Hi Algominters! We ran an AMA in the unofficial Algorand Discussion Telegram channel today with Messina.one to talk about the collaboration between the Algomint and Messina bridges, discussing the differences and the synergy of the two. Here is an excerpt of the AMA.
The AMA was hosted by Michael Jordan and Patrick, joined by Misa, CEO of Algomint; Kai, the product manager of Messina, and Mike, the CTO of the Messina Bridge. Special thanks to all participants!
Q: Can we hear a little overview on what Algomint is? And also what Messina is? Can you tell us about your businesses?
A: Algomint started off as a bridge, and we have built the first BTC and ETH bridges and they remain the largest bridges on Algorand in terms of bridged asset value. We are now developing into a basket model, wrapping like-for-like assets into go assets to maximise the interoperability and liquidity of the wrapped coins, so they all improve in capital efficiency.
Messina is a decentralized bridge between Algorand and EVM chains. We operate based on a liquidity pool model in which native assets are availabe on both sides on the chains.
Q: What is a basket model?
A: A basket would enable the wrapping of different versions of the same token, for example for USD, we enable users to wrap USDC, and soon USDT and BUST etc. into goUSD.
The original assets are stored onchain in smart contracts, and deployed on stable swaps. The wrapped assets — goUSD — is still held by the users and can be used in various places on Algorand. They can also unwrap goUSD back to any of the tokens included in the basket.
Q: Amazing! So with the recent announcement of the partnership between AlgoMint + Messina, can you explain how will this new partnership will work?
A: Messina has developed a decentralised bridge as Kai mentioned above. Instead of creating their own wrapped tokens, they decided to bridge them into goBTC and goETH, so they gain instant utility. This allows the Messina team to focus on building the product and bringing in the liquidity to Algorand.
For Messina, because we are a liquidity pool bridge, we look for trusted partners to provide liquidity on the bridge. Algomint just happens to be one of the most trusted players within the Algorand ecosystem.
Algomint is managing the liquidity on both Ethereum and Algorand by parking some tokens in the Messina bridge contract, and either top up or remove the liquidity depending on what’s left in the contract and the level of user demand.
Q: In what scenario would I use a wrapped token? How does this make sense for me?
A: Wrapped tokens will only have utliity if the provider has made the effort to work with other partners to increase their acceptance and use in the ecosystem. The scenario therefore would be IF the token already has a use case. If not you’ll just be bridging over a wrapped token without any use case.
Another scenario would be if no native token for that asset exist on the destination chain yet. Then a wrapped token would make sense as the first representation of that token on that chain.
Essentially there are 3 different types of tokens in Crypto. 1) Stable coins that are already on multiple chains, and have an established use case and community. 2) “Majors” which are primitive or native tokens of large chains, which aren’t multichain but have an established value and major use case on their native blockchain 3) Utility tokens or other tokens associated with specific projects.
For stable coins and “majors” typically there are already established use cases. For example, goETH and goBTC already have liquidity and use cases in Algorand.
Messina focuses on bridging these tokens based on liquidity models, so no wrapping is required.
In the case of utility tokens for specific projects, the projects themselves would need to create the tokens on other chains prior to integration with Messina, so that there are no wrapped tokens in this use case also.
So when it comes to utility, a token needs to have a reasonable level of liquidity on DEXes and lending partforms. Over the last year or so Algomint have built partnerships with PACT, Humble, Tinyman, AlgoFi, Folks Finance, Exa Market, Cometa etc., and are continuing building more DEX partnerships. There are also derivatives platforms like AlgoRai. Further to that, we’re looking at payment scenarios with NFT platforms like AlgoGem, insurance platforms like DayByDay and Nimble, gaming like VenueOne, Zone, launchpad like AlgoDAO, payment infrastructure like PayScript.
Q: So my next question is for Messina… why did you choose Algomint to partner with?
A: Algomint is an established player in the Algorand DeFi ecosystem, they built the first Bitcoin and ETH bridges and today they remain by far the largest bridges in terms of liquidity, utility, and brand recognition, miles ahead of the second next.
They have put in a lot of effor building partnerships across Algorand and continue to expand use cases with tier Go products
So we reached out to Algomint to discuss the oportunity and found out that we are aligned.
blockchains are disparate communities at the moment, and major value tokens on each chain have specific use cases on the chains they are native to. If you move over one of these tokens onto a chain that doesn’t have use cases it becomes a sort of pointless thing to do.
For example, if you were to move ETH to Algorand, and there are no DEXes or other DEFI that support this new wraped ETH, then. you essentially have a useless ASA.
As a result, Messina chooses to bridge based on liquidity. We select tokens that already have use cases, and just map them. goETH / goBTC already has liquidity and use cases in Algorand.
It makes much more sense to bridge into goETH than try and create yet another wrapped ETH ASA.
Q: Why did Algomint decide to partner with Messina One Bridge?
A: Messina has a robust tech team to build a great product. If you go to https://messina.one/ you’ll see they’ve built a great product, the Messina bridge is simple, elegant, easy to use, and they also bring in WBTC and WETH that’s in the popular ERC20 format which we don’t currently have.
In the beginning, as they approached us, we realized they were going to build a decentralised bridge, which is complementary to our bridge model, as the Algomint bridge requires KYC due to our cold wallet custody provider’s request. So it makes great sense for us to bring in their asests through their channel. They then don’t have to reinvent the wheel, and we get to increase the liquidity of goBTC and goETH.
But there’s another layer.
The reason they needed to build this bridge is that their parent company, AlgoFoundry, wanted to enable Bitcoin and ETH derivatives trading via their options vault, AlgoRai. This is extremely exciting for us, since we are now looking at truly advanced DeFi models that democratise what’s previously primarily available to hedge funds.
Now retail users can do price hedging, enabling a variety of DeFi strategies if they use it to cover other positions. This is the kind of utility we were hoping to see for ASA, as such innovation can truly benefit from Algorand’s superior performance and low transaction costs.
I could go on for hours, but we’ll run further AMA sessions to explain AlgoRai in details to make sure our community can learn averything about AlgoRai.
Q: Since both Algomint and Messina One are bridges… could anyone elaborate on some differences between the two?
A: Messina uses a fully automated defi / decentralized method for bridging. Anyone with a web3 wallet can connect and bridge over supported tokens / ASAs to supported chains.
We are a semi-permissioned bridge but we are looking into making it permissionless. The permissionless part is for users who use use the bridge to bridge their assets. The permissioned part is that since we operate based on a liquidity pool model, we prefer to work with trusted partners that can provide and maintain liqidity on the bridge.
Essentially, both are great solutions for different use cases. Messina is very fast, web3 enabled, decentralized. But due to the liquidity model it places restrictions on you per transaction. For example, if you want to bridge 0.01 btc ($170)… this is fast and decentralized. But it would not be possible to bridge 10 btc for example (not enough liquidity). You could do 100s of transactions, but they fees would be prohibitive.
With Algomint, the users — after passing KYC — will send BTC/ETH to an Algomint address and lock them in the cold wallet. Then they’ll receive the same amount of goBTC/goETH less fees and tx costs. The users can also unwrap goBTC and goETH, geting BTC and ETH back. It’s a centralised bridge with close monitoring from the team.
Another key difference is the tokens to be bridged. There are actually no overlaps. Algomint bridges Bitcoin and ETH from their original networks, whereas Messina bridges WBTC and WETH from Ethereum, both ERC20 tokens.
Q: Can you explain why you chose to bridge wrapped ETH and wrapped BTC?
A: Sure, Messina actually started of with USDC. We wanted to bridge something which had value & utility on most of the chains. Then we included these 2 tokens next because they have the most use cases seeing that they are utilized in Dex pools and defi protocols.
Q: What are the future plans for Algimint and Messina?
A: The vision for Messina has always been seamless interoperability. Meaning we want anyone to be able to go from 1 chain to another without hassle. To achieve that, we have to get around the constraints of the bridge UI and incorporate it into the protocol level via an SDK. The team at Messina are working hard to incorporate all EVM chains into the bridge eventually.
Oh, and we’re also looking at adding NFT bridging and other exciting features in the pipeline.
Algomint is now focused on building goBASKET. Since we started seeing more bridges bing built to Algorand, we wanted to solve the next emerging issue, which is the interoperability between all these wrapped tokens. When you see many versions of USD or Bitcoin floating around, you’ll be confused and realize some of them don’t have utility or liquidity at all. And if you happen to hold them (having built from your chosen ecosystem and bridge), you have to exit in order to get some usage, wasting time and money in the high slippage transactions.
Therefore, we want to create this basket to wrap tokens from different briges (if they qualify and pass our risk evaluation), and we can aggregate their liqudity in go assets, and we continue building utility of go assets via partnerships. The users can wrap any amount of tokens with the baskets without moving the price, which is a great option on top of the DEXes.
We’re going to launch goUSD, goBTC, goETH, and goGOLD baskets in H1 this year.
Messina is a great example of how we collaborate with another bridge — either basketing their own tokens, or letting them bridge into the go assets directly!
Q: Will $WBTC and $WETH be integrated into the $goBTC and $goETH products?
My understanding is that plan for $goBTC and $goETH was to function as baskets like the $goUSD product. Is that still the plan?”
A: Yes, absolutely. We are building a goBTC basket to include WBTC and renBTC, and a goETH basket to include WETH. So take ETH for example, users can bridge WETH from Ethereum via Messina directly into goETH, or wrap WETH on Algorand into goETH via the basket.
The different types of assets do not collateralise each other though, so we don’t mix USD with BTC and so on.
Q: is GoGold the same project as Meld?
A: goGOLD will include $GOLD from Meld as one of the basket tokens, and wrap it into goGOLD.
Q: When is the expected launch?
A: goBASKET for USD should be in Feb/Mar, with other baskets shortly after. We’re working on some final tech details and the front end, then will start audit late Feb. So most likely late March I’d say.
Q: How does the liquidity model bridge work on Messina? Is it a pool?
A: Yes it is a pool. But it is 1 pool for each asset on each chain we bridge to.
In this iteration of Messina, yes, its a simple escrow contract or pool. The liquidity is managed by the partner that has liquidity for a particular token
In future iterations of Messina, its possible that these pools will be a little more feature rich. Allowing for fee sharing, public liquidity, dex aggregation etc.
Q: What will the fees be for bridging?
A: The fees depend on the bridged token. Its 0 for USDC and 0.2% for ETH and BTC. Messina is pursuing a “integrated into Dapps and projects” business model, which allows for projects that want to list their tokens / use the Messina infrastructure, to configure which chains and what fees (could be 0) they want for their tokens. Also, we want projects to build bridging directly into their protocols and Dapps and not rely on our direct to consumer bridging page.
Q: What projects are you planning to integrate with?
A: Basically all dapps that see a need to go multichain. At the moment, we are offering Messina integration to all accelerator projects in AXL and Algorand Ventures. But essentially, we are happy and willing to work with any Algorand project that has multichain needs.
Q: Any final thoughts or words from Algomint or Messina? Where is the best place people can reach both projects? Telegram? Discord? Websites? Email?
A: I would encourage the community to use Messina.one and tell us how we can improve or what else they would like to see on the bridge feature wise. Or even if you can think of another use case for the bridge that we aren’t currently offering yet. We are reachable here: https://linktr.ee/messinaone. Kai’s personal Twitter: @tsekaih
Algomint Twitter: https://twitter.com/Algomint_io
Website: Algomint.io
TG Group: https://t.me/Algomint2
Misa’s personal Twitter: @theactualmisa
