Router Protocol Alpha Mainnet launch
In this article, we’re going to take an in-depth look at the Router protocol, its economic model, and a long-term vision for the project. We are pleased to announce that we have launched the Router Protocol alpha mainnet for the public on BSC and Polygon chain.
What’s going live :
To understand how the product will work — we first need to explain two types of assets. Reserve assets and General assets. Reserve assets are those for which the protocol maintains the liquidity reserves. The protocol does not maintain liquidity reserves for all other tokens, which are the General assets. These rely completely on node AMMs for these transfers and swaps.
We will start with a default list of Reserve asserts, to begin with — these are USDC, MATIC, and BNB, as well as ROUTE and DFYN. As we add more chains, we will be adding more stables as well as native blockchain tokens as Reserve assets. Any reserve asset addition apart from stables or blockchain native assets will be the subject of the Router DAO governance.
We have also built a pathfinder tool to help users get the best pricing across different AMMs. We are starting with the Dfyn exchange integrated on the Polygon side and Pancakeswap integrated on the BSC side. We will subsequently be integrating other AMMs in our PathFinder so Router will be able to function as a cross-chain aggregator across multiple DEXes.
Reserve Assets are those assets for which the protocol maintains the liquidity across the bridges. These can further be divided into two classes -
Project tokens [DFYN, ROUTE]: The protocol will allow 1:1 transfers of DFYN and ROUTE tokens between BSC and Polygon with minimal fees involved. The protocol has the ability to mint these tokens on BSC after they are locked on Polygon. Therefore these transfers will be purely 1:1 and will not use AMM on either source or destination. The new tokens which will be listed by using the Router Protocol multi-chain token standard will be part of this category of assets.
Stables & blockchain tokens [BNB, MATIC, USDC]: The protocol will allow 1:1 transfers of BNB, MATIC, and USDC between BSC and Polygon if there is sufficient liquidity in the protocol’s reserves for these tokens.
There are two cases possible when transferring these assets:-
Protocol has liquidity reserves: If the protocol has sufficient liquidity reserves — these assets will be transferred 1:1 and will not involve the usage of AMM.
Protocol has no liquidity for reserve assets: If the protocol has no liquidity to support the transfers — these assets will be acquired using the AMM on the destination chain. Once we have liquidity incentives kicking in for these reserve assets, these types of transactions will become faster and cheaper.
Router Protocol’s transfer and swap module is designed to be as generic as possible and is able to support the tokens for which there is no liquidity at all. These types of transactions are done with the help of AMM. The flow is rather simple:
a.) The source token is converted to USDC on the source chain
b.) The USDC tokens are bridged to the destination chain
c.) USDC tokens are then used to acquire the target token on the destination chain AMM.
General notes for all transfers (same-to-same token transfer) or swaps (token A for token B)
- While the system is designed for cross-chain swaps and transfers, nothing prevents you from using it from same-chain swaps and transfers
- There is a wrapped asset R(asset) introduced in Router Protocol to enable transfer in cases where the asset does not exist on the target chain. Keep in mind that this is NOT asset fragmentation. R(USDC) for instance is wrapped USDC that is completely backed by a USDC on the source chain but is portable to any chain including the source chain. This way, we are introducing a cross-chain stable coin that can be redeemed on any chain that Router is plugged into.
- There will be occasional hiccups due to network congestion on either side (Discord link, TG link for support), the known list of issues (Discord); There are also some occasional RPC issues on the BSC side especially. The fee model is still a work in progress; At the moment, users can pay fees in USDC & Route( on either source chain), BNB & Matic ( on respective source chains. Route fee usage will have a bit of a discount, and we will soon add Dfyn as a fee token as well.
- Keep in mind that this is an Alpha launch, so quite a few components are very much in the launch->learn->iterate loop.
Six months Roadmap
More EVM chains in the next few weeks: We will start by integrating chains like Avalanche and Fantom first and then soon cover almost all major EVM chains.
Cross-chain Explorer: An explorer to see how exactly the cross-chain transfers and swaps happen on different chains. This will give users more transparency and make debugging easier.
Incentivized staking & liquidity mining programs: We will soon introduce various staking and liquidity mining programs for rewarding those who provide liquidity to Router bridge. We plan to introduce them after our pending Hacken audit.
Router SDK: currently scheduled for May 2022. This SDK will include tools for developers to utilize the cross-chain messaging system to build cross-chain dapps. Instead of dApps that function on multiple chains separately, devs will now be able to build dApps that use multiple-chains in tandem. Think lending on one chain and borrowing on another, cross-chain farming and liquidity provision, and more.
Non-EVM chain: We plan to introduce our first non-EVM chain in the second quarter.
Router V2 Prototype: First prototype of the Router blockchain which will be designed as a cross-chain first blockchain with a focus on enabling messaging across chains.
Security — Key priority
Audits: Router has been audited by Certik and Halborn. We are also undergoing a third audit by Hacken, post which we will allow the community to stake their assets in Router.
Bug Bounty: Paired with a large and wide-ranging ImmuneFi bug bounty program, we are confident that Router is ready to hit the road. To date we have paid out over $100,000 to various white hat hackers for their submissions.
Upgradeable contracts: All the smart contracts in the Router Protocol launch are upgradeable contracts that will allow the team to quickly iterate, move, and upgrade the code.
No fragmentation: Router Protocol avoids fragmentation of liquidity by dealing with most of the use cases in native assets and avoids using wrapped assets as much as possible.
Scalability 1-n across bridges: Router is introducing a token launch standard where the projects will be able to launch a token that can be mapped instantly across chains. Projects can therefore use Router to immediately have a multi-chain presence, instead of manually briding across multiple fragmented bridges.
Generic communication architecture: By going beyond just asset transfers, Router will unlock new use cases by providing an SDK where arbitrary messages can be securely passed between different chains in a fast & secure way.
Multi-chain token launch: Allow projects to launch a multi-chain token optimized for supporting new EVM/non-EVM chains.
Stablecoins: Router’s XCLP protocol uses popular stablecoins as the medium of exchange. Even if a user is swapping a non-stable asset across chains, the protocol converts to stables internally to ensure minimal slippage for large transfers.
Pathfinder algorithm: In the event that a user is moving a non-stable asset, the protocol has a built-in liquidity aggregation feature that identifies the most favorable swap rate on the destination chain. This aggregation tool is called Pathfinder, which can be integrated with any DEX on any chain.
ParaRouter: Each chain that Router is deployed on will have a Bridge contract which is called — ParaRouter. When a user submits a transaction, the ParaRouter contract locks stablecoins and broadcasts an event cross-chain that is picked up by Router nodes on the destination chain. When the node picks up the broadcast, calldata is passed to release funds on the destination chain.
Arbitrary message support: A unique feature of Router is the ability to broadcast multiple event types, including ERC20 transfers, ERC721 transfers, and arbitrary message transfers. This makes Router more than a cross-chain asset bridge — it is a cross-chain messaging system that allows data flow that can be referenced by smart contracts.
$ROUTE Economic Model
Users will have the option to pay bridge fees in ROUTE, USDC, MATIC, and BNB. Initially, we are launching with bridge fees of $3.2 for USDC, MATIC, and BNB while bridge fees will be $1.6 if paid using $ROUTE. We are initially introducing a 50% discount in bridge fees if fees is paid in $ROUTE tokens.
$ROUTE: plays an important part in the protocol and will be used for governance, delegation, revenue sharing, and gas fees.
Governance: Holders of ROUTE will be able to participate in governance and shape the future of the protocol by voting on ROUTE proposals for upgrades and parameter changes. This could include fees, chain support, incentives, and more.
Validators use case: Bridge validators utilize a DPoS (Designated Proof of Stake) mechanism, and ROUTE holders will be able to pool their tokens and stake with validator nodes. A small transaction fee will be taken by the Router protocol and will be distributed among the validators and liquidity providers. Initially, the validators will be internal but we plan to make the model more secure by opening the validator door to the public in upcoming quarters. The model will likely involve a minimum $ROUTE holding criteria for becoming a validator on the network.
Gas Token: When transactions are processed on multiple chains, users will have the option and incentive to use $ROUTE as cross-chain gas (instead of each chain’s unique gas token). This greatly simplifies the experience for users and creates a natural demand for $ROUTE tokens. $ROUTE is also accepted as a bridge fees token.
Feedback & Support
If you need transaction level support, you can submit the issue on the transaction level support form.
You can also reach us out on Discord in the help-desk channel.
About Router Protocol
Router Protocol is building a suite of cross-chain liquidity infra primitives that aims to seamlessly provide bridging infrastructure between current and emerging Layer 1 and Layer 2 blockchain solutions.
Application : https://app.routerprotocol.com/
Telegram announcements: https://t.me/router_ann