Bridge Arena — Episode 3: OpenSwap Bridge vs. Binance Bridge 2.0

With our recent efforts on deploying the OpenSwap Bridge on ETH Kovan, AVAX Fuji C Chains, and BSC testnet for our community members to try and submit their feedback to us, we have managed to gather valuable and constructive feedback from our supporters. Through some of the feedback we received so far, the OpenSwap team is now feeling confident that our project is going in the right direction!

Our target is to have OpenSwap Bridge successfully deployed on mainnet in Q2-Q3 this year, as such, we’ve introduced a new series called Bridge Arena. A comparison series designed to assist our community members understand how the OpenSwap Bridge differentiates from other traditional crosschain bridges.

For Episode 3, we will be comparing the OpenSwap Bridge against Binance Bridge 2.0, a newly announced centralized crosschain bridge operated by Binance.

What is Binance Bridge 2.0?

Binance Bridge 2.0 is a service offered by Binance, one of the biggest centralized exchanges, to mainly improve the interoperability between Binance’s chains, namely the Binance Smart Chain and Binance chain, and other chains such as Tron or Ethereum. It uses a unique mechanism called peg-in & peg-out.

Its latest iteration, 2.0 is live on 29/3/2022. Right now, the page redirects registered users to Binance.com or non-registered users to other trustless protocols such as C-Bridge or AnySwap.

How Does Binance Bridge 2.0 Work

As the Binance Bridge was announced only on 29 March 2022, details about this new release are still very limited. Only the conceptual explanation is given for its peg-in & peg-out mechanism. Peg-in refers to the process of minting synthetic pegged tokens on Binance’s chains when depositing native assets to Binance. While peg-out refers to the reverse of the action, burning these synthetic pegged tokens and releasing them. So the idea behind is rather similar to the one behind Ren.

As of this moment, the web front for the bridge is seemingly down. Presumably, users need to rely on the deposit and withdrawal functions from the Binance site or application. This means that they support most of the chains and tokens that Binance supports. It is also stated that they have plans to support tokens that are not listed on Binance.com.

Binance Bridge 2.0’s Limitations

Even though a lot of DeFi users started their journey with Binance and have probably used Binance Bridge at some point, it is still a service offered by a regulated, centralized exchange that has its natural limitations.

• KYC/Registration Needed

Only registered users of Binance can use the service of Binance bridge. Such registrations might require additional KYC(Know Your Customer), which means that those who wish to register to be a user would need to disclose information such as nationality and physical addresses. This prevents users who wish to stay anonymous from using the service.

• Centralization

Other than the fact that the bridge is operated by Binance, not much information is given on how exactly the bridge works. Neither you and I can be a validator nor participate in the operation of the bridge. Therefore even though the bridge can be free and supports many tokens + networks, it most certainly comes at a cost.

• Synthetics Involvement

Like Ren, Binance bridge creates synthetic pegged tokens like BTCB so that it can function. Not only does it lead to another point of attack, it also complicates the defi landscape.

• Suspension and Slow Withdrawal

Binance often suspends the withdrawal of tokens for certain networks from time to time. The duration can even last from hours, days, to weeks. Withdrawals from Binance can also be slow when they claim the network is congested. However, we do not know Binance’s exact yardstick for making these decisions. This can lead to a shock in users’ confidence

How is OpenSwap Bridge Different

• Anonymity

Anonymity is important, and this is the core value all DeFi stakeholders work hard to protect. Since OpenSwap is a DApp (decentralized application), there’s no need for users to KYC into our platform. This means users can stay fully anonymous when using the OpenSwap Bridge. Although this is far from a piece of professional legal advice, most of the DApps like Uniswap or Pancake Swap do not require KYC.

• Decentralized

Our bridge relies on a network of Trolls (bots) and single asset vaults. Our codes for the Mean Trolls (Txn creators), Green Trolls (validators), and the programs that they will be running would all be open-sourced. Users can stake OSWAP tokens to obtain a Bridge Troll NFT, essentially it is a decentralized license to enable a user to become a validator for the OpenSwap Bridge. In the future, there are also plans to nominate Green Trolls with good running records to be promoted to a Mean troll, making it even more decentralized for the entire OpenSwap ecosystem.

• No Synthetics

OpenSwap Bridge itself does not require synthetics to function. This way, we would not be contributing to the proliferation of synthetics and without the use of ‘minting contracts’, lowers the risk of attack. Projects can still deploy its tokens on other chains, if so, they can use OpenSwap’s upcoming bridge vaults to bridge their tokens without involving synthetics.

• Stable

Unlike centralized crosschain bridges such as the likes of Binance Bridge, no one and not much can get in the way of OpenSwap Bridge providing its seamless crosschain services to DeFi users.

The OpenSwap Bridge may temporarily suspend its services only in these unlikely scenarios —

Unexpected Error: Something we at OpenSwap are working hard to prevent.

Admin Halting: A function to be delegated to the community in the near future.

Voting to Stop the Bridge: An action that requires all OSWAP token holders to participate in.

Other than the above very unlikely scenarios, the OpenSwap Bridge will be up and running 24/7/365 without fail.

WAGMI

In this episode of Bridge Arena, we have looked into the basics of what Binance Bridge 2.0 is and how its mechanism works, as well as identifying some of their possible limitations such as the need of KYC which sacrifices users’ anonymity, centralization, involvement of synthetics, as wella s potential service suspension and slower withdrawals.

With OpenSwap Bridge, DeFi swappers of our supported chains can be relieved from these pain points as not only do we support crosschain activities between any EVM to any EVM chains, protect users from impermanent loss, truly decentralized, but also have a simple, open-sourced, and audited structure. Of course, there have also been no exploits recorded. Binance is a respected leader in the crypto space and we look forward to joining Binance Bridge in providing the crypto community with more crosschain options.

About OpenSwap

OpenSwap is the world’s first DEX providing on-chain swaps at zero slippage with hybrid smart routing, and a single asset crosschain bridge. As the DeFi universe continues to expand, liquidity becomes increasingly scattered across multiple chains and the situation is poised to get worse as new chains emerge with individual DEXs on each chain. The OpenSwap team has been working for the past several months on building up a vision of a greater OpenSwap ecosystem that will become every crypto project’s BFF through a set of key offerings that will empower teams to establish funding and sustained token health, allowing teams to focus on what they do best — BUIDL.

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