hashport is an enterprise-grade public utility that facilitates the movement of digital assets between distributed networks. In other words, hashport helps to move your assets from one ecosystem to another. In the case of the Hedera Network, hashport helps to migrate a variety of assets from chains like Ethereum, BNB Chain, Polygon, and Avalanche to the Hedera mainnet and the other way around.
This article tries to explore more in depth what happens to your assets when using hashport. In essence, there are three critical processes involved in order to provide cross-chain interoperability: locking, minting, and burning of tokens. These functions ascertain that value can be represented on foreign networks without double-spending or artificially adjusting the token supply of a given token.
Locking Tokens:
The first step involves sending your assets from the native network onto hashport. This action takes place to safekeep the tokens from the originating network and prevents them from being utilized in any other way while these tokens exist on a foreign network.
Minting Tokens:
In the second step, tokens are minted in the treasury account on the destination network (Hedera Network) which then transfers to sender’s specified Hedera Account ID. The value is derived based on predetermined parameters and then actively procured by those who wish to hold it and believe in its value.
Meaning that after the native tokens arrive at hashport from their originating network, the smart contract that governs the minting process mints the equivalent value onto the destination chain in a token standard supported by the destination protocol.
Burning Tokens:
Thinking about when you want to go back to the originating network, how do you port your assets back? In this step, the tokens that are to be ported back to their originating network first get sent onto hashport, where they will be burnt in order to be taken out of circulation. Coupons successful burning of the representative tokens, hashport releases/unlocks the user’s original tokens back to their originating wallet. The amount of tokens the user receives is the equivalent of the burnt tokens (minus a transfer fee).
Tokens are burnt by sending them to a burn / freeze address to which no person or entity has access to the keys.
Example:
On the Hedera Network the majority of representative tokens have a bracket after the token symbol to symbolize they have been ported via hashport. To exemplify: If a user were to port his OM tokens from the Ethereum network to the Hedera Network, the user would send his OM tokens onto hashport. hashport then locks the OM tokens native to the Ethereum network and mints an equal amount of representative tokens onto the Hedera Network. The newly minted token OM[HTS] would then be sent to the user's wallet and would be readily available to use.
If the user decides to bring his assets back to Ethereum, he would send his OM[HTS] onto hashport, where the OM[HTS] gets burned. After the OM[HTS] has been burnt, the user would receive OM tokens on Ethereum chain back into his wallet.
In case you have questions feel free to join our TG or Discord and ask the admins or moderators directly.
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About HeliSwap
HeliSwap is bringing DeFi to Hedera by launching its first DEX and DAO to unlock the power of Ethereum in the ecosystem, supporting swaps between HTS, ERC20s and HBAR in a cost-effective and permissionless way.
