Deep Dive: Biconomy
After the usual lunch session gossip, a group of colleagues is now discussing a new GenZ topic.
Steve: Guys, remember I told you about a game on Web 3 last week. Yesterday I sold one of my NFT from that game for a whooping 2000$ which I had bought for just 50$. It’s so much fun playing and making money. I think you all should also give it a try. John, especially you since anyways, you waste so much of the time playing FIFA 😁
John: Ohh that’s some nice money 💰. But I don't even understand the ABC of Web 3 or Cryptocurrency. Anyways, ping me the name and I will give it a go tonight. How difficult it could be if a noob gamer like you can do it…just kidding 😆
Sonia: John, let me know how it goes. I will also try it later.
John checks out the website of this game. After exploring the landing page, he finds it interesting and clicks on the “Play” button. It asks him to connect a wallet. Confused with the next step, John picks up his phone and calls Steve.
John: Hey Steve, I was checking out the game. It’s giving me a popup to connect a wallet. What’s a wallet? Is it some crypto equivalent of an Email address that I need for registration or creating an account?
Steve: No No John, a wallet is not Email equivalent for Web 3. Let me give you some quick steps to start and then it should be easy for you. Just download the wallet, set up your profile, buy some ETH and native L2 Tokens from an exchange, transfer those tokens to the wallet. Link this wallet to the game, start a transaction, add gas fees, and you are ready to play after 30–40 minutes. And yes, don’t add too much gas fees. Also, don’t forget to add the correct nonce, else it might fail. Ohh and I forgot about the wallet keys, please store them safely. You might end up losing a fortune if you forget it.
John: Ohhohoho, wait wait. What is all this? Am I setting up a nuclear bomb? I just want to play the game, my friend 😛.
Steve: Don’t act like a boomer Steve. It’s not rocket science 🚀. Just go to YouTube and you will find dozens of videos on setting it up.
John: Lol, thanks Steve for suggesting YouTube. I had once watched a video on “How to be a millionaire in a Month” on YouTube and that surely worked out pretty well 😝
John downloads the wallet and adds his details. The app pops up a note with private keys and suggests writing it down and storing it safely.
John: Now what are these keys😰? This definitely looks like nuclear codes 💥. Ahh, chuck it. Let me go back to my FIFA ⚽️.
The next day at the office lunch.
Steve: So John, how was the game, did you enjoy it? Did you buy any NFT?
John: Hahaha, Game, NFT, reallyyy!!! I didn't even manage to set that wallet thing. It’s not meant for me, too complex. Last month you had mentioned Web3 is a game-changer, it will change the way we use the Internet, it’s revolutionary, blah blah blah!!! It would not let me play a single game 😒.
Steve: Lol ok. Go back to your dumb FIFA.
Sonia: If John couldn't do it, then no chance in hell I can do it. I think this Web3 is meant only for GenZ.
Disappointed with the experience of Web 3, the colleagues go back to the usual office gossip.
So in the above scenario who all lost?
GAME / dApp owners who lost a potential user even after he visited their website and wanted to try it. To make it worse, the Game/dApp got into the spiral of negative Word of Mouth. Like Sonia backed out after listening to John, many more potential users might also get a negative perception after hearing about the bad experience.
John, who lost an opportunity to be part of Web 3
Web 3 adoption is suffered.
If this experience had been more user-friendly for Crypto newbies, John and many such users would have definitely been part of the Web 3 community.
In Web 3 dApp, onboarding is a very complex, scary, and frustrating experience for a new user. Just in case the user is successfully onboarded, things like calculating appropriate GAS fees, managing multiple transactions, handling failures, high transaction waiting time, etc., kill the user experience. This results in losing the acquired user and a further negative word of mouth.
But isn’t this complexity part and parcel of Blockchain transactions? So how can we avoid it?
Enters BICONOMY.
Biconomy is a Next-Gen Multichain Relayer Protocol that enables seamless interactions between your application and your end-users.
John: Ohhohoho, wait wait. What is all this? STOP with all this gibberish.
John, you can sit back, relax and enjoy your FIFA. Very soon, Web 3 is going to get easier than you could even imagine. With this article, we will empower the founders and developers on how they can revolutionize the Web 3 experience using BICONOMY.
To improve user experience and reduce complexity which would increase user adoption in Web 3, a few solutions came up.
Problem: Nobody would like to remember or maintain their Hexadecimal address
Solution: .ETH Domain name service.Problem: Browser extension based wallets accessibility
Solution: Wallet Connect, Magic wallet providing mobile solutions.Problem: Transaction Layer related Problems (Elaborated below)
Solution: BICONOMY solves issues related to Blockchain transaction complexities.
Now let’s briefly look at a few of the problems an application faces at the Transaction Layer.
GAS fee is required to be paid every time a user interacts with the underlying blockchain of your application.
Volatility of GAS fees would vary based on network traffic.
Handling pending and stuck transactions due to network congestion. Also leading to long waiting time for users.
GAS fees can be paid only in ETH. All end users might not have ETH or even if they have it, they might not be willing to spend it on your app.
Complexity of transactions increases if the application has a multi-chain use case
Sending tokens on behalf of another address is a complex operation
Individual applications can solve all the above problems by developing an internal relayer infrastructure, but it will take an enormous amount of development efforts. Instead, if these efforts are channelized in enhancing and building the application features, the app can get a competitive advantage in its domain. So now, you can focus on your core product and choose Biconomy to take care of the problems mentioned above.
BICONOMY is a one-stop-shop for solutions to all the above problems, and on top of that, it also provides features which will make onboarding a seamless experience for Crypto newbies as well as crypto proficient.
Below are a few key features of BICONOMY which we will review in detail.
Gasless experience or sponsored transactions with options to customize
Optimized GAS and never overpay
Use of Meta-transactions to reduce blockchain transaction complexity.
Cross-chain operability which is transparent to end-user
Instant cross-chain transaction with no waiting time
Handling pending and stuck transactions ensuring confirmed transactions.
Pay for GAS in favorite ERC20 tokens like USDC, DAI, USDT.
Dashboards to review your GAS spent, dApp activity, transaction history.
Developer friendly with plug and play solution
Scalable Relayer Infrastructure
1. Gasless Experience
Imagine you are the founder of the GAME in the above lunchtime conversation. If you are given an option that when users like John wish to try out your GAME, you can pay for their initial GAS fees. Layer 2 is cheap, and you can afford the GAS fees for new users until they like your game and later buy a subscription. This is similar to any existing Web 2 Games today, where trials are free and users pay for premium features.
Alternatively, you can get a sponsor who agrees to pay for the GAS fees in return for some advertisement. It’s a Win-Win for everyone.
You acquired a new user. High chance you retain it and get positive word of mouth from the user.
Sponsor gets cheap advertisement
John gets to play the game for free
This is just one of the multiple possibilities of this feature. Biconomy offers flexibility in the above model, wherein you can customize as per your suitability. For example, one other possibility can be you pay 50% of the GAS fees, and the sponsor pays the balance.
Gasless experience will also help in the seamless onboarding of users like John, as this design will substantially reduce the painful steps and enhance the user journey. The illustrations below explain how Biconomy will enhance user experience and make onboarding hassle-free.
2. Optimized GAS
As of now, applications where Users pay the GAS fees, they need to assess the correct GAS fees. As a result, most users might overpay or either pay less, in which case transactions might not get processed timely, increasing waiting time. This might lead to user drop-off and a terrible user experience.
Applications can solve this by either coming up with an in-house solution that will need lots of development resources
OR
They can rely on BICONOMY to provide a readymade solution.
BICONOMY’s infrastructure takes care of gas optimization and transaction management. They continuously monitor gas prices based on network congestion and bump the GAS fees with tiny increments until the transaction is processed/confirmed. This way, you or your sponsor or user ends up paying the optimum gas fees with surety of no transaction failure or delay in processing.
3. Use of Meta-transactions
What are Meta-Transactions? First, we will need to learn how an ETH transaction works, its problems, and how Meta-Transaction solves it.
nonce: number of transactions sent from a given address. Each time you send a transaction, the nonce increases by 1.
gasPrice: the number of Wei that the sender is willing to pay per unit of gas required to execute the transaction.
gasLimit: the maximum amount of gas that the sender is willing to pay for executing this transaction. This amount is set and paid upfront before any computation is done.
Gas and nonce are critical parameters to get an ETH transaction executed.
Nonce determines the order of transactions to be executed. Therefore, nonce has to be strictly incremented by 1 if signed by the same key.
Your transaction will be picked up for execution if the GAS fee is appropriate based on the current Network congestion. If multiple transactions are triggered from the same sender signed with the same key, then the transaction with the smallest nonce will be picked up first.
For example, John enters the game and wishes to buy a fancy GUN, VEST, and AMMO. Now let’s see the problems that might occur with this design for end-users.
A) Transaction will not be accepted if the nonce is not incremented by 1. For example, If John triggers three transactions with nonce 1,2,5. The transaction with nonce 5 will not be accepted by blockchain.
B) Transactions to be sent out of order. John realizes ammo needs to be bought before the vest. So either he will have to wait till all prior transactions are completed. Or sign ammo order transaction with different signing keys.
C) Bad transaction fee management. For example, John sends a buy order of a Vest with a Gas price of 5 gwei, Gun with 20 gwei, and Ammo with 20 gwei in that sequence. Miners are accepting transactions with 10 gwei or higher. As a result, vest order won’t get in, and HOLD up Gun and Ammo.
D) Transaction dropped by Network’s memory pool. In this case, the vest order must be republished before the Gun and Ammo order gets in.
E) Prioritizing new transaction is painful. John places orders for multiple things like Guns, Cars, Ammo, etc. He later realizes one NFT is available at a cheaper price and wants to buy it asap before it gets sold out. So either he will have to re-organize all pending transactions or send NFT transaction with a new key.
Basically, dealing with transactions on Ethereum is painful and might lead to a bad user experience and in the worst case, loss of funds.
To reduce the hassle the workaround that end-users or dApps might opt for to solve a few of the above problems is by setting up high Gas fees upfront for all transactions, so they never fail or get stuck. But this means paying more even when the network is less congested.
Here is where Meta-transactions comes to the rescue and solves all the above problems. Essentially, Meta-transactions allow dApp developers to pay transaction fees on behalf of their users.
Instead of letting the end-user manage the complexity of blockchain transactions, a third party or dApp can perform those transactions on the user’s behalf. Basically, pay the most appropriate GAS fees on the user’s behalf, so the transaction does not fail or get stuck as mentioned in the above problems. This way, the end-user is not exposed to a bad user experience.
But implementing meta transactions in your dApp will also need a good amount of development, internal infrastructure, so they have an option to outsource it to BICONOMY.
So let’s try to understand how does a Meta-Transaction works in Biconomy. They call it Mexa.
John places a buy order for GUN in GAME
GAME sends the transaction as Meta-Transaction to Biconomy using their SDK
Biconomy acknowledges and gives a receipt saying this transaction will be committed by XX block.
Biconomy estimates the initial GAS fees based on the network congestion and bumps up the GAS fees until it commits the transaction.
This GAS fee is either paid by dApp or their sponsor.
This is how Meta-transactions enable an end-user to directly interact with dApp without initial payment. Since GAS fees are also optimized, dApp ends up retaining users at a lower cost.
Since Meta-transactions solves the below 2 significant issues, which are roadblocks for onboarding users, it will help in the mass adoption of Web3.
User facing the complexity of blockchain transactions
Paying higher than required GAS fees
4. Cross-chain operability
Gone are those days when a new Ethereum killer arose every now and then. It’s evident now that Web 3 world is going to have multiple chains. This means Ethereum and other chains are here to stay, and they will need to interact with each other for many use cases. Thus, for Web 3 to have successful mainstream adoption, simplified cross-chain transfers are going to play a vital role.
E.g. A dApp needs to transfer funds from Polygon mainnet (L2) to Avalanche mainnet. It would take 40 minutes to 7 days for funds to reflect on Avalanche. This will result in high waiting time and negatively impact the user experience.
BICONOMY solves this with their product Hyphen. It provides instant and cheaper token transfer across different blockchains. Also, you have the flexibility to pay gas in tokens you want to send. It manages this by maintaining tokens liquidity on both chains.
Biconomy is transparent with the liquidity pools and details can be seen on the dedicated analytics page over HERE.
Your dApp might opt for a multi-chain architecture in the future and you would not want your users to suffer the multi-blockchain complexities. In this case, you can use Hyphen API’s to get the cross-chain operations without impacting the end-user experience.
5. Pay for GAS in favorite ERC20 tokens
Let’s assume a scenario where your dApp is based on Layer 1 and you or your sponsors cannot afford to pay GAS fees for end-users. However, your end-users can afford to pay the GAS. But what if they don’t want to spend in ETH or they don't have ETH.
BICONOMY provides a solution for this use case with their system: Forward
Here, users have an option to pay their GAS fees in ERC20 tokens instead of ETH. Biconomy relayer will handle the ETH gas fees in the backend and it also ensures users pay the most optimal gas fees at any given time meaning transactions will never be stuck.
Currently, BICONOMY supports Dai, USDC, and USDT, with plans to support more tokens soon.
6. Dashboards
Biconomy Dashboard is a simple UI that allows developers to register their dApps, smart contracts and manage methods/API on which developer wishes to enable meta transactions or gasless transactions.
This dashboard also provides the following options.
Domain Restrictions: Prevent anyone from sending transactions using your API keys and misusing your funds.
Limits: In order to prevent misuse of your funds by DApp users, the dashboard provides a Limit feature. You can apply these limits to different targets like ‘per Dapp’, ‘per User’, or ‘per API’.
dApp Statistics: Key stats like dApp usage data, user acquisition, and conversion rate can be seen on the statistics screen. Also, it shows the total transaction fee in ETH and USD, along with Daily, weekly and monthly bifurcation of the same, so you can review and take appropriate decisions to improve the dApp experience.
Gas Tank Deposits: It enables dApp owners to fill in gas into their dApp’s gas tank. This offers a systematic approach for dApps to monitor how much gas fee their users are consuming and can fill in their gas tanks accordingly. Bonus: You can do it either via Dashboard or also via smart contract so you never run out of Gas.
7. Developer-friendly
BICONOMY provides a developer-friendly approach to integrate with their SDK/API. Mexa provides an option of enabling gasless transactions in a dApp without even changing any code in smart contracts. They have well-detailed documentation to help. Plus they are super accessible on their Discord channel.
TOKENOMICS & GOVERNANCE
$BICO is the native work & governance token of the Biconomy multi-chain relayer infrastructure. It plays a role in decentralizing the network by acting as the network fees, incentivizing all stakeholders to secure and maintain the network, and participating in the network’s governance.
There will be a total of 1 billion BICO tokens, and from a Medium article here is a snapshot of the distribution.
Biconomy also has a rewards platform where users can claim their early adopter’s rewards and Hyphen retrospective airdrops.
Future Roadmap
In a recent Medium article, Biconomy presented their aspiring Roadmap for 2022. A few highlights from it are as follows.
Multichain relayer protocol testnet and mainnet launch
Support for new chains like Solana, Fantom
Revamp of Developer dashboard and dApp statistics
Introducing a liquidity mining program
Launch of DAO
Community and Backers
BICONOMY community is growing super strong with over 100k members on their Discord server, 60k plus followers on Twitter, and 21k members on Telegram. You can ask any queries on their Discord and get quick assistance.
Biconomy is also backed by several prominent venture funds in the crypto space like Binance, Coinbase ventures, BainCapital, Eden Block, and many more. Details can be seen over here.
Conclusion
It’s evident that onboarding users on Web 3 applications is painful, and for mainstream adoption of Web 3 this process needs to be simplified. Biconomy has successfully started this simplification journey and focused on continuing on the same path.
75+ dApp integrations, 12M+ gasless transactions, and $1 billion-plus processed in gasless transactions in 2021 are evidence of their growth.
Upcoming support for new chains, strong community, and simplified web 3 experience for end-users provided by Biconomy will definitely help dApp founders and developers to retain their users, so worth checking it out. HERE