Convert n’ Burn: An Introduction to Wanchain Bridge Discounts and Benefits

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Wanchain

6 min readJun 13, 2024

Wanchain’s unwavering commitment to decentralised interoperability is shared by our passionate community. Together, we have built the industry’s longest-running cross-chain bridge, while setting a new standard for decentralisation and security. With adoption at an all-time high, the time has come to officially launch a highly anticipated new feature — one that benefits the Wanchain community directly by further unifying Wanchain’s cross-chain infrastructure with the Wanchain L1 blockchain.

Convert n’ Burn v1.0

The Wanchain team has spent the past several months experimenting with a variety of different models to optimise the design of Convert n’ Burn: Wanchain Bridge’s fees, discounts and benefits program. The goal of Convert n’ Burn is twofold: to cover the on-chain costs incurred by the Wanchain Bridge and to create value for the entire Wanchain ecosystem. With these objectives in mind, this initial Convert n’ Burn design is supported by two types of fees: a Network Fee and a Service Fee.

Network Fee

The Network Fee is designed to cover the on-chain costs incurred by the Wanchain Bridge. When a user initiates a cross-chain transaction, they only pay gas on the source chain. All transactions on the destination chain are paid for by the Wanchain Bridge. Depending on the chain in question, these on-chain fees can range from fractions of a cent to dozens of dollars per transaction. The Network Fee covers this cost and is adjusted dynamically to reflect current market conditions.

Service Fee

The Service fee is calculated as a percentage of the user’s cross-chain transaction value. In this first iteration, the base Service Fee is set to 0.2%. For example, if a user transfers 100 USDT from BNB Chain to Avalanche, the base Service Fee will be 0.20 USDT. The Service Fee also has lower and upper limits. The lower limit doubles as a security mechanism by disincentivising repeated high-volume, low-value transactions (i.e., spammed transactions resembling a classic DDoS attack). The upper limit ensures that users executing large transactions aren’t unduly punished. In this first iteration, for most assets, the Service Fee’s lower and upper limits are set to $0.2 and $100, respectively.

While both the Network Fee and Service Fee are collected in a variety of different coins and tokens, the collected fees will be converted to WAN coins. In this way, the Network Fee directly addresses the first objective of Convert n’ Burn: to cover the on-chain costs incurred by the Wanchain Bridge. Similarly, both the Network Fee and the Service Fee directly address the second objective of Convert n’ Burn: to create value for the entire Wanchain ecosystem.

Benefitting the entire Wanchain ecosystem

Not only will collected fees be converted to WAN coins, but these WAN coins will be earmarked as follows:

40% will be transferred to a community treasury for management by the Wanchain community*
30% will fund the ongoing operations of the Wanchain Bridge**
10% will be used to incentivise Wanchain Bridge Nodes and delegators
10% will be used to incentivise Wanchain PoS Nodes and delegators
10% will be burned

* Details on community treasury management, including voting mechanism, will be shared at a future date. In the future, the Wanchain community will also be able to vote to change how the collected fees are allocated.

* The fees collected to fund the ongoing operations of the Wanchain Bridge will be held as network coins and stablecoins to cover gas fees on various networks.

Discounts for the Wanchain Community

The Wanchain community is the lifeblood of the project. It is only natural that WAN coin holders should receive preferential terms when using the Wanchain Bridge. In other words, WAN coin holders will receive discounts. Wanchain Bridge discounts function differently depending on the type of network involved in any given cross-chain transaction.

Transactions from EVM networks

For cross-chain transactions from EVM networks (i.e., from Ethereum), if either the sending or the receiving address has at least 10,000 WAN on the Wanchain L1 blockchain, you will receive a discount on the Service Fee. The more WAN you have, the greater the discount. Discounts are tiered as follows:

10k WAN — 10%
25k WAN — 25%
50k WAN — 50%
100k WAN — 60%
500k WAN — 70%
1M WAN — 80%

The address’ WAN balance on the Wanchain L1 blockchain and any WAN that it has staked/delegated to a Wanchain Bridge Node count towards these thresholds. For example, if your sending address has a balance of 1000 WAN and has delegated 49,000 WAN to a Wanchain Bridge Node, you will receive a 50% discount on the Service Fee. Similarly, if your receiving address has a balance of 20,000 WAN and has delegated 5,000 WAN to a Wanchain Bridge Node, you will receive a 25% discount on the Service Fee.

Transactions from non-EVM networks

For cross-chain transactions from non-EVM networks (i.e., from Bitcoin), if the receiving address has at least 10,000 WAN on the Wanchain L1 blockchain, you will receive a discount on the Service Fee. The more WAN you have, the greater the discount. Discounts are tiered as follows:

10k WAN — 10%
25k WAN — 25%
50k WAN — 50%
100k WAN — 60%
500k WAN — 70%
1M WAN — 80%

The address’ WAN balance on the Wanchain L1 blockchain and any WAN that it has staked/delegated to a Wanchain Bridge Node count towards this threshold. For example, when moving 10,000 USDC from Cardano to Polygon, if your Polygon EVM address has a balance of 4000 WAN and has delegated 46,000 WAN to a Wanchain Bridge Node, your Service Fee will be 0.1% instead of 0.2% — a 50% discount!

The Fineprint

The discount also applies to the Service Fee’s lower and upper limits. Without the discount, the lower and upper limits are set to $0.2 and $100, respectively. With a 50% discount applied, the lower and upper limits would be $0.1 and $50.
When selected as the source chain, certain networks with unique technical architectures, such as Bitcoin, Litecoin, Dogecoin, XRP Ledger and Polkadot, will only display a single number comprising both the network and service fee.
While both an address’ WAN balance on the Wanchain L1 blockchain and any WAN that it has staked/delegated to a Wanchain Bridge Node count towards the discount thresholds, WAN staked in PoS Validator Nodes and WAN bridged to other networks are not included.
For most assets, the Service Fee’s lower and upper limits are set to $0.2 and $100, respectively. Exceptions may apply and the lower and upper limits may be adjusted at any time.
CCTP transactions only incur the Network Fee. The Service Fee is completely waived.
In case of any discrepancies, the fees listed on bridge.wanchain.org shall prevail.

The Unification Era

The introduction of Convert n’ Burn continues to align Wanchain’s industry-leading cross-chain infrastructure with the Wanchain L1 blockchain while laying the foundation for greater community ownership. Bridge Fees also help to establish a sustainable mechanism to drive the long-term development of the Wanchain Bridge while directly creating value for the entire Wanchain ecosystem. By converting collected fees to WAN coins and returning them to the community, every single member of the Wanchain community benefits from the success of the Wanchain Bridge. The fact that the Wanchain Bridge will now burn WAN only furthers this point. Indeed, Convert n’ Burn marks the dawn of a new era for Wanchain, one defined by unity and driven by the community.

About Wanchain

We are all connected — Wanchain, the Wide Area Network chain, is the world’s premier decentralised blockchain interoperability solution. Our mission is to drive blockchain adoption through interoperability by building fully decentralised bridges that connect the world’s many siloed blockchain networks. This cross-chain infrastructure empowers developers to build truly decentralised cross-chain applications to power the future of Web3.