After months of contemplation, arduous work and receiving several requests from our investors and token holders, VAIOT has created the Binance Smart Chain Bridge Smart Contract. Before delving into the VAIOT BSC Bridge, let us have a quick look at the Binance Bridge General Project.
The Binance Bridge Project aims to increase interoperability between different blockchains and allows anyone to convert their crypto assets to and from the Binance Chain and Binance Smart Chain-wrapped assets. That is helpful because users can utilize their BTC, ETH, USDT and other assets in the Binance Smart Chain (BSC) Dapps — opening more use cases and lowering transaction fees.
BSC Bridge Description
The VAIOT ETH to BSC Bridge will be deployed as two identical smart contracts on Ethereum and Binance Smart Chain networks. Smart contracts will enable interactions between the two chains to let token holders deposit VAI Tokens to them. Depositing and locking VAI Tokens in one of the smart contracts will emit an event used to approve a withdrawal of the same amount of VAI from the second smart contract to the same wallet address while locking up the same amount of VAI Tokens from the current chain in the BSC Bridge Smart Contract. And thus, making sure that no tokens are duplicated.
After approval, the withdrawal will become available to the user meaning he will unlock the same amount of VAI Tokens on the other chain. Self-hosted Ethereum and BSC nodes will be used to subscribe to the Smart Contract events. The swap process will use a unique nonce mechanism to prevent users from malicious actions.
Reason for Implementation
After careful consideration, VAIOT has decided to implement the VAIOT BSC Bridge because the implementation will offer us several new technical, developmental, and marketing opportunities. One example is the VAI Token’s potential to be available as a BEP20 version, meaning VAI Tokens can be listed on BSC supported decentralized exchanges, which serves a range of benefits for traders, token holders, and future investors. The Binance trend and the additional exchanges will increase brand awareness due to higher visibility and inclusiveness of different chains.
From a technical perspective, the implementation of the BSC Bridge is an attractive project because, as of now, BSC is more advanced than ETH. BEP20 tokens (the BSC asset standard) can be transferred faster due to the number of transactions that can be completed on the network at any given time. The ETH chain transaction fees are also very high, causing problems for token holders and investors. Additionally, the interoperability possibilities are much higher as developers can hard fork from BSC to other networks.
Finally, BSC’s scalability is high in comparison to Ethereum. By creating the Smart Contract Bridge, VAIOT creates new opportunities for its stakeholders, such as building DApps. When we look at the implementation from a long-term perspective, VAIOT might even be able to implement its services, such as the AI Aggregator and Broker, to go live on BSC.
For VAIOT token holders, the best reasons for implementation is the opportunity to trade on more exchanges such as the highly popular DEX PancakeSwap, offering the ability to make transactions faster and cheaper. They will also enjoy the benefits of the added interoperability that our token will adopt.
The Benefits of the BSC Bridge
Increased transaction performance and lower transaction costs
Now that we have discussed the reason for implementation, it is imperative to let us look at the technical benefits that the BSC Bridge offers. First, the bridge has a significant impact on the transaction performance as that will boost the speed at a lower transaction cost than transactions on the Ethereum network.
Easy asset swapping experience
It is also possible to provide a simple SWAP asset swapping experience for token holders since the different in-between parties will be eliminating extra steps and third-party involvement.
Then there is the interoperability; the BSC Bridge solves many technical scaling limitations by interconnecting various blockchain networks. VAIOT will no longer be isolated in the Ethereum Network but can expand its use cases and reach instead.
The Potential Risks of the BSC Bridge and Mitigation
Are there any specific risks involved with the implementation of the BSC Bridge? The risks involved with adding such a bridge include extended and perhaps a more complicated technological framework, since the token will now exist on two blockchains at once, meaning it will be available as ERC-20 and BEP-20 token. This however is a similar scenario to the one which is described in the VAIOT’s Whitepaper where a bridge between ETH and VAIOT’s proprietary blockchain-based on Cosmos SDK was described in-depth and risks associated with such a bridge were analyzed. Nevertheless, the introduction of such an extended technological framework has to be consulted in regard to VFA regulation.
In order to ensure we are following all guidelines; our VFA Agent will be guiding us through each step of the way to ensure we are adhering to all regulatory protocols. This added technological framework can potentially offer benefits for token holders by allowing for future adaptations to be implemented much easier.
VAIOT’s BSC Bridge is a two-way bridge connecting the Ethereum network with BSC. The technical design of the VAIOT BSC Bridge as described in the “BSC Bridge Description” part of this article ensures that once the tokens transferred from one chain are locked in the Bridge the exact same number is unlocked on the other chain meaning the risk of the existence of two the same token units at one time is eliminated. Since each swap between ETH and BSC network is associated with a transaction cost typical for blockchain networks it reduces the possibility to juggle token holder’s tokens back and forth. To be very straightforward a particular token unit exists in circulation only on one network or the other, never on both.
There may also be the issue of arbitrage, which could cause deviations in token price between the two networks due to BSC being more attractive for traders and token holders, meaning potential differences in volatility vs. The Ethereum network. It is important to say that the arbitrage happens and will happen either way as a natural element of self-regulation of the market where the token is listed on multiple exchanges and exchangeable through multiple platforms which causes the price arbitrage to become a strictly market-related mechanism that VAIOT cannot influence. To add to that just because BSC has advantages in the form of lower transfer cost vs. The Ethereum network it does not necessarily mean the price deviations may be significant plus the self-regulating market mechanism will take care of the arbitrage.
The Bridge could also provide benefits to holders by giving them the opportunity to take advantage of both blockchains, with transfers on BSC being much cheaper, benefitting holders who do not want to pay larger fees for transfers, staking, and swaps. With that said, BSC can also be looked at simply as a hard fork, meaning from a technical and security standpoint, the BSC bridge does not present any risks to investors or token holders once the bridge has been thoroughly audited.
In order to ensure that this option is subject to standards that are equivalent to those governing the technology arrangement forming part of VAIOT’s initial virtual financial assets offering, VAIOT has asked the auditor of the same system to perform a systems audit of the technology arrangement making up the said BSC Bridge.
Finally, VAIOT is aware that some confusion may be created in view of the VAI Token existing on several blockchains. In order to mitigate such risk, our marketing team has a strategy in place to notify investors of the implications of such a bridge. In terms of milestones, VAIOT does not anticipate that the BSC bridge will impact the Whitepaper, meaning token holders can be confident that VAIOT will deliver each milestone as listed on the roadmap.
BSC Bridge Step-By-Step Guide
The BSC bridge enables you to swap VAI tokens on the Ethereum Network (ERC-777) to VAI tokens on the Binance Smart Chain (BSC, BEP20 tokens). However, before you get started, it is important to note the following aspects:
- You’ll need a wallet that can hold tokens on the Ethereum network and on the Binance Smart Chain to connect to our site, like Metamask.
- You’ll also have to hold $ETH and $BNB tokens to be able to pay gas fees on both networks.
- Please make sure that ahead of using the bridge, you fully understand the accompanying blockchain technologies and the consequences of trading and swapping $VAI Tokens.
Finally, you’ll need to send your $VAI assets from your Ethereum wallet to another Ethereum address and then retrieve your transaction from a BSC wallet to your BSC based wallet (or vice versa).
When you open the bridge page (available on the 1st of June 2021), you’ll see a screen similar to the one below.
Next, select the ‘Connect’ button top right to connect your wallet to the VAIOT website. This will give you the following options:
Select the wallet that you intend to use and click on “Confirm” in the wallet that you’d want to connect.
Once connected, you should confirm this by looking at the top right of the webpage. The webpage will also illustrate the amount of $VAI Tokens available in your wallet (in this case, on the Ethereum Network).
You can now get started!! 🎉
Please note: if you want to swap your assets from BCS to ETH, you’ll need to adjust your wallet to Binance Smart Chain. Logically, the pages will adjust according to whichever wallet you’ve selected.
Keep in mind that first-time users will be asked to pay a small fee; this is a necessary step that illustrates your approval of the bridge contract to withdraw funds from your wallet. If you want to swap both from BSC to Ethereum and Ethereum to BSC, you will need to pay the fee for both first transactions.
Once you’ve approved the fee, you can start swapping! Enter the amount of $VAI that you’d like to swap and select “Swap VAI”.
After carefully studying the transaction data, select “Confirm” to verify the transaction and gas fee. If successful, your wallet should give you a message such as the one below.
Once the transaction is completed, you will see an automated message telling you that there are unclaimed $VAI assets in another network. Please note that the first transaction may have been successful, but we are only halfway!
Next, it’s time to switch your wallet from (in this case) Ethereum to the BSC Network. Once the webpage has recognized the change, you should see a similar page to the one below.
Now click the retrieve button; once you confirmed the transaction and gas fee in your wallet, you will get a page like the one below.
Once this second transaction has been processed, the swap is complete. You now have $VAI Tokens available for trading on the BSC network! Congrats!
BSC Bridge Approval and Regulation
First, the BSC Bridge had to be notified, discussed, analysed and approved by our VFA Agent — Grant Thornton. VAIOT had to prepare a detailed description of how the Bridge would work, the risks and benefits for the token holders and send it to MFSA for approval. In the meantime, the BSC Bridge contract code was sent for code audit by an authorized audit company. Once the MFSA approval was received and the BSC Bridge code was audited, the company continues with the deployment of the BSC Bridge testnet and internal testing, which will lead us to the BSC Bridge going live.
Side note: Please do not send BEP-20 VAI assets to exchanges!!
Disclaimer: Please note that all cryptocurrencies carry a prominent level of risk and may not be suitable for all investors, and there is the possibility that you will lose are your invested money. Before trading crypto assets, you should always do your research and carefully consider your investment objectives, level of experience and willingness to take the risk. Furthermore, any opinions, news, research, analysis, r other information in this article are provided as general information and should not be considered financial advice.