This bridge is built through the "main chain" of LEO, which is built on Hive (for the foreseeable future). This means we are bypassing Binance entirely, which is interesting because for some reason I was assuming that was not the case.
The bots used to wrap and unwrap wLEO/bLEO are fully centralized at the moment and fully controlled by the dev team. However, there's no reason to assume this will be the case forever. In fact, even LEO itself is pretty centralized because witnesses do not confirm our tokenomics or transfers.
That being said, we do have plans to create second-layer consensus nodes with an associated governance token, and from that upgrade we should be able to branch out and start decentralizing the other aspects of the network. All of this is accomplished by the free security being offered here by the witnesses. We only need enough Resource Credits to be able to afford bandwidth and continue utilizing this free security and scaling solution.
In any case, it's going to be pretty expensive to to use the bridge, but consensus is that it will get used anyway due to the convenience of not having to go through Binance. On top of a 0.25% fee being charged to use the bridge (that will buy and burn LEO/CUB) users will also have to deal with massive transaction fees on the ETH network, BSC network fees, exchange fees, and whatever else.
Imagine transferring wrapped Doge on Ethereum to wrapped Doge on BSC. First, the Doge must be traded for LEO. Because there is no direct liquidity the Doge has to be traded for Ethereum first. Then the Ethereum has to be traded for wLEO. This could be accomplished in one transaction using the router but will automatically incur two separate Uniswap fees (0.3% x 2).
Then the wLEO needs to be unwrapped to LEO: Another expensive ETH transaction. Then the LEO needs to be rewrapped into bLEO, sold to BNB, and traded again for Doge (another 0.2% x 2 Pancakeswap fee).
So adding up the 4 exchange fees is already 1% alone. 1.25% including the bridge fee. That doesn't include the two Ethereum transactions or the two BSC transactions. Ouch. That's really expensive, albeit the one-click convenience and the ability to sidestep Binance completely will surely attract some capital from the outside.
Coincidentally, this convenience also adds a decent amount of security to the BSC network. Again, this bridge adds a fully unique way to enter BSC without having to rely on a centralized exchange. That counts for a lot. For example, if Binance gets hacked, crashes, or otherwise shuts down or censors accounts, users will still be able to enter/exit the BSC ecosystem via the bridge. The bLEO wrapping/unwrapping bot is already fully functional today so we're in a pretty good spot.
Or you could just send the Doge to Binance and then withdraw it to BSC. Obviously, this is way cheaper, and in the future it might even be worth setting up a centralized bot that does exactly that on behalf of the end-user (assuming Binance allows that). Regardless, the demand for a bridge outside of using Binance is palpable, and I'm honestly floored that the LEO network is going to be the first one to get there in any meaningful way.
It's very significant that our wrapping/unwrapping bot on BSC https://wleo.io/bsc doesn't require the permission of Binance to operate. They can't really shut us down because of the nature of cloning the ETH ecosystem. Good stuff. Hard-coded assurances are valuable.
In many respects this Bridge will be used to move the entire bag of users who are absolutely fed up with ETH transaction costs. $100 fees will only continue to enrage users, and providing this bridge could be seen for many as a way to exit to a clone who's learning curve is exactly the same as ETH itself (zero for ETH users). This is exactly what gives Litecoin value (works the same as BTC with x1000 cheaper fees).
At the peak of the mega-bubble, transaction costs on BTC/ETH could skyrocket to as high as $1000. It's almost guaranteed that a mass exodus will occur at the end of the year. We'll be waiting.
While everyone cries out "wen wen wen" I'm very impressed at the speed in which we are moving. Again, this bridge is getting created fast and it already has built in demand. Everyone that uses it is going to be looking toward the LEO/CUB/Hive networks. It should attract a lot of new users to the entire ecosystem as a whole, as it can and will be used by users that don't even know we exist: they simply want to transfer ERC20 to BEP20 for some other reason. The mega-bubble is real. Steel yourselves.
Posted Using LeoFinance Beta