Biconomy

Biconomy is a multi-chain relayer network built on top of the Ethereum blockchain. It aims to simplify the user experience for decentralized applications (dApps) by addressing challenges like gas fees and network switching in blockchain operations. ^[1]

Overview

Biconomy was founded in 2019 by Sachin Bansal, Ahmed Al-Balaghi, and Aniket Jindal. The platform focuses on simplifying and reducing the cost of onboarding web3 and crypto users. It offers innovative solutions such as gasless transactions and intuitive user onboarding for dApps across multiple chains. ^[2]^[3]

Biconomy utilizes its meta transactions to handle user transactions on behalf of the end user as an attempt to improve overall user experience. The platform's relayer infrastructure and transaction network function as a payment gateway for crypto transactions, streamlining the user experience and promoting the adoption of blockchain technology. ^[2]^[4]

To facilitate its operations, Biconomy has its native token called BICO, which serves as both a utility and governance token. BICO is used for paying validators on the network and enables users to participate in the governance process by proposing and voting for network improvements. This incentivizes validators and transaction executors, creating a robust ecosystem within the Biconomy network. ^[1]^[2]

Biconomy SDK

Gasless Transactions

Gasless transactions in the Biconomy SDK enable users to interact with decentralized applications (dApps) without the need to possess native tokens for gas fees. By leveraging the Paymaster contract as a "Gas Tank," users can deposit funds and whitelist their dApp contracts to abstract gas within the dApp. This mechanism simplifies user onboarding and eliminates the requirement to purchase crypto tokens before using a dApp. ^[5]

Through Biconomy's gasless transaction flow, users initiate transactions and provide their signatures via the Biconomy SDK. Relayers (bundlers) then post the transactions on-chain using an Entry Point contract, which verifies the signature and uses the paymaster to recover the gas fee from the dApp's deposit. Paymasters, such as the pre-deployed BiconomyVerifyingPaymaster, allow dApps to sponsor gas fees, and any unused funds can be withdrawn when needed. ^[5]

Batch Transactions

Batch transactions offer a convenient solution for users of smart contract-based accounts to execute multiple transactions within a single on-chain transaction. By enabling batched transactions, gas costs for dApps can be reduced and has the potential to save users both time and effort. Developers can leverage batch transactions to simplify complex actions, eliminating the need for users to perform multiple steps and enhancing the overall usability of their dApps. This approach aims to enable a more seamless and provide a familiar web2-like experience, where users can execute multiple transactions with a single click. ^[6]

On the developers’ side, batch transactions can be easily integrated into dApps without the need for modifying existing contracts. Additionally, batch transactions can help mitigate risks related to Miner Extractable Value (MEV) in high-volume decentralized finance (DeFi) trades, reducing the chances of front-running and value extraction. ^[6]

Fiat On-Ramp & Off-Ramp

Biconomy has partnered with Transak, a developer integration toolkit, to offer a convenient fiat On-Ramp & Off-Ramp solution. This integration allows users to buy or sell cryptocurrencies directly within their preferred applications or websites, streamlining the process and eliminating the complexities of asset on/off-ramping. ^[7]

Through Transak's fiat on-ramp, users can place an order in their desired fiat currency and select a payment method. For first-time users, a straightforward KYC process is required. Transak then securely processes the fiat payment, converts it into the chosen cryptocurrency, and delivers it to the user's smart contract wallet, enabling immediate access to the crypto needed for their dApp experience. ^[7]

With Transak's off-ramp solution, users can effortlessly liquidate their crypto holdings. After completing a one-time KYC process, users can initiate crypto payments directly from their smart contract wallet whenever they decide to sell their holdings. Transak handles the seamless reconciliation of the crypto payment and transfers the equivalent fiat amount in the user's preferred currency to their bank account, ensuring a swift and hassle-free experience. ^[7]

Biconomy's partnership with Web3Auth brings social logins to Web3 applications through the Biconomy SDK. By integrating traditional social sign-in with Web3 authentication, the platform offers a simplified onboarding process. Users maintain control over their cryptographic key pair, ensuring secure access and ownership. ^[8]

With social login, users can sign in to your dApp using popular social platforms like Google, Facebook, or email. Each user is assigned a unique private key generated by Web3Auth, enabling seamless transaction signing without the need for wallet pop-ups or context switching. It offers a consistent account experience across different social accounts as long as the email remains the same. ^[8]

Biconomy does not store any private keys. Web3Auth utilizes a key infrastructure where users handle their keys similar to a multi-factor account. The private key is divided into shares, with the device share securely stored on the user's device, the OAuth login share distributed among a network of nodes, and the backup/2FA share serving as a recovery option. Users need to prove ownership of at least two out of the three shares to access their original private key and sign transactions, ensuring enhanced security. ^[8]

Products

Hyphen

Hyphen, offers a seamless solution for transferring Ethereum and stablecoins like USDC between Polygon, Ethereum, and Avalanche. It aims to provide faster transaction speeds and lower fees compared to other bridges. Hyphen's architecture involves a deposit process, watch tower nodes, executor nodes, and rebalancing scripts. With the recent release of Hyphen 2.0, new features include permissionless liquidity provision, dynamic fees for capital efficiency, arbitrage opportunities, and increased chain and asset support. The architecture is designed to prioritize security, speed, connectivity, capital efficiency, and statefulness, providing a robust and efficient cross-chain transfer solution. ^[16]

Forward

Forward allows users to pay gas fees in ERC20 tokens, offering a solution to the bottleneck of requiring ETH for gas fees. With the simple APIs provided by Forward, end-users can pay gas fees using stablecoins and other ERC20 tokens, aiming to enhance the onboarding experience and preserving users' ETH investments. By enabling gas payments in ERC20 tokens, Forward opens up opportunities for developers to enhance user experiences in various domains such as DeFi protocols, wallets, dApps, financial applications, and blockchain games. Forward aims to eliminate failed or stuck transactions by utilizing optimization techniques to ensure completed transactions while optimizing gas usage. Biconomy is actively seeking innovative ideas to leverage Forward and welcomes new use cases that leverage gas payment in ERC20 tokens. ^[17]

$BICO

The BICO token serves as the native and governance token for the Biconomy multi-chain relayer infrastructure. It plays a vital role in decentralizing the network by acting as the network fees, incentivizing all participants to secure and maintain the network, and participating in network governance. ^[9]

Utility

Network Fees

BICO functions as the primary token on the Biconomy blockchain, which operates as a settlement and verification layer for all activities on the Biconomy Network across supported chains. Node operators are required to pay transaction fees using BICO when adding information to the chain, and they earn BICO in proportion to their contributions to the network. ^[9]

Stakeholder Incentives

Node Operators
Validators and Executors stake BICO to actively contribute to the network. They receive BICO rewards corresponding to their contributions and staked amount. In case of any misconduct, the network has the authority to reduce their staked BICO. Validators listen to relevant transactions on other chains and record them on the Biconomy chain, while Executors execute actions based on these transactions. ^[9]^[10]
Delegators
BICO token holders stake their tokens to further strengthen the network's security and earn BICO proportionate to their staked amount. ^[9]^[10]
Liquidity Providers
To ensure optimal functionality, the protocol requires active liquidity in a diverse range of tokens across all supported chains. Liquidity Providers (LPs) contribute this liquidity by supplying various crypto assets to the protocol's liquidity pools on different chains. When users utilize the liquidity pools, a small fee is collected, which is subsequently distributed to the LPs. Additionally, LPs earn BICO in proportion to their relative contributions to a given liquidity pool. ^[9]^[10]

Governance

BICO holders have the authority to propose and vote on decisions that impact Biconomy's protocol and the overall network. These decisions encompass modifications to the network's code, the introduction of additional services, or determinations regarding the allocation of treasury funds. Any BICO holder is welcome to submit a proposal for consideration by the broader Biconomy community. This aspect of governance aligns with Biconomy's vision of progressive decentralization, aiming for community-led growth and self-sustainability. ^[9]

Tokenomics

Token Distribution

The total supply of BICO tokens is capped at 1 billion and is allocated as follows: ^[9]

Token Release Schedule

The release schedule is designed to ensure long-term alignment between investors and the team, fostering a shared commitment to the project's success. ^[9]

Funding

On December 31, 2020, Biconomy raised $1.5 million in seed funding led by European venture capital group Eden Block. Other participants in the funding round include Fenbushi Capital, Binance, and DACM. The funding was to be utilized to enhance user experience by reducing friction when interacting with dApps. Biconomy stated that they aim to revolutionize the way users pay and use blockchain apps, envisioning a simplified onboarding and transaction process for Web3 and blockchain projects. ^[11]^[14]

"The ways in which users pay and use blockchain applications needs a complete overhaul. Netflix does not charge its users a fee every time they watch a video, so why should dapps charge users a gas fee for every interaction?” - Ahmed Al-Balaghi, co-founder and CEO

On July 28, 2021, Biconomy successfully raised $9 million in a private funding round led by Mechanism Capital and DACM. This round also saw participation from prominent investors such as Coinbase Ventures, Coinfund, True Ventures, and many others. Biconomy aimed to use the funding to scale its existing products, foster community growth, and enhance its multi-chain transaction infrastructure. The company plans to delve deeper into various chain ecosystems and bring simplicity to crypto interactions for mainstream adoption. ^[12]^[14]

“Every crypto interaction is complicated, whether it’s simple tasks like buying and selling or complex interactions through a variety of decentralized finance contracts or applications, these are major roadblocks to mainstream adoption since most people can’t figure it out" - Ahmed Al-Balaghi, co-founder and CEO

On October 28, 2021, Biconomy raised $11.5 million through a public sale of its native token BICO on CoinList. The sale attracted over 860,000 registrations and added 12,000 new token holders. Biconomy aims to simplify decentralized app development by providing plug and play APIs that facilitate transactions between different blockchain networks. ^[13]^[14]