Since bridging across to Cardano, a question has come up several times about the circulating supply of PBX tokens. To avoid any confusion, we decided to clarify some technical details about what happens to tokens during the bridge process.
The concept of bridging often conjures visions of tokens traveling from one chain to another. However, the reality is more intricate, involving a system of locking and releasing tokens rather than a literal transfer.
Native Ethereum tokens, for instance, are confined to the Ethereum chain, and similarly, native Cardano tokens cannot leave their host chain. During bridging, tokens are locked within a bridge system on one chain, and new tokens on the target chain are either unlocked by the bridge or freshly minted.
For example, in the case of Chainport, users send their ERC-20 PBX tokens to Chainport’s wallets, which release the corresponding Cardano native PBX tokens to the user’s wallet minus any transaction fees.
As we were building for Cardano, we minted mirror tokens of our circulating supply as Cardano native tokens approximately eight months ago. The Cardano tokens are locked and will only be released as and when ERC-20 PBX tokens are locked.
Over 12% of the circulating supply of PBX tokens has been released on the Cardano chain. This equates to over 12% of the ERC-20 PBX tokens being locked within Chainport. This approach and our caution to avoid accidentally inflating the supply of PBX tokens is why bridging to Cardano took so long.
As Deniz, our CEO, recently explained, “The Chainport minting and releasing mechanism was different and wouldn’t work for our token, so we were waiting on Chainport’s internal updates, how they mint and lock and release tokens between EVM and Cardano. About three weeks ago, we had the update that they were now ready to support the tokens.”
Simon, our CTO, elaborated further, “With Chainport, we were in talks for quite some time. They were always our preferred bridging partner…The problem we had for a long time was that our token on Cardano was minted with a fixed supply. So we had to wait for Chainport in order to support this kind of token.”
He continued, “How Chainport usually works is if you bridge over, let’s say, an asset from Ethereum to Cardano, they will mint the Cardano version during their bridge automatically. The problem we had is that we already had an existing token on Cardano as well as Ethereum, so effectively, the bridge couldn’t work because, at that time, it would only work if you could mint one side.”
Now that Chainport can release the Cardano token rather than minting new ones, PBX has deployed successfully with them. This way, we can ensure that the total circulating supply of PBX remains static across all chains.
Another question that often arises with bridges is their security, as there have been many exploits in the past that drained significant value. Because we felt that Chainport was one of the safest bridges available, we chose to wait for them to be ready rather than sacrificing security for expediency.
Simon’s extensive technical experience provided invaluable insight, “In the past, I’ve worked with a couple of different bridging projects, and Chainport is definitely one of the safest given that they have a different approach to a lot of other bridges.”
Adding, “Some of the key characteristics of Chainport as well, for example, are that 90% of the tokens they have locked up in their bridge are moved to cold wallets. So in the very rare case that a hack could happen, only 10% of the tokens that are locked in the Chainport bridge could actually be exploited. That’s a much lower risk factor when compared to many other bridges.”
As we look to deploy across other chains in the future, we’ll likely stay with Chainport as the feedback from our community has been highly positive. We have always been committed to deflationary tokenomics for PBX, and no matter how many chains we appear on, the total circulating supply of PBX will never increase.
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