Token Migration using Relay Bridges
There are multiple blockchains in the market, and all of them work with different consensus mechanisms. Because of differences in the consensus mechanisms of various blockchain protocols, cross-chain communication for token and data transfer becomes difficult, and thus the interoperability is hindered. To solve this conundrum of interoperable and decentralized token transfers, blockchain bridges are the perfect solution. With guaranteed security and efficiency, blockchain bridges work in different approaches, for instance, smart contracts/ code audits, hacker surveillance and decentralization of the relayers during a cross-chain transaction or operation. Different networks follow different ways to blockchain interoperability, leveraging token migration. This does not involve any centralized solution or intermediaries. Relay Bridges is one of the most reliable and preferred approaches for cross-chain communication or token migration. Let’s now understand how Relay Bridges power the token migration interoperably.
Table of Content:
- What is a Relay Bridge?
- What is Relay Bridge Gas Token Index?
- What is Token Migration?
- How to do Token Migration using Relay Bridges?
- What are the Benefits of a Relay Bridge?
What is a Relay Bridge?
Relay is defined as the cross-chain ecosystem built to innovate BaaS (Bridging as a Service), helping bridge the most fragmented DeFi liquidity space. The distinct quality of the Relay bridge is that when a unique ecosystem is built, their bridge connects the asset and the ecosystem to all the supported platforms with different consensus protocols.
Relay bridge offers spontaneous and minimum cost transactions and token migration. It currently adheres to the liquidity exchange to similar addresses between different blockchains. Therefore, a Relay Bridge is a seamless bridge between various blockchains with distinct consensus mechanisms, allowing them to transfer their respective platform tokens between various layer-1 networks. The Relay bridging currently supports platforms like Ethereum, BSC, Avalanche, Polygon(Matic), and Heco.
Relay bridges have innovated the concept of bridge gas token faucet to DeFi. The bridge independently airdrops the native token to the various new users. The bridge gas token faucet to DeFi thus reduces friction, helping the new users leverage a seamless cross-chain transaction initiating the process on different chains. Relay Bridge connects DeFi with the most distinct tokenomics model that gives gas token rewards(MATIC, HT, ETH, BNB and AVAX), which coins the Gas Token Index. Talking about Relay Bridge, it also collects fees and rewards to those who provide liquidity. A considerable amount of the fees also goes into buying and burning the Relay token back, turning it into deflationary.
What is Relay Bridge Gas Token Index?
Relay Bridge Gas Token Index refers to Relay’s distinct gas rewards for the liquidity providers. Relay Bridge pays in the native gas token( Gas Token Index). In another way, it can be understood as one providing liquidity, and they are getting paid in native tokens. This process is not initiated by anyone else in the bridging space, and it powers our token holders by adding value to them. Gas Token Index eliminates the selling pressure and rewards in the form of tokens that have liquidity, giving the token holders a vast choice. The token holders can hold the Gas Token in investment, allowing them to sell and buy alt tokens. This empowers the person with keys concerning the token transaction.
What is Token Migration?
When one token project switches from one Blockchain to another, its tokens must also be transferred to the new network. This is known as token migration. Token migrations grew more widespread in 2018, following the peak of the Initial Coin Offering (ICO) wave from 2017 to 2018. An ICO is a type of fundraising approach in which a project produces a token that can be acquired by those interested in investing in the project’s future technology.
The procedure of moving tokens differs depending on the project. If you keep your tokens in your possession, you may be obligated to begin the migration yourself. However, this does not always implicate that you must comprehend the details of code. Most companies provide tools that link to your cryptocurrency wallet and allow you to move your tokens with a few clicks. Other projects have already collected pictures of all token holders’ balances on a specific date and issued replacement tokens on the subsequent chain in accordance, with little or no active engagement required from the users entitled to receive the allocation.
Suppose you maintain your tokens on an exchange. In that case, the exchange will most likely handle the token transfer procedure for you, especially if the exchange is a significant, well-established participant in the crypto sector. However, this is not always the case, so you should double-check with the project executing the transfer and your exchange to confirm that it engages in the migration.
Furthermore, some projects have cut-off dates for token migrations, which means you won’t be able to move your tokens after a specific period. In many circumstances, this essentially renders old tokens worthless after the cut-off date. To keep up with all the trending innovations, make sure you subscribe to all the project updates. With the ongoing drive for blockchain interoperability and compatibility, token migrations and tokens operating on different chains will likely flourish and acquire popularity within the emerging blockchain ecosystem.
How to do Token Migration using Relay Bridges?
Relay Bridge consists of different relay nodes that are reliable for maintaining the liquidity in the Relay Bridge. These nodes have ample liquidity on the side chains that assist in seamless liquidity transfer across different blockchains.
For instance, when a user initiates a token transfer from chain A to chain B, the assets are initially sent to the relay node on chain A. Then, the relay node sends the same amount of tokens to chain B and maintains the liquidity on destination B. Later, the bridge uses Hashed Time Lock contract that secures the bridge transaction. It assures users fund security even when the relay node reflects some malicious behavior. Currently, the network gateway server automatically chooses the relay node. And it is dependent upon the past relay success rate, the transaction fee charged, and the number of relayed transfers done by the relay node.
Token migration using Relay Bridge:
To access the Relay Bridge, users need to connect with their Metamask Wallet:
Connect to the wallet and then select your preferred platform/network. Choose the source and the destination of the network. Then choose the token and fill in your choice of the amount that you want to transfer. The application will then reflect the number of tokens minus the network fees you will get in the destination network. The network fee is given to the relay node for initiating the transaction.
The next step is to transfer the funds. Fill in all the required details and approve the token before initiating the migration/transaction. Then confirm the Metamask transaction and release the funds from your end.
Add the destination network details manually in your Metamask wallet to view the token. To process this, go to the settings of the network, then click on add network and insert the below-mentioned information:
- Chain ID
- Network Name
- New RPC URL
You can view the token balance of your destination network by copying the token contract address and adding it to the custom token contract address.
What are the Benefits of a Relay Bridge?
Relay bridges help in blockchain interoperability between different Layer 1 networks, main chain and a side chain, permitting users to leverage the benefits of every network without losing the advantages of the host chain. Below mentioned are the various advantages of a Relay Bridge:
- Cross-Chain Collateral
Relay bridges help users transfer digital assets from one blockchain network to dApps of another with different consensus mechanisms for additional liquidity.
Relay bridge is designed for spontaneous transactions in maximum volume without affecting the aspect of liquidity. The congestion is minimized, and the scalability is increased using the Relay Bridges.
Users can engage in token migration and micro transfers instantly without giving high transaction fees. This makes the Relay Bridges economically friendly to leverage cross-chain transfers and migrations.
Relay Bridges helps achieve interoperability between multiple blockchain networks with different consensus protocols and between one parent chain and its offspring chain, called the sidechain. Relay Bridges allows interoperable token transfers, data transfers, digital asset transfers, and smart contract instruction transfers between two different platforms. It empowers the users to deploy digital assets hosted on one chain to dApps on another, helps in an instant, low-cost transactions of tokens hosted on a lesser scalable chain and initiates the dApp execution on multiple platforms. Relay Bridge is thus a robust solution for interoperability in blockchain technology.
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