Topic: How does this Bridge make a profit exactly? - page 2. (Read 280 times)
Bridging is just about switching from one network to another and it's not that tough provided that the both network are paired to switched in between. Like sometimes I tried switching from BSC to bep2 chain although it wasn't that stressful but you would be charged from originator to the Creator, that is to say I was charged from BSC and if you want to convert 1 BNB (bsc) to 1 BNB (bep2) without additional gas fee you wouldn't be able to have that same value again except you have 1.1 BNB (bsc) then you will be able to back same 1 BNB (bep2).
I am not too familiar with bridging of coin or token but what I do is trading via exchange and swapping via Dex. I will say this that as long as the exchange is concerned, they are organisation and are profit oriented because they have staff and other things that requires funds to settle. So therefore, they would be subject to collect or charge fee per transaction.
Possibly, your case is likely a different one but I am curious how possible would it be that your transaction scaled through that the exchange paid your transaction fee or am I wrong? Although they make money from other transactions but I am so curious to know what happened here.
Possibly, your case is likely a different one but I am curious how possible would it be that your transaction scaled through that the exchange paid your transaction fee or am I wrong? Although they make money from other transactions but I am so curious to know what happened here.
It's like with centralized exchanges — some exchanges have cheaper 'exchange fees' but it doesn't necessarily mean it's actually cheaper because it doesn't account for slippage/spread/etc which are fees that exchange may earn but don't fall under 'exchange fees'.
That's very true, and I believe that could be the case of the bridge as well. They might make profit other way by adjusting slippage/spread and something similar. We don't understand their business model yet but I'm pretty sure they aren't losing money but making something with each swap.Those businesses exist to make profit from such chain-chain conversions and from swaps. Some of the profits could be visible in the form of fees while other profits may be the ones that you mentioned. They might be earning profits from other tools that they are offering but I'm sure they're also making profit from the tool that OP mentioned in the thread.
I'm not 100% certain of this, but they're likely earning a small amount due to the swap pools. Because just like the likes of Uniswap, there's also an LP pool and a 'swap' taking place behind the scenes.
It's like with centralized exchanges — some exchanges have cheaper 'exchange fees' but it doesn't necessarily mean it's actually cheaper because it doesn't account for slippage/spread/etc which are fees that exchange may earn but don't fall under 'exchange fees'.
It's like with centralized exchanges — some exchanges have cheaper 'exchange fees' but it doesn't necessarily mean it's actually cheaper because it doesn't account for slippage/spread/etc which are fees that exchange may earn but don't fall under 'exchange fees'.
They are making profits on other services they offer, and think not all bridging is the same as yours, there are some times and some chains that you actually pay more than the actual costs of the transfers from the chain.
As I checked, Synapse Protocol has these Swap, Pools, and Stake features where they can make profits there, there will be some fees there that they can use to cover what OP encountered.
Bridging from layer 1 to layer 2 cost can be covered and refunded, saved by some DeFi platforms. I wondered same questions like OP and I did not know real answers but my guess goes on there are things behind the scene, between layer 1 and layer 2 that can bring benefit to those DeFi platforms.As I checked, Synapse Protocol has these Swap, Pools, and Stake features where they can make profits there, there will be some fees there that they can use to cover what OP encountered.
As normal users, we can receive airdrops that are sometimes lucrative so what about these DeFi platforms?
My guess is they can receive grants, airdrops from Layer 1 projects too and they use part of it to cover bridging fee for users. It's type of mutual benefits for Layer 1, Layer 2, DeFi platforms and users.
I don't know it is a sustainable model for a long term business operations.
They are making profits on other services they offer, and think not all bridging is the same as yours, there are some times and some chains that you actually pay more than the actual costs of the transfers from the chain.
As I checked, Synapse Protocol has these Swap, Pools, and Stake features where they can make profits there, there will be some fees there that they can use to cover what OP encountered.
As I checked, Synapse Protocol has these Swap, Pools, and Stake features where they can make profits there, there will be some fees there that they can use to cover what OP encountered.
Yup, I can agree with your calculations, There's no doubt that from the common / Bussnies perspective, this looks like a bad deal that they are subsidizing their users and making a bad business move in loss/no profit.
But From where I'm thinking of it, buddy this is their business strategy to help their users reach goals and activity goals, as you can see this protocol provides, Staking, DEX intrachain, and other network bridging services as well, Once you find any product/service cheap you always prefer to go for it next time as well, so you are now familiar with them, you'll probably going to use other services provided by them as well due to your previous experiences. This is how they earn profit from diversified ecosystems dn utilize their some of profits to attract more users.
But From where I'm thinking of it, buddy this is their business strategy to help their users reach goals and activity goals, as you can see this protocol provides, Staking, DEX intrachain, and other network bridging services as well, Once you find any product/service cheap you always prefer to go for it next time as well, so you are now familiar with them, you'll probably going to use other services provided by them as well due to your previous experiences. This is how they earn profit from diversified ecosystems dn utilize their some of profits to attract more users.
So for the first time I had to use a bridge from ARB to ETH. I waited until the ETH fees were low enough and last weekend we got some 3 Gwei fees and I figured it would be the perfect time to bridge from Arbitrium to Ethereum.
Found a bridge called Synapse. I put in my details about which chain to use and to what destination chain. It was only $2.5 cost. I was like wow, amazing. I assumed it would be $2.5 plus some other gas fees.
So I nervously made the transfer and to my surprise the quotes were correct. Only $2.50 went towards fees, plus a 1 penny transaction gas fee on Arbitrum.
Then out of curosity I checked the ETH transaction and it turns out the Bridge had to pay almost $4 in gas just to make the bridge. So its a loss to them. Why would they do this? I verified the sent token and its not a fake scam token, everything seems legit. So why is the bridge operating at a loss?
Found a bridge called Synapse. I put in my details about which chain to use and to what destination chain. It was only $2.5 cost. I was like wow, amazing. I assumed it would be $2.5 plus some other gas fees.
So I nervously made the transfer and to my surprise the quotes were correct. Only $2.50 went towards fees, plus a 1 penny transaction gas fee on Arbitrum.
Then out of curosity I checked the ETH transaction and it turns out the Bridge had to pay almost $4 in gas just to make the bridge. So its a loss to them. Why would they do this? I verified the sent token and its not a fake scam token, everything seems legit. So why is the bridge operating at a loss?
Jump to: