Bridging Symbol to Ethereum

This page explains the concepts behind a Symbol bridge for moving XYM to and from the Ethereum blockchain as an ERC-20 token called Bridged XYM (bXYM), or converting XYM into Ethereum's native ETH.

Unlike cross-chain swaps, which coordinate trustless exchanges between users, the Symbol Bridge is a centralized service operated by The Symbol Syndicate. It watches one blockchain for deposits and sends corresponding payouts on the other blockchain.

The bridge implementation is available as open source.

The workflows directly supported by the bridge are:

• Bridging: XYM → bXYM
• Redeeming: bXYM → XYM
• Swapping: XYM → ETH

Since both bXYM and ETH exist on the Ethereum network, they can be exchanged through a conventional DEX like Uniswap, without requiring a bridge. ETH can thus be converted to XYM via bXYM.

Why Bridges Are Needed

Tokens belong to the blockchain where they are created. XYM, for example, exists on Symbol and can be transferred by Symbol transactions. It cannot be sent directly to an Ethereum account because Ethereum nodes do not process Symbol transactions, and Symbol nodes do not process Ethereum transactions.

A bridge coordinates activity on both networks. It receives tokens on one blockchain, verifies the request, and sends corresponding tokens on another blockchain. This does not make the two blockchains share a single ledger.

Bridge Accounts

The bridge has accounts on both networks it connects. Users do not send tokens directly across networks. Instead, they send tokens to the bridge account on the source network and include the destination address where the payout should be delivered on the target network.

The bridge watches its accounts for incoming requests. When it finds a valid request (see Invalid Requests below), it sends the corresponding payout from its account on the other network. For this to work, the payout-side account must have enough tokens to satisfy requests and enough native currency to pay network fees.

Because the bridge operates through ordinary blockchain accounts and transactions, it is neither part of the Symbol nor the Ethereum consensus protocols. It is an off-chain service that observes one chain and submits transactions to another.

The bridge uses four different accounts to handle all possible workflows:

Making a transfer to any of these accounts except the swap payout account initiates the workflows described below.

Do not transfer any funds to the swap payout account

This account exists only to pay users on the Ethereum network after performing a swap. Funds transferred into it will not be recoverable.

Bridged XYM

Bridged XYM (bXYM) is an ERC-20 token on Ethereum that represents a share of the XYM held by the bridge on Symbol. It is similar to a wrapped token because it represents XYM on another network, but the conversion rate is not fixed.

In other words, bXYM represents proportional ownership of native tokens held by the bridge, including any rewards that accrue while those native tokens are held.

When users bridge XYM, they send it to the bridging account on Symbol and receive bXYM on Ethereum. When users redeem bXYM (or "unbridge" it), they send it to the redeeming account on Ethereum and receive XYM on Symbol.

The bridge's Symbol account can earn additional XYM, for example through harvesting. When that happens, the total amount of XYM held by the bridge increases while the amount of existing bXYM stays the same. As a result, each bXYM represents a claim on a slightly larger amount of XYM.

For example, with 1'000 outstanding bXYM and 1'000 XYM in the bridge account, both tokens are effectively at a 1:1 rate. If the bridge account later earns 500 additional XYM, the same outstanding bXYM now represents a claim on 1'500 XYM. Redeeming after that point returns more XYM per bXYM than before.

This conversion rate is applied before fees are deducted, so it does not exactly match what the user finally receives. See Fees and Payout Amounts below.

Notes

• Besides bridging and redeeming, the only operations that modify the amount of XYM held by the bridge are harvesting and donations.

  Since these operations only increase the bridge's balance, bXYM will usually be worth more than XYM and bridging one XYM will result in receiving less than one bXYM.

• The conversion rate between XYM and bXYM is separate from the market price of bXYM on a DEX, which depends on liquidity and trading activity.

  Arbitrage can help the DEX price track the redemption value, but the bridge does not control or guarantee that market price.

Process

A bridge request has five conceptual stages. The user only needs to initiate the first one and the rest follow automatically.

1. Deposit

   The user sends tokens to the bridge account on the source network that handles the operation they wish to perform (bridging, redeeming, or swapping). The transaction includes the destination address on the target network.

2. Detection

   The bridge monitors the source network and detects the incoming transaction. It checks that the request is valid, for example, that it transfers the expected token and contains a valid destination address.

3. Finality

   The bridge waits until the source transaction is considered sufficiently final. See Finality and Processing Time below.

4. Conversion

   The bridge calculates the payout amount according to the selected operation and an external price provider if needed. The bridge also accounts for network fees and any bridge fee configured by the operator. See Fees and Payout Amounts below.

5. Payout

   The bridge submits a transaction on the target network, sending the converted tokens to the requested destination address. It then tracks that outgoing transaction until it is finalized.

Workflows

An application like the Symbol Mobile Wallet takes care of the steps described above and offers a streamlined user interface for the following workflows.

Invalid requests are not refunded

It is strongly recommended to operate the bridge through an application rather than interacting directly with its accounts because invalid transactions are not refunded.

Bridging XYM to bXYM

The user starts the process by announcing a standard transfer transaction on Symbol, setting:

• Transaction recipient: The address of the bridging account on Symbol.
• Transferred Mosaic: XYM.
• Transaction Message: The unencrypted address of the account on Ethereum that should receive the bXYM.

The bridge service detects the transfer and starts the process described above.

Redeeming bXYM to XYM

The user starts the process by submitting a transaction on Ethereum, setting:

• Transaction recipient: The address of the redeeming account on Ethereum.
• Transferred token: bXYM.
• Additional transaction data: The address of the account on Symbol that should receive the XYM.

The bridge service detects the transfer and starts the process described above.

Swapping XYM to ETH

The user starts the process by announcing a standard transfer transaction on Symbol, setting:

• Transaction recipient: The address of the swapping account on Symbol.
• Transferred Mosaic: XYM.
• Transaction Message: The unencrypted address of the account on Ethereum that should receive the ETH.

The bridge service detects the transfer and starts the process described above.

Swapping back ETH to XYM

This workflow is not directly supported by the bridge but can be performed in two steps:

1. Swap ETH for bXYM using a DEX.

   The Symbol Syndicate maintains a Uniswap pool for this purpose.

2. Redeem the bXYM to XYM using the redeeming workflow above.

Fees and Payout Amounts

Bridge requests cost more than the amount deposited. The user pays the source-network transaction fee when submitting the request, and the bridge pays the target-network transaction fee when sending the payout. The bridge deducts that target-network fee from the payout amount in the following way:

Operation	Fees involved
Bridging	The bridge pays the payout transaction fee in ETH, uses a price provider to estimate its value in bXYM, and deducts it from the payout amount.
Redeeming	The bridge pays the payout transaction fee in XYM and deducts it directly from the payout amount.
Swapping	The bridge pays the payout transaction fee in ETH and deducts it directly from the payout amount.

Depending on configuration, the bridge can also charge a conversion fee. This fee is separate from blockchain transaction fees.

Finality and Processing Time

The bridge does not act on a transaction the moment it first appears. Instead, it waits until the transaction is considered sufficiently final for the source network. This protects the bridge from acting on transactions that could still be rolled back or replaced.

Processing time depends on several factors:

• The block time of each network.
• The finality rules used by each network.
• Network congestion and transaction fees on the payout network.

For this reason, bridge requests are not instant even when both blockchains are healthy.

Note

The bridge does not provide slippage protection, so the received amount can vary.

Invalid Requests and Limits

The bridge can only process requests that match the rules of the selected workflow. Requests generally need to send the expected token to the correct bridge account and include a valid destination address for the target network.

Invalid requests are not refunded

Transfers to the wrong bridge account, or transfers that send unsupported tokens, omit the destination address, encrypt the message, or exceed configured limits are not processed and the funds remain in the bridge account as donations.

Applications like the Symbol Mobile Wallet perform routine checks before submitting a request to minimize this risk.

When using the bridge manually by sending a transaction to any of its accounts, users should always check the bridge's supported token, direction, destination-address format, fees, and limits before submitting a request.

Trust Model and Responsibilities

The bridge is a service operated outside the blockchain protocol. It controls accounts, observes transactions, calculates payouts, and signs outgoing transactions. Users therefore trust the bridge operator to run the service correctly, maintain enough liquidity, protect signing keys, and handle invalid or delayed requests responsibly.

The bridge also depends on the following external services:

• Price providers to calculate exchange rates.
• Network API nodes to read blockchain state.
• Block explorers and status APIs to report progress.

Problems in any of these dependencies can delay or interrupt bridge operation.

This means the bridge should be evaluated separately from Symbol itself. Symbol can finalize the user's deposit correctly, but the bridge operator is still responsible for detecting that deposit and completing the payout on the other network.

For Further Information

• Symbol Bridge implementation source code.
• Symbol Bridge API specification.