Overview
Synapse Bridge allows to perform a cross-chain transfers of various tokens. Currently, the supported tokens are:
- nUSD — intermediate token for stablecoin bridge
- nETH — intermediate token for ETH bridge
- SYN — native token of Synapse
- HIGH, DOG — the first third party tokens, supported by Synapse
The user incurs the bridge fee, when performing a cross-chain transfer. The fee is a percentage of the amount of tokens bridged, with a minimum fee amount.
The user receives a small amount of gas token on the destination chain along with the bridged token.
The bridge fee is supposed to at least cover validator gas costs + airdrop amount on the destination chain, no matter what the bridged amount is.
Currently, there's no consensus on how the minimum fees should be set and adjusted, should any of the following parameters change:
- Proportion between bridged token's price and the destination chain gas token's price. A reasonable fee today can easily become too high/too low in a month.
- Average gas price (in Gwei) on the destination chain. This number depends on the network congestion and the gas oracle that is used by the validator. Ideally, we want the transaction to be confirmed within a few blocks, but without overpaying for gas.
- Average gas usage (in gas units) on the destination chain. This number should not change, unless the bridge contracts are further optimized.
The proposal aims to establish a reasonable min fees as a starting point and to develop a procedure for further adjustments.
Proposal
Change current minimum fees and airdropped amounts to following:
Further adjustments of fees and gas airdrops will be made by the Synapse team, following the community input and several guidelines:
- For the nUSD transfers, the total spent (gas cost + airdrop) should not exceed 90% of the min fee.
- For the nETH transfers, the total spent should not exceed 95% of the min fee.
- For the transfers of other tokens, the total spent should not exceed 65-80% of the min fee (depending on the token's price volatility).
- For the sake of cleaner UI the min fee should be rounded up to have a reasonable amount of decimals.
Reasoning
For every chain, the validator activity was examined. Average gas usage and gas price was calculated for every bridgeable token.
For pricing, instead of the current price, the time-weighted average price was used to reduce the price volatility impact on the results. The timeframe of 1 week was used for native chain tokens, while 3 days was used for the bridged assets.
- If we set the min fee amount too high, it can scare away some of the users. For instance, the current 10 SYN min fee for bridging to AVAX is probably stopping some of them to bridge SYN there and provide liquidity at TraderJoe.
- If we set the min fee too low, the validators will have to pay for the gas from their own pocket for small-medium sized transactions. This is not sustainable.
So ideally, we want the min fee to cover the costs, though not by a large margin.
Here's the full table with all the numbers:
New airdrop amounts are meant to be enough to cover the costs of "allow bridged token for trade on DEX" + "sell bridged token for the native chain token" transactions.
On most chains, the airdrop will cover even more txs than that, except for Arbitrum, where the gas airdrop is the most expensive one.
- For the nUSD transfers, the total spent (gas cost + airdrop) should not exceed 90% of the min fee.
The native chain tokens (used to pay for gas) prices are somewhat stable, so we can get away with lowering the min fees for nUSD.
The Ethereum gas spikes are potentially dangerous, this is why a lower ratio of 84% is used there.
- For the nETH transfers, the total spent should not exceed 95% of the min fee.
nETH is the only asset, where the bridge fees and the gas are paid in the same token, ETH. This allows us to use a high Spent/MinFee ratio.
ArbGAS is much less volatile than ETH gas, so we can afford to set a low min fee on Arbitrum.
- For the transfers of other tokens, the total spent should not exceed 65-80% of the min fee (depending on the token's price volatility).
The correlation between the gas token and the bridged token is Terra Incognita, so lower Spent/MinFee ratio is used.
Over the time, the ratio can be adjusted, should the bridged token become more or less volatile.
- For the sake of cleaner UI the min fee should be rounded up to have a reasonable amount of decimals.
This will make the UI much cleaner and will leave some extra room for price volatility without increasing the fee too high.
