Context

At first glance, Symbiosis performs any cross-chain swaps with the same ease and efficiency. However, when delving deeper, it becomes apparent that Symbiosis utilizes stablecoins when it comes to bridging (shifting from one network to another).

For example, an exchange of UNI on Ethereum for CAKE on the BNB chain actually looks like this: (UNI for USDC) on Ethereum -> Bridging with Symbiosis -> (BUSD for CAKE) on the BNB chain.

This approach is effective for cross-chain swaps where the source and/or destination token is a stablecoin or any token other than a native cryptocurrency (a cryptocurrency that is used to pay transaction fees).

However, inefficiencies arise when it comes to another common type of cross-chain swap involving ETH or wrapped ETH as the source and/or destination token. The current bridging on stablecoins means that ETH should first be swapped for stablecoins, and then the stablecoins should be swapped for ETH on the destination chain. But too many intermediate swaps lead to high on-chain and cross-chain fees: specifically, DEX fees for exchanging ETHs for stablecoins, and gas fees for additional calls on contracts. In such a case, users are likely to use a bridging protocol other than Symbiosis. The list of popular blockchains where ETH is widely used is impressively long: Ethereum, zkSync Era, Arbitrum One, Arbitrum Nova, Optimism, and Polygon zkEVM, etc.

Proposal

Introduce bridging on ETH for cross-chain swaps involving ETH or wrapped ETH. The development includes the following:

• Tune Symbiosis core contracts to accept wrapped ETH.
• Add a new Symbiosis Octopool for synthesized ETH tokens from supported blockchains on the host chain.
• Add the support of bridging on ETH in Symbiosis SDK.
• Enable the bridging on ETH for the following blockchains: Ethereum, zkSync Era, Arbitrum, Arbitrum Nova, Optimism, and Polygon zkEVM.

Key Points

• Bridging on ETH will provide better rates for cross-chain swaps involving ETH or wrapped ETH, which will increase the transaction volume and overall token amount passing through Symbiosis.
• TVL of the Symbiosis protocol will increase. Fortune is on the side of the big numbers.
• In case of stablecoin unpegging, the Symbiosis bridging could be switched from stablecoins to ETH. Moreover such a bridging will be the true solution for the DeFi world.