What is Symbiosis Finance? | CryptoNewsHerald

What is Symbiosis Finance?

Symbiosis Finance is a multi-chain liquidity protocol that allows you to exchange synthetic tokens (Synthetic Token, sToken) between Ethereum, BNB Chain, Polygon, Avalanche networks. In April 2022, the developers will add support for Solana and Terra.

The protocol blocks the cryptocurrency in the original blockchain and releases sToken in another network at a ratio of 1:1. When the cryptocurrency returns to the original blockchain, Symbiosis Finance burns synthetic tokens.

Developers can integrate Symbiosis into applications using Symbiosis JS SDK And Symbiosis Mobile SDK.

Who created Symbiosis Finance and when?

According to the co-founder and marketing director of Symbiosis Finance, Nick Avramov, the project team consists of 30 people, 22 of which are developers.

“The core developers of the protocol have known each other for almost five years. Among them are people from Zerion and a number of other projects. The former team leader of Yandex and the Japanese conglomerate Rakuten is responsible for security. The head of the repeater network development team previously led open source projects in the Russian division of IBM, ”he notes.

In January 2021, the project team began working on the Symbiosis Finance codebase, and in June they started looking for investors. In October, the project attracted investments in the amount of $2 million from Blockchain.com Ventures, Primitive Ventures, Avalanche and others. In February, the venture arm of the Binance exchange invested in the protocol.

On March 9, the beta version of the main Symbiosis network was launched. The team is currently undergoing additional security audits SlowMist, Omniscia and Zokyo.

How does the cross-chain liquidity mechanism work?

The cross-chain liquidity mechanism is a set of smart contracts for swaps between networks. The Symbiosis Finance team deploys them when the blockchain is added to the protocol.

It includes four groups of smart contracts:

• AMM exchange tokens;
• Mint/Burn create and burn tokens;
• Bridge responsible for the interaction between Synthesis smart contracts and the relay network;
• Metarouter invoke contracts on behalf of the user during cross-chain swaps.

Symbiosis Finance uses stablecoin pools.

“The protocol is looking for the most profitable way to exchange on decentralized exchanges – using the 1inch liquidity aggregator in EVM networks and its own solution in blockchains without EVM support,” — comments Nick Avramov.

With this approach, you do not need to install special software. The exchange can be carried out in one click through the MetaMask wallet.

How does the relay network work?

Relay Network – A P2P network of relay nodes that monitor events on blockchains and then sign and send transactions to the respective networks.

To secure the relay network, Symbiosis Finance uses:

• multi-party computing (MPC) is a cryptographic protocol that allows several network participants to perform common calculations without disclosing incoming data;
• threshold signature scheme (Threshold Signature Scheme, TSS) – a cryptographic method for distributed key generation and transaction signing;
• the Proof-of-Bond algorithm is a mechanism in which only nodes that have sent SIS tokens for staking are allowed to sign transactions.

The project team plans to launch the repeater network in several stages. In the early version, there will be 15 nodes that are synchronized using a smart contract in Ethereum.

To run a node, you need to stake SIS tokens. The size of the collateral depends on the stake of other participants, however, it cannot be lower than 50,000 SIS.

What role does the SIS token play in the Symbiosis Finance ecosystem?

SIS – native ERC20 token Symbiosis Finance with an issue of 100 million. Its owners can earn on staking and submit proposals to change the protocol to a vote of a decentralized autonomous organization (Symbiosis DAO).

In October 2021, Symbiosis Finance sold 10 million SIS for $2 million in a seed funding round.

The developers have reserved 40 million SIS for farming, protocol liquidity, auctions for slots in the relay network, and staking.

The remaining tokens will be shared by participants in one private and several public tokensales, as well as project advisors and Symbiosis Finance developers.

What are the differences between the first and second versions of Symbiosis Finance?

In the current version of the protocol, all supported networks have associated pools – Ethereum / BNB, Avalanche / Polygon, etc.

In the current version, the protocol invites liquidity providers to fill individual pools by incentivizing certain swap destinations.

“We are rebalancing pools and incentivizing arbitrageurs to equalize prices when there is high demand for a particular direction of exchange. For example, if users often exchange Tether from Ethereum to Binance Smart Chain, arbitrageurs do the opposite with a premium,” notes Nick Avramov.

In the second version of the protocol, the developers plan to use the sidechain to manage liquidity pools.

According to Avramov, this approach will reduce the costs of maintaining the operation of the protocol and reduce exchange fees.

At the moment, the project team is considering several options for implementing the sidechain. The launch of the second version of Symbiosis is scheduled for the third quarter of this year.