UNI tokens are sent to Alice’s BSC address;
The cross-chain process is done, easy and boring.
The only tricky part is: Who will run the nodes?
There are three possible solutions:
1. Set up 1 node, adopt 1/1 consensus, run completely by a single party.
2. Set up 2 nodes, adopt 2/2 consensus run by Boringdao and the project team respectively.
3. Set m nodes and adopt N/M consensus run by the Project team, BoringDAO and more participants.
At present, almost all cross-chain bridges have reached, but then stopped, at the first step. Yes it may be the fastest, but it is untenable in a multi-chain future — similar to the previous example of TomUSDT.
BoringDAO favors the second of the solutions, which combines official endorsement and a guard against malicious additional issuance by either side. Such a solution is optimal because it strikes a balance between ease of use and decentralization since neither of side can act maliciously towards the other.
Of course, decentralization would be ideal as demonstrated in the third solution, but it would cause additional gas fees and increase uncertainty.
Many project teams may ask an additional question: Why do we need to transfer tokens to another chain? To answer these questions, BoringDAO would provide scenario service. Any project that uses BoringDAO’s cross-chain bridges can automatically get support from BoringDAO’s “Satellite City” where users deposit their cross-chain tokens as tunnel over-collateral assets to mine $BOR.
The end result of this process is a bridging of the real native token rather than a wrapped token. Thus, we have named it, The Native Bridge.
[Type 3: Boring Two-Way Bridge]
What about the third solution mentioned above?
What occurs frequently is that Alice has 100 USDT on Ethereum, but needs 100 USDT on BSC to buy new tokens on Pancakeswap .
Currently, the way to solve this issue is not smooth enough. Alice must deposit 100 USDT on Binance, and then withdraw the 100 USDT as BEP-20 tokens to her BSC wallet. We know that until now Binance has kept its systems well maintained, and it is able to provide support for BSC, but what about Avalanche or Oasis blockchains that have no central support team?
At this point, we seek to provide chain-chain instead of chain-CEX-chain solutions.
We want to allow Alice to turn USDT (ERC-20) into USDT (BEP-20) that can be exchanged on BSC with one click on Ethereum rather than a wrapped token like TomUSDT.
How can this be done?
Unlike solution type 2, BoringDAO has neither the right to issue USDT nor to issue Binance-Pegged USDT. Thus, BoringDAO’s solution is as follows:
Since BoringDAO’s system allows for two tokens to transfer across chains freely, the Boring system will issue 2 borUSDT as “Middleware” on two chains. Meanwhile, two stablecoin swap pools are established on the two chains, namely the ERC-20 version of USDT + borUSDT and the BEP-20 version of USDT + borUSDT. The AMM formula is: X+Y=K.
Using USDT as an example, the general logic of implementation is as follows:
1. Alice wants to transfer 100 USDT from Ethereum to BSC;
2. Alice deposits 100 USDT into the stablecoin swap pool of the bridge and obtains 100 borUSDT;
3. 100 borUSDT are automatically deposited into the smart contracts of the bridge;
4. BoringDAO nodes monitor this transaction and mine an equivalent amount of borUSDT (BEP-20) on BSC at the same time;
5. 100 borUSDT are sent into the stablecoin swap pool and converted into 100 USDTs (BEP-20);
6. These USDTs are sent to Alice’s BSC addresses
Now, the cross-chain process is done, easy and boring.
Question is, who will provide the liquidity for the USDT pools on both sides?
1. Deposit USDT to mine BOR (the simplest and direct incentive way)
2. Meanwhile, when the USDT pool on Chain-A is greater than that on Chain-B, cross-chain fees from Chain-B to Chain-A will be relatively low, and may even be subsidized. On the contrary, if there is a large amount of USDT transferred from Chain A to Chain B at the same time, then the fees will increase proportionally.
3. Some of the USDT will be connected to Vaults such as YFI and Autofarm to obtain additional rewards (in version 2.0).
The key thing in this is that this is a real token moving cross-chain rather than a wrapped token. So we will call it the Boring Two-Way Bridge!
There are three ways to move assets cross-chain, and BoringDAO will do them all using its oToken Tunnel, the Boring Native Bridge and the Boring Two-Way Bridge.
We firmly believe that:
1) Ethereum is the most prosperous smart-contract chain.
2) In the future, other chains will establish their own ecosystems,
3) BTC and stablecoins are the “hard currencies” needed for all mainstream chains in the future.
4) The composability of DeFi is something CeFi will never match.
By combining with other DeFi protocols we will launch the next generation of cross-chain bridges. What if BoringDAO allowed your WBTC to become BBTC directly on Binance Smart Chain? What if BoringDAO allowed your DAI to directly become USDT on Solana?
Through integration with other DeFi protocols, the possibilities are endless, such as Curve + BoringDAO Two-Way Bridge + Ellipsis.
If you hold 1 DAI, you can first transfer DAI to USDT in Curve , use the Two-Way bridge to transfer USDT to USDT on BSC, then transfer USDT to BUSD on Ellipsis. All of this can be done easily with very low slippage.
BoringDAO will support many public chains in the future and each of them will run ETH ⇄ other chains. Theoretically speaking, you can use BoringDAO to gather the liquidity of BTC and stablecoins on all chains together. Thus the liquidity of BTC and stablecoins among all chains will be united!
This is the most important part of the BoringDAO V3 oPortal! Ethereum will become the backbone of all chains and all stablecoins and BTC will be able to flow freely on all chains with the soundest liquidity.
BoringDAO continuous to work ceaselessly to expand the horizons of multi-chain DeFi.