Hyphen enables instant and cheaper token transfers across different blockchains. It especially solves the pain point of getting your funds from Layer2 to Layer1 blockchains. If you transfer your funds via Layer2 native bridges it might take you from 40 min to 7 days to get your funds on Layer1. For example, it takes around 40-50 min to get your ERC20 tokens from Polygon Network to Ethereum via their native bridge.
Hyphen provides cheaper and instant transfer of funds by maintaining tokens liquidity on both sides of the chains and instantly transferring tokens on second chain after accepting tokens on first chain. It also rebalances the liquidity automatically if there's too much one sided transfers.
If Alice wants to transfer tokens across chains then she'll be charged .3% fee which goes to Liquidity Providers and transfer transaction fee is also deducted from the tokens being transferred in the same currency. For example, if Alice is transferring 500 USDC from Polygon to Ethereum and the transfer transaction on Ethereum takes $10 USD gas fee, then she will get 488.5 USDC on Ethereum.
Biconomy has deployed LiquidityPoolManger contracts on all supported chains where all Liquidity will be stored. We have off-chain servers, aka Executor Nodes, running, that are constantly monitoring these smart contracts for any incoming deposit transactions.
Executor Nodes has two main components: Watch Tower and Executors
Watch Tower monitors LiquidityPoolManager smart contract to listen for any incoming deposit transaction on all the chains. Once it finds any deposit transaction it notifies the Executor component about the same.
Executor verifies the incoming deposit and initiate a transfer transaction on the other chain. The other chain id, receiver address and the amount to be transferred are part of the deposit transaction only.
The LiquidityProvider fee and transfer transaction fee is deducted on-chain on LiquidityPoolManager smart contract only. Only Executors have the right to transfer funds from LiquidityProviderManager contract.
Re-Balancing needs to happen to make sure liquidity on all chains are balanced. Re-balancing scripts are run to find that if there is less liquidity on a particular chain it triggers re-balancing operation and funds are transferred from other chains to balance the liquidity via corresponding native bridges.