Protocol Concepts
Gas Costs
This section covers SCEA interactions that alter the state of the blockchain network i.e. change a contract or balance of an account on the network.
These transactions carry a cost in gas fees, which are either borne by the dApp platform, or one/both of the transacting parties (buyer/seller).
The gas prices used here are based on a gas cost of 0.25 Gwei on the
Base network, and 100 Gwei on the Ethereum network. However, gas prices on Ethereum vary widely, potentially surging up to 5x during periods of high congestion, and decreasing by 10x during low traffic.USD prices of the assets are based on the price as at the time of this writing (April 2024), ETH is trading at around $2,962.70.The token used for gas payment on a network is referred to as the native token, i.e. ETH is the native token on Base and Ethereum.These values will be used throughout this section.Transaction Points
Point 1: Escrow Account Creation
Point 1: Escrow Account Creation
Only one transaction is required for account creation, which is the transaction to call the SmartContract Escrow Account creation factory function.It is estimated that on an EVM, this can cost up 250,000 Gas units, which is about
0.0000625 ETH (0.19 USD) on Base, and 0.025 ETH (74.37 USD) on Ethereum network.Point 2: On-ramp order (buying crypto)
Point 2: On-ramp order (buying crypto)
As explained previously, an onramp is a transaction where an external buyer wants to purchase assets stored in the SCEA’s
AvailableBalance (i.e. assets not yet locked).While there are 3 possible blockchain transactions that can occur during an on-ramp transaction, for a typical transaction, only 2 of those transactions will ever be processed.-
Lock Liquidity Partner’s Funds in SCEA: before an exchange can occur between the buyer and the seller, the seller’s crypto funds have to be locked in the escrow account. In this case, the seller is the LP. This transaction involves getting the token balance, locked balance and changing the state of the escrow data in the SCEA.
There are two possible scenarios here:
- No Auto-Escrow: The LP has not authorized the
initiator(usually the platform integrating the protocol) to lock funds on their behalf. In this case, the buyer has to wait for the LP to sign and send the transaction (paying gas fees) before the assets can be locked. - Auto-Escrow Enabled: The LP has authorized the
initiatorto lock funds on their behalf. In this case, the mediator will be responsible for sending the transaction to the blockchain, and paying the gas fee.
0.000015 ETH (0.044 USD)on Base and0.006 ETH (17.85 USD)on Ethereum. - No Auto-Escrow: The LP has not authorized the
-
Return Funds to the LP: If the buyer fails to complete the order, or if a dispute is filed and determined in the seller’s favor, then funds have to be unlocked and returned to the LP’s account, as part of their
AvailableBalance(which can be withdrawn at-will). This transaction involves changing the state of the escrow data in the SCEA only. The cancellation can be initiated by the buyer or by the mediator (in the case of a dispute). This is estimated cost around 30,000 Gas units, which comes to0.00015 BNB ($0.084)on BSC, and0.003 ETH ($8.92)on Ethereum. -
Releasing Funds to the Buyer: When the seller confirms that they’ve received the funds paid to them by the buyer, the funds need to be released to the customer’s address as specified at the beginning of the order.
This transaction involves changing the escrow data state in the SCEA and performing an ERC20 token transfer to the buyer. This transaction can be initiated by the LP or the mediator (in the case of a dispute).
This transaction is estimated to cost around 90,000 - 100,000 Gas units, depending on the token being transacted. This would incur a maximum value of about
0.0005 BNB ($0.28)on BSC and0.01 ETH (~$29.75)on the Ethereum network.
Point 3: Off-ramp order (selling crypto)
Point 3: Off-ramp order (selling crypto)
Off-ramping i.e. a Sell order, is slightly more complex than on-ramping. As described in the flow for the SCEA, during a Sell order, the crypto is sent to the LP’s escrow account from the seller’s wallet (EOA) for escrow.There are 4 possible transactions for off-ramping, although, a typical order will only have 3.
When selling a native token however, only 2 transactions may be required.
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Spend Approval: the customer has to first grant approval to the SCEA to spend the exact amount needed for the order. This is a standard part of the ERC20/BEP20 specification, as implemented by several protocols.
The risk of granting spend approval to the SCEA is minimal because the SCEA is not an externally owned account, hence, the escrow account owner (LP) is unable to spend the funds directly from the customer’s wallet.
A typical ERC20 transaction costs around 50,000 gas units, hence, the approval fee is estimated to be
0.00025 BNB ($0.14)on BSC and0.005 ETH (~$14.87)on the Ethereum network. -
Transfer to Escrow: after funds are approved for spending, the funds need to be locked in the escrow account. This process involves checking that allowance has been granted to the SCEA, transferring the specified amount to the SCEA, and locking the same amount.
This is estimated to cost about 100,000 Gas units, which brings the cost of transactions to about
0.0005 BNB ($0.28)on BSC and0.01 ETH (~$29.75)on Ethereum network. -
Refunding Funds to the seller (customer): if the LP fails to complete the order, or if a dispute is filed and determined in the seller’s favor, then funds have to be returned to the customer’s wallet address.
This transaction involves changing the escrow data state in the SCEA and performing an ERC20 token transfer back to the customer. This transaction can be initiated by the TP or the mediator.
This transaction is estimated to cost around 90,000 - 100,000 Gas units, depending on the token involved. This would incur a maximum value of about
0.0005 BNB ($0.28)on BSC and0.01 ETH (~$29.75)on the Ethereum network. -
Releasing Funds to the buyer (LP): When the seller confirms that they’ve received the funds paid to them by the buyer, the funds will be released to the LP as part of their
AvailableBalancewithin the SCEA. This transaction involves changing the state of the escrow data in the SCEA only, and can be initiated by the seller or by the mediator. This is estimated to cost only around 30,000 Gas units, which is0.00015 BNB ($0.084)on BSC, and0.003 ETH ($8.92).
Point 4: Withdrawals from Escrow
Point 4: Withdrawals from Escrow
As explained previously, the owner of the escrow account (typically the LP) can withdraw any
AvailableBalance not locked in an order from their escrow account. The security design of the protocol ensures that withdrawals can only be done to the owner’s original wallet address used to create the SCEA.Only one transaction is needed to withdraw funds from the escrow account. This is the transaction that calls the withdrawal function of the escrow account. This checks the AvailableBalance, ensures it is equal to or above the withdrawal amount requested, then performs a transfer of the selected token to the owner’s address. This transaction can be initiated by the owner or the mediator.This transaction is estimated to cost around 90,000 - 100,000 Gas units depending on the token involved, meaning the maximum value would be about 0.0005 BNB ($0.28) on BSC and 0.01 ETH (~$29.75) on the Ethereum network.