Biconomy — Web 3’s Holy Trinity & The Odyssey!

June 28, 2022
9
min read
How Biconomy solves the 3 critical issues to realize the dream of web3 mass adoption.

Web 3 — a nebulous term that has gained resurgence lately among sophisticated Twitter threads as — the new age of the internet. The Web 3 moniker promises to win tomorrow’s uncertain and unwieldy digital/financial markets. Much has been established in Web 3, from user-created distributed networks to NFTS that enables artists to bypass mediators and generate value in a more fair digital economy, to P2E games like Axie Infinity and its explosive growth in the post-pandemic era.

What is Web 3 to you?

As defined by David Sprinks and Jeremiah Owyang
Or agree with
Anna Wiener’s view about money in the meta
Or balance around the pillars that make
Web 3 fair in a piece constructed by Cobie

Regardless of the explanation, you pick — we can agree that Web 3 is here to stay — a paradigm shift from pre-computing to post-computing civilization. And while it’s not a tool yet, Web 3 is the promise that the internet should be owned by the people taking part in it. There are very few technologies like web 3 that derive so many fresh concepts, vocabulary, and gameplay.

What Web 3 is not (yet)?

  • Accessible
  • Frictionless user experience and onboarding
  • Interoperable

The current state of web 3 is testing user persistence…

Remember this illustration from 2019 when we first introduced Biconomy and its innovations?

The State of Web 3 Today!

Looking past the buzzword, Web 3, and its utopian promise, there must be a gap that explains why it has yet to reach mainstream adoption. Why indeed? To put it simply — Web 3 is still in its infancy, with many pain points that need to be fully developed or substituted for this space to be relevant for mainstream users.

Bridging Web 2.0 to Web 3 is arduous because the majority of dApps show dependency on creating novel infrastructures that lack maturity — as project churn to tie functional approach and blockchain infrastructures to exclusivity.

Transactional Accessibility in Web 3 is questionable

For the average user, the Web 3 learning curve is pretty steep. People don’t want to run servers, and many of the actions on web3 today require some level of technical skill that’s clearly above average. Forget about bridging a Cryptopunk NFT to Moonriver, some people aren’t aware of how Web 3 wallets work or what gas fee is, or even what Web 3 is!

Interaction with dApps requires users to pay gas before they can execute- send funds, mint NFTs, trade, or join DAO groups. But the gas isn’t even the most vexing surprise — it’s the fact that the gas fees are charged in the blockchain’s own native token — ETH for Ethereum, MATIC for Polygon. Users are forced to engage in an agonizing exchange between varying network currencies and fiat to interact and execute.

For dApps supporting multichain utility with an ever increasingly complex transaction layer, intuitiveness and capital efficiency are compromised to an even greater degree.

Back in 2019, Biconomy foresaw these endgame bottlenecks for DeFi — offering a solution in the form “Gasless” that unclogged transaction speed and efficiency. With the advent of Web 3 today, we’re yet again ahead of the game — the holy trinity of SDKs/API for a frictionless Web 3.

Let’s dive in! But first, a customary overview of DeFi from a 2022 perspective -

Biconomy — 2022

We have come a long since its launch — the journey well documented in our blog post titled Biconomy rewind.

Currently, Biconomy supports the forerunners of Web 3, including Sandbox, Idle finance, Curve finance, dYdX, Decentraland, mstable, perpetual protocol, Aavegotchi, DAO ventures — in total, over 100 partner dApps spanning Ethereum, Polygon, Binance Smart Chain, Moonbeam, Avalanche, and Fantom.

So how do we position Biconomy now?

Biconomy is a transaction/relayer infrastructure platform. Developers can take advantage of our SDKs and APIs templates and add meta transactions support to their Web 3 projects implementing seamless bi-directional interactions between their Web 3 applications and their users.

In the following section, we take a normative approach to explain the three Biconomy innovations that will eventually form the holy trinity of web 3, leading it towards mainstream adoption:

The Future of Web 3 Is⛽️less

One of the colossal ceilings of the blockchain economy that underlies Web 3 is the blockchain’s capacity. Similar to what the magical flywheel of network effects dictates — more utility, more users, → more utility, more users. An antagonistic fashion, sort of like anti-network effects, also dictates more users and less value to one user. The evil behind this downside cycle and other limbic issues such as high gas fees? Network congestion!

However, despite its infancy, Web 3 is scaling fast despite its infancy — at least at the blockchain level. The emergence of L2 solutions, EVMs, app chains, and more in response to the L1 congestion is proof. To that end, as blockchain continues to scale, gas costs are beginning to dampen across different networks. On the flip side, even when gas costs are significantly low or basic (in cents), dealing with these microtransactions (which gets even worse web 3 in-game economies) is no cinch for the average user.

dApp users must often complete the KYC and AML process to execute a fiat to crypto order and pay for gas in the blockchain native token. Not even the DEGENs are degen enough to put up with that…it becomes imperative to explore the emergence of gasless transactions where the protocol and not the end-user cover the negligible gas cost.

The magic lies in what is called — meta transactions — wherein users sign messages (note messages, not transactions) containing information about the transaction that they wish to execute. Third-party systems called relayers then sign the valid blockchain transaction with the information received and send them over to the network, paying for the gas cost sponsored by that protocol or dApp.

Biconomy’s decentralized network of relayers makes this possible. In fact, Gasless enables dApps to implement gasless transactions via three different approaches depending on the nuance that the developer wishes to retain during the implementation:

  • The standard EIP implementation approach
  • Custom implementation approach
  • Smart wallet implementation approach

The true potential of gasless meta transactions often becomes evident in instances such as that of Decentraland users saving $3200 in gas after integrating with Biconomy.

Gasless attracting new users active user growth for Decentraland by 106% in the first six months of action:

Minting NFT for Free — No Longer a Pipedream!

This tweet by rac.eth pretty much sums up the sentiment -

A core example of our meta gasless transaction lies in preparing the stage for sustainable NFT hypercycles. Biconomy’s Free mint features allow creators to mint art and collectibles for free. Users can choose to mint a single NFT for free or in bulk. Users can also transfer, burn and even claim NFTs without paying any gas. More details coming soon about the Free Mint Feature and how it’s bridging Web 2 to Web 3. Stay tuned!

The Way Forward!

Ether, the native token of the Ethereum network and the holy grail of DeFi, — is surprisingly not as liquid as you’d like to think. Paying gas fees in ETH!?….might be a ludicrous idea for an average ETH enthusiast who struggles to aggregate his token holding every single month, carefully allocating a portion of his paycheck until the 0.005 ETH aggregates to 1 ETH sooner than later.

Top that off with the hassle of going through the KYC/AML processes, converting your fiat for ETH, paying head-spinning amounts of gas on the DEX, only to chip away your precious ETH reserves…for what…a milady!? How do you crack into such a relatable and dangerously widespread barrier to entry cost?

You don’t — you simply move Forward (literally).

Forward is a toolset that, once integrated into your Web 3 application, will allow users to pay gas fees in ERC-20 tokens. Forward was developed to answer protocols that cannot support gasless meta transactions but still wish to offer users a reprieve from numerous button clicks and multiple token conversions to paying gas fees.

What’s more — Forward employs price feeds to ensure that users do not overcompensate for gas fees by retrieving on-chain token price data via an oracle aggregator. A good case of forward in action is its recent integration on Sandbox — where players now have the possibility to use their mSAND to pay gas fees on Polygon instead of the network’s native token $MATIC. In addition to Forward, SandBox has also integrated Gasless, allowing users to easily stake and withdraw mSand tokens without having to pay additional fees.

Backstory:

In-depth mechanics and utility of Biconomy’s Forward can be found — Here!

Going Cross-Chain Made🪄Instant & Cheap with Hyphen

Technology is ephemeral.

What is the best technology now may not stay the best forever, which means that the number of these networks will likely continue to increase. All of these new blockchains (plus Ethereum Layer-2 roll-ups) will need to talk to each other, so this necessitates the need for interoperability between these distinct networks.

When data is posted back onto the Mainnet from an L2, Ethereum cannot confirm the transaction in real-time or confirm its authenticity. This results in frustrating delays for users affected by withdrawals from L2 to L1. Moreover, L2 chains prohibit withdrawals until the transaction’s validity is confirmed. Delays can last anywhere between 40 mins to 7 hours before you can access your funds on L1.

We attempt to unify and connect this increasingly fragmented landscape through our third and most recent innovation — The Hyphen. Put simply, Hyphen provides a channel for users to escape confirmation delays by maintaining optimal liquidity on either side of the chains. Hyphen enforces balanced liquidity pools on either side by incentivizing LPs to constantly rebalance the pool and maintain tool predictability and throughput at all times.

Off-chain servers called Executor nodes that constantly monitor incoming transactions to ensure transactions are confirmed in real-time and assets are transferred instantly onto L1 into the hands of the users.

The impact made by Gasless x Hyphen for NFT game Zed_run on Polygon:

Biconomy 2022 — An Odyssey to Web 3

It is easy to get attached to privacy, decentralized, and self-sovereignty ideologies — often viewing them as value propositions. However, the key is to understand that the average end-user does not adopt technology for the same reasons builders might. At BICO, we accepted that notion early on — which is why one of the keys to bridging Web 2 to Web 3 lies within our transaction layer infrastructure. Additionally, technological advancement in Web 3 happens at breakneck speed — and we’re prepared and ready to match the innovation hypercycles.

We believe the next step for us is to scale and fine-tune the three existing functionalities and create additional opportunities for the bicosystem’s growth. We already have several of these plans in action, including the — Biconomy litepaper v2.0, Hyphen 2.0 with a cleaner, sexier UI, Biconomy DAO, and the Gasless staking functionality.

Join the corps as we continue to shape Web 3 for the people!

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