A Deep Dive Into Biconomy: How Biconomy Is Building Key Infrastructures For Web3
…powering the Devs that pioneer Web 3.0
Introduction
Web3 is designed to be the internet for everyone and is owned by no one. In one word, decentralization. Applications on web3 will interact with one another in a decentralized way and there will be a need for data to be relayed reliably, transferred seamlessly, and stored permanently with high levels of availability. In the Crypto space, Biconomy has positioned itself to solve one of the problems confronting users and developers and this is unconnected from the many problems of Web3 at the moment.
The Many Problems of Web3 and The Place of Biconomy
Outrageous Gas prices and Gas payments for every transaction
If you follow the Web3 trend, you will realize that one of the biggest issues users face is the high transaction fees they incur when they interact with decentralized finance(DEFIs) and Distributed Apps (DAPPs). In crypto terms, they are called gas prices. These gas prices are on the high side due to the congestion on the Ethereum blockchain. The Ethereum blockchain gained a lot of traction due to its efficient use cases and its scalability. Given that loads of projects are launching on the chain, the gas fee is on the high side which makes it hard to onboard people of lesser means who can’t afford the gas prices. According to Harry Robertson, “people are regularly paying more than $100 just to deposit, say, $50 worth of cryptocurrency on Defi platforms — and that’s making many extremely angry.”
Blockchain Complexities and Long Onboarding Process
The user experience (UX) of web3 is extremely complicated for non-techies. Imagine having to add new chains of networks in your Metamask wallet every time. Think of the complicated and time-consuming RPC network setups in your Metamask wallet. What about the Know Your Customer(KYC) process that takes forever on some chains? It is frustrating. Biconomy is here to take away the frustration and the stress that comes with that through the use of a multi-chain relayer protocol and meta-transaction concept. What this means is that through Biconomy’s infrastructures, anybody can access decentralized applications (dApps) irrespective of their cryptographic knowledge, expertise, and practical experience.
Who Is Biconomy?
Biconomy is a web3 technology company with the sole aim of making web3 frictionless. At the core of its ambition is the need to solve the problem that inhibits easy user onboarding. This it aims to do by building a seamless transactional infrastructure for the decentralized web. Biconomy wants to take away the complexities that come with crypto transactions from both developers and users and create a seamless transactional journey for both parties. It has built a series of products over the years that has been used by 90+ Dapps and Defis.
With Biconomy, developers can enable a simple and customized transaction journey that makes user interaction with their DApp easy and fast instead of creating theirs from scratch. All it takes is to make use of Biconomy’s plug-in-and-play Software Development Kits(SDKs) and APIs. Think of Biconomy as the AWS for Dapp developers and users. Just that in this case, it isn’t offering a space for you in the cloud; rather, it helps you save the cost of building an internal relayer infrastructure from scratch. What an internal relayer infrastructure does is to help developers monitor and manage gas prices, keep track of nonces and pending transactions, ensure the scalability of the relayer, and other complex complexities that eat into the resources of the developing team and slow down their development. Biconomy is saying, leave that to us, we have built a world-class internal relayer system that comes with different packages. All you need to do is to plug in and play. What are these packages/SDKs that make up the arsenal of Biconomy?
The Infrastructures Owned By Biconomy
At the moment, Biconomy has 3 world-class products that have been deployed, tested, and are currently in use by 90+ Dapps. They are below listed:
- Mexa- Facilitates gasless transactions
- Forward — Allows Payment in ERC20 tokens
- Hyphen — Allows fast cross-chain transactions
Mexa
Mexa is the solution to the high gas fees on the Ethereum blockchain. It is the first SDK by Biconomy which allows developers to enable gasless transactions. Through Mexa Developers get to enjoy Biconomy’s gas-less and flexible gas payment feature which helps in onboarding users easily. The requirement for usage is for developers to add a few lines of codes in their smart contracts which grant Biconomy the enablement to read any write transaction by users. And when the users sign the authorization, Biconomy relayers will manage the gas and submit the transaction on-chain. The authorization given allows Biconomy to manage the whole transaction for the user. This means there is no need for the user to estimate gas, interact with complicated blockchain UX or own the native tokens of a chain and in some cases, the user does not need to pay gas fees. All he needs to do is to sign and give Biconomy’s relayer the permission to handle transactions. In August 2021, Nord Finance a Defi committed to simplifying investing integrated the gasless feature, creating a frictionless experience for its users.
For developers who are skeptical about editing their smart contract, there is an option that allows them to inherit a recipient contract that can accept validated calls from a trusted forwarder. The trusted forwarder complies with EIP 2771 and verifies signatures before calling smart contract with the original user address data appended. Upon authorization by users, Biconomy acts as a middleman that handles users’ requests before adding them to the block.
For developers who want to enable a gasless transaction for their users, they are required to deposit native tokens in their DAPP gas tank on Biconomy. This ensures that Biconomy relayers have enough gas to pay for the transaction fees on behalf of the users.
Forward
The forward feature enables users to pay gas fees in ERC20 stable tokens. Sometimes users are short of ETH and have enough Eth tokens in their wallet but they can’t make transactions without ETH, therefore they will need to get some ETH for the gas fee. Biconomy is simplifying this whole process by allowing users to pay with their token without owning ETH. In this case, users will not pay their gas fee with Ethereum but with other tokens that are readily available in their wallets. This creates an easy experience for users. It was tested in the test-net by selected users before its eventual Alpha main net launch in 2021 and was successfully integrated with Idle Finance.
At the moment, Biconomy supports only DAI, USDC, and USDT for this feature. Other stable coins will be enabled on the Biconomy platform as times pass by so as to ensure instant cross-chain transfers for users of various dAPPS and DEFIs.
Hyphen
Biconomy’s Hyphen feature enables you to make the seamless cross-chain transfer within an average time of 30–40 seconds. What this means is that you can transfer your tokens on the Ethereum blockchain to a token on Polygon or Avalanche blockchain without spending much or nothing on the gas fee. It offers you a much cheaper way of bridge transfer. This is a solution to the native bridge available on the Ethereum network that slowly processes cross-chain transactions. Biconomy’s Hyphen V1 supports Ethereum, Polygon, and Avalanche, and 3 assets at the moment, and it recorded a whopping $83million worth of cross-chain transfers in 2021. On August 12, 2021, it rolled out its Hyphen Mainnet Program with a promise to airdrop its BICO token to early adopters. You can access the hyphen main-net here
Biconomy’s aim is to be the cheapest and fastest for cross-chain transfers and it hopes to assume this role by constant update and improvement. Speaking of updates, it will add Solana, Fantom, Neon, roll-ups such as Arbitrum, Optimism, and Boba as well as ZK rollup networks to its cross-chain transfer list in 2022.
How are meta-transactions and cross-chain transfers integral to mainstream Web3 adoption?
“A meta transaction is a regular Ethereum transaction which contains another transaction, the actual transaction. The actual transaction is signed by a user and then sent to an operator or something similar, no gas and blockchain interaction is required. The operator takes this signed transaction and submits it to the blockchain paying for the fees himself.”- Solidity Developers,
Breaking it further down, meta-transactions allow the users of a network to sign messages and interact with the blockchain without paying transaction fees. These costs are paid instead through an off-chain relayer and relay hub which interacts with a proxy contract on the user’s behalf. In this context, Biconomy is the relayer.
Meta-transaction is integral to Web3 adoption because of the two important reasons:
- The high gas prices on the Ethereum Network prevents newbies from adopting new Web3 technologies.
- Without meta-transactions, transactions get stuck and their ensues a gas war. The user with the highest gas wins this war.
You can read more on this here.
Can Biconomy Be Trusted?
For a company that is backed by Coinbase, Binance, Coinlist, EdenBlock, trueVentures, Huobi Ventures, rarestone, LedgerPrime, BainCapital Ventures and a host of respected and trusted companies in the crypto space, the issue of trusting Biconomy shouldn’t even be debated. Let’s talk about the 90+ dApps and Defis that are currently using its infrastructures, they are not just restricted to the gaming and NFT niche alone. For the record, Zed run, a digital game horseracing platform that allows users to own, play and earn is the first to use Biconomy’s gasless feature-Mexa, and Biconomy’s cross-chain transfer feature- Hyphen. In 2022, more dApps and Defis will come onboard to use Biconomy’s world-class products.
Launch of BICO: Its use cases and its importance to the relayer infrastructure.
Biconomy launched its BICO token with the aim of securing Biconomy network, enabling community governance, and incentivizing all stakeholders. This is a giant step towards transitioning Biconomy into a fully functional decentralized system that serves everyone and belongs to no one. As seen in a medium article by the CEO/Co-founder of Biconomy Ahmed Al-Balaghi, the end goal is to build a multi-chain relayer protocol that is decentralized, fit for purpose, and removes the need for trusting Biconomy relayers. There will be multiple stakeholders that will power the network such as node operators, stakers, liquidity providers, and more. The decentralized relayer protocol will form the backbone of existing as well as future products. The implication of this is that owning a BICO token gives you a stake in the network. You get to contribute to the DAO community and vote when the time arises. By 2022, BICO holders will have the opportunity to stake their tokens.
Is that all a BICO token can do?
No! Without a BICO token you won’t be able to be part of the Biconomy DAO. DAO stands for Decentralized Autonomous Organization aka Governance. The requirement to be a member is that you must hold BICO token. Without which you can’t vote on issues that the community has deliberated on and seek a consensus on. “Such decisions can include changes to the Network’s code, adding additional services, or decisions regarding the disbursement of its treasury funds. Any $BICO holder can submit a proposal for consideration by the wider Biconomy community” — BICO Litepaper.
Also, BICO token will be used on the different products developed by Biconomy to pay for network fees/gas fees instead of using Ethereum. Other use cases of the BICO token will be rolled out by Q1 of 2022.
The token is currently at a price of $3.54/BICO on Coinmarketcap. It has launched on major exchanges including Binance, Coinbase, Huobi, FTX, Crypto.com.
Summing Everything Up
The journey to the world of decentralization is not far-fetched. Companies like Biconomy have taken the challenge to build infrastructures that will serve as useful tools for the developers that will bring the web3 dream to reality. In my view, this is a three-sum game(if there is anything like that). Biconomy wins by building infrastructures that will stand the test of time. Developers win by leveraging on the infrastructures of Biconomy. Finally, the users win by having a seamless, enjoyable, and frictionless transaction journey as they invest, stake, and interact with web3 dApps and Defis.
To get updated on what Biconomy is building, join their community:
Website: https://biconomy.io
Twitter: https://twitter.com/biconomy
Telegram: https://t.me/biconomy
Discord: https://discord.gg/X2EGFB
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