At the moment, Free TON is developing a DeFi system. Creating a bridge to Ethereum is one of the directions. Its implementation is a fairly effective way to increase interest in Free TON among members of the cryptocurrency community.
Ethereum: Briefly About the Main
The market capitalization of Ether is about $250 billion — the second largest in the world after BTC! The ETH exchange rate demonstrates and is already between $ 2,000 and $ 3,000 for 1 token. In total, there are over 115 million tokens in circulation. After the full launch of Ethereum 2.0, the transition to the Proof-of-Stake blockchain protection algorithm will occur, and the appearance of new ETH tokens will stop. It is expected that these factors will lead to a further increase in the Ether rate to 10 thousand dollars by the end of 2021.
The Ethereum platform is unique because it is the first blockchain that allows you to run programs with Turing Complete logic — smart contracts. Ethereum allows you to use smart contracts to issue not only ETH, but other tokens as well. Any developer can acquire their own crypt by setting the required parameters: emission, interchangeability, distribution method, etc.
The creators of the ecosystem have developed their token standard — ERC-20, which made it possible to issue tokens on the platform. 280,000 items were launched, including well-known ones: USDT, LINK, BNB.
Ethereum 2.0: Just About… Just a Little More Patience
Uniswap, Binance DEX, Kyber Network, IDEX — most of the existing DeFi applications are built on Ethereum. At the same time, the speed on the platform is not high, about 20 transactions per second. Any complex transactions reduce their number in the conducted block. For miners to include the transaction in the next block to be signed, there is a commission — “gas fee”. And miners are interested in forming blocks to earn more. This leads to increased competition for getting a transaction into a block and an increase in “gas fee”.
The launch of Ethereum 2.0 should fix the situation, but when will it happen?
Free TON already has much higher performance and much lower fees. These conditions contribute to the gradual transfer of value from one platform to another, and there is only one way to implement these plans – the creation of the Free TON↔Ethereum bridge. So, we came to the holding of the corresponding contest in Free TON.
Free TON↔Ethereum Bridge Design Contest
Broxus have experienced platform development engineers to work with various blockchains. Team members are part of the Free TON community DeFi Sub-Governance, as well as the newly formed DeFi Alliance, an association of specialized funds focused on attracting talented development teams and liquidity from other projects to Free TON.
The task of implementing the bridge from Broxus (only the winner of the first stage is involved in further development) includes 4 stages.
Stage 1. The main goal is to develop a system of smart contracts of the bridge and the ability to transfer messages both from Ethereum to Free TON, and in the opposite direction.
Stage 2. The goal is to develop a transfer system between blockchains.
The 3rd stage is aimed at the distribution of responsibilities of the relay and implementing the economic model of the bridge.
Stage 4 is dedicated to betting, rewards and slashing.
At the Weekly DeFi Governance Call #21, the work of the current Free TON↔Ethereum bridge was demonstrated. The bridge consisted of a set of smart contracts in Free TON, a set of contracts in Ethereum, and three relay nodes — this allowed any data to be transferred between Ethereum and the Free TON blockchain.
The Ethereum token standard is ERC-20. In Free TON, the standard is still in the process of creation and standardization. The Broxus team proposed their vision of the standard, based on the TIP-3 proposal that the developers are using in the bridge.
Free TON↔Ethereum Bridge: Relays — Guarantors of Work
Bridge relays provide bridge functionality. These are servers that have access to both Ethereum and Free TON at the same time. Their responsibilities include transferring information between blockchains. The bridge software is a Broxus-developed relay software and set of smart contracts deployed on the Free TON and Ethereum networks.
The task of relays is to listen to special contracts on the network and, when receiving messages, transmit information to another network. For example, the receipt of a request for the exchange of tokens from blockchain users triggers the corresponding smart contracts. Smart contracts send special messages that the bridge relays “listen to”. There are several relays. As soon as most of them confirm they see the same message, this message will be sent to the adapter. The adapter can be a token contract, an oracle, or something else. Due to the nature of the Ethereum network, the maximum number of relays is limited to 100.
To protect against errors and fraudulent actions, there is a mechanism based on the principles of Proof-of-Stake. Its essence lies in the fact that relays leave a stake as a pledge. And relay risks losing part or all of its stake if other relays catch it in a lie. For example, if a “bad” relay wants to “trick” the others by indicating that it sees some non-existent message. In this case, the slashing mechanism will be applied to the deceptive relay.
Bridge Operation Scheme
Wrapped ETH (WETH) — Wrapped Ether are ERC-20 tokens on the Ethereum network. To transfer them to the Free TON WETH network, they are blocked on a special contract in Ethereum. After that, WETH of the TIP-3 standard in a 1:1 ratio will be released on the Free TON network. The TIP-3 standard is the Free TON distributed token standard.
Wrapped TON (WTON) — are TIP-3 tokens in the Free TON network. The transfer to the Ethereum network is similar to the mechanism described above.
TON↔WTON And Back: Step-By-Step Conversion Instructions
- Through a special smart contract, the owner of TONs sends a message that he wants to use his funds in Ethereum. Now this means sending TONs to the storage, that is, to a specific address, as in other cases when transferring funds. So far, the operation is available only to users of the TON Crystal Wallet.
- After a successful transaction, TONs are blocked in the Free TON network storage, and in the sender’s wallet, WTON will appear on the balance (except 1 crystal, which acts as a guarantee).
- WTON can be sent to the address of any Ethereum wallet and used in the same way as other ERC-20 tokens on the Ethereum blockchain.
To return the wrapped TON to Free TON and use the TON Crystal again, you will need to send WTON to the same storage address. At this moment, the wrapped TONs will burn out, TONs will appear on your account again and 1 TON will be written off. 1 TON Crystal — the maximum gas value in the Free TON blockchain. If the contract spends less, it will return the difference to the wallet.
Broxus on its Free TON↔Ethereum Bridge
After getting acquainted with such a significant and important project for Free TON, we contacted Vladislav Ponomarev, CEO of Broxus, to find out what the developers themselves think about it.
- Vladislav, what difficulties did the Broxus team face during development?
There were many difficulties. For example, we had to refine the TIP-3 standard so that it could be applied in real life.
- How long does this work take for your team?
120% of our time. Because our team is fully focused on the development of the DeFi ecosystem.
- What is the consensus used by bridge relays?
The DAO consensus is still in development, and the specific values will differ depending on what the vote is for. For example, for signing a specific message, for changing the bridge settings, for adding a new relay, etc.
- How long does it take to transfer from Ethereum to Free TON and back?
A little. Most of all, the bridge expects enough confirmations on the Ethereum side. On the Free TON side, everything happens in less than a minute.
- When will it be possible to fully use the bridge?
The bridge is already fully functional, but we are enforcing the maximum amount of liquidity that can be passed through it. We are waiting for a formal security audit and implementation of the DAO model to completely move from partial decentralization to sufficient.
- What benefits can the owner of the Ether get by transferring their tokens to Free TON?
The economy is still in development, stay tuned for news from Broxus and come on weekly calls.
The DeFi Alliance recently listed WTON on the largest decentralized exchange Uniswap. This is evidence that a full-fledged DeFi ecosystem will be implemented in the Free TON ecosystem soon.
Creating bridges with crypto giants is both a way to become a significant part of this world and an offer to solve their problems with the Free TON functionality. In the meantime, we will continue to wonder what will happen first: Ethereum 2.0 or the bridge with Free TON will fully work.