Detailed Explanation of Account Abstraction Multi-Chain Relay Protocol Biconomy

In 2016, Vitalik Buterin first proposed the concept of account abstraction, aiming to enhance the functionality and flexibility of wallet accounts through smart contracts. Account abstraction, fully known as Account Abstraction (AA), aims to improve the flexibility and functionality of smart contract accounts.
In traditional concepts, accounts in blockchain networks are divided into Externally Owned Accounts (EOA) and contract accounts. EOAs are directly controlled by users, who sign transactions with private keys; while contract accounts are controlled by code, processing transactions through smart contract logic. The goal of account abstraction is to blur the lines between the two, granting contract accounts more functionality while enabling EOAs to possess the flexibility of smart contracts.

## 1. What is Biconomy?

Nowadays, Web3 applications face significant barriers in user adoption, namely extremely high user onboarding and poor transaction experience. Almost every interaction with a dApp is a complex affair for users. Compared to the intuitive web2 products people are accustomed to, current dApps remain quite inconvenient in operational practicality.
Biconomy aims to take on the responsibility of enhancing the user experience in blockchain and decentralized applications (dApps). By addressing the usability issues of blockchain, it provides users with seamless cross-chain transaction solutions and offers developers simplified interfaces to build and optimize the transaction experience of applications. Biconomy's flagship feature is its multi-chain support and integration with smart contracts, allowing users to transact across multiple blockchain platforms, reducing complexity and improving transaction efficiency.

As a leading developer tool provider, Biconomy focuses on simplifying the Web3 experience, providing users with more convenient and efficient on-chain interactions. Through cross-chain interaction support, gasless transaction mechanisms, and solutions that allow the use of other ERC-20 tokens to pay gas fees, Biconomy is lowering the barriers to DApp usage, offering end users a seamless on-chain experience.
Biconomy's core goal is to make Web 3.0 more user-friendly, interoperable, and composable. Users can expect a simple, intuitive multi-chain experience, enjoying gasless efficient operations whether connecting wallets on any dApp or transferring assets between different chains or layer 2 networks (L2/rollup). This technology significantly lowers the threshold for ordinary users to participate in DeFi or other on-chain activities.
The cross-chain transaction infrastructure Hyphen launched by Biconomy provides developers with an easy-to-use API. Hyphen achieves fast, low-cost cross-chain transfers by maintaining token liquidity across different chains. When users deposit tokens on one chain, Hyphen immediately completes the transfer on another chain and automatically balances when there is a one-way liquidity imbalance. This mechanism not only enhances cross-chain transaction efficiency but also provides additional earning opportunities for liquidity providers.
The networks supported by Biconomy include mainstream chains such as Ethereum, Matic (Polygon), xDAI, Binance Smart Chain (BSC), Moonriver, Edgeware, and it also provides tool support for well-known DeFi projects like Curve Finance, Idle Finance, Perpetual Protocol, Decentral Games. In the future, Biconomy will continue to expand more public chains and cross-chain applications, further reducing users' transaction costs and usage barriers.
Through its innovative infrastructure and developer tools, Biconomy is bringing a simpler, lower-cost experience to the Web3 world, opening up broader access to blockchain technology for users and developers.

## 2. Biconomy's Operating Model

Biconomy provides a set of infrastructure designed to simplify user experience, enhance interoperability, and lower the barriers to using Web3. Its architecture consists of three main products: Meta-Transactions, Hyphen Transactions, and Modular Smart Accounts, with the core mission of helping developers simplify the development process of decentralized applications (dApps) by providing ready-to-use APIs and SDKs, allowing users to enjoy a smoother, unobstructed on-chain experience.

1. Meta Transactions: Achieving a gasless user experience

Biconomy's meta-transaction mechanism allows dApp developers to pay users' gas fees on their behalf, enabling users to complete on-chain transactions without holding native tokens (like ETH). Users can focus solely on the functionality of the dApp without worrying about paying gas fees. This feature significantly enhances the adoption rate of dApps.

• User Experience: Front-end operations are simple, and users do not need to understand or deal with complex gas mechanisms.
• Developer Advantage: dApp developers enhance user experience by covering gas fees, improving user retention and engagement.

1. Hyphen: Enhancing Cross-Chain Interoperability

Biconomy's Hyphen cross-chain infrastructure provides fast and secure cross-chain asset transfers, allowing users to operate smoothly across multiple blockchains without switching networks.

• ERC-20 Token Gas Fee Payment: Users can pay gas fees with any ERC-20 token instead of the native token of a specific chain (like ETH or BNB), greatly simplifying cross-chain interactions.
• Automatic Liquidity Balancing: Hyphen maintains token liquidity across different chains and automatically balances excessive one-way output liquidity, ensuring smooth execution of cross-chain transactions.

1. Role and Value of the BICO Token

Biconomy's native token BICO plays an important role in the entire ecosystem:

• Network Incentives: BICO incentivizes node operators, liquidity providers, and other ecosystem participants to support the network.
• Governance Function: BICO holders can participate in network governance, proposing or voting on key decisions regarding protocol upgrades or other network developments.
• Staking and Earnings: Users can stake BICO to earn network rewards while supporting the security and decentralization of the Biconomy network.

## 3. Core Technology of Biconomy

Currently, Biconomy's development direction mainly focuses on the following three areas:

1. Cross-Chain Applications: Supporting fast, seamless asset transfers between different public chains.

Biconomy integrates with multiple Layer 2 solutions (such as Polygon, Optimism) to enhance transaction speed and reduce transaction costs using these scaling solutions. At the same time, these integrations also promote the application of account abstraction across different blockchain platforms.

2. ERC-20 Token Gas Payment: Allowing users to pay gas fees with any ERC-20 token, enhancing user experience.

Biconomy's Relay Protocol not only provides users with convenient on-chain operations but also brings new possibilities for dApp developers and third parties:

• Enhanced User Retention: The gasless experience reduces user churn, especially for new users.
• Flexible Business Models: Developers can attract more users by subsidizing gas fees or collaborating with third parties to inject more vitality into the ecosystem.

Through Biconomy's innovative technology, the barriers to using Web3 have been significantly lowered, creating a broader user base for on-chain operations. In the future, as more projects integrate the Relay Protocol, this gasless transaction experience is expected to become the new standard in the Web3 world.

3. Zero Gas Transfer Applications: Providing users with a truly zero-cost on-chain transaction experience.

For many new users, gas fees are the first barrier to participating in on-chain operations. In traditional on-chain interactions, users must hold ETH or the native token of the chain to pay transaction fees, which undoubtedly increases the complexity of using DeFi, NFTs, and other applications, especially for Web3 newcomers.
Biconomy achieves true gasless transactions through its Relay Protocol, providing users with a friendlier, more seamless on-chain experience. Users do not need to hold ETH as gas fees when using dApps. Instead, Biconomy greatly simplifies the payment process through the following mechanisms.

By providing gasless transactions and cross-chain interoperability, Biconomy addresses user pain points in traditional blockchains, making the development and use of dApps more efficient and convenient. At the same time, the introduction of the BICO token provides sustainable economic incentives for network participants, ensuring the long-term growth and prosperity of the ecosystem.

## 4. Biconomy Team and Funding Information

The Biconomy network was created by an experienced team from the crypto and technology fields. The founders of the team include Ahmed Al-Balaghi and Nitin Gaur, who are dedicated to providing easy-to-use and powerful infrastructure tools for decentralized application developers. Biconomy attracted support from multiple investors and partners early in its establishment, laying the foundation for the platform's rapid development.
Biconomy secured $1.5 million in funding in early 2021, followed by $9 million in July 2021, and raised $11.5 million in a public offering on Coinlist in October.
In March 2024, Biconomy completed another round of strategic financing, although the amount was not disclosed, its investors include top institutions such as Jump Capital, Borderless Capital, Consensys Ventures, Taisu Ventures, Manifold Trading, Side Door Ventures, and Blockchain Founders Fund. This financing provides Biconomy with further momentum to expand its cross-chain transaction infrastructure and gasless transaction solutions, also indicating its increasingly solid position in the Web3 ecosystem.

## 5. BICO Token Economics

BICO is the native utility token of the Biconomy ecosystem. Its total supply is 1 billion tokens, of which 667 million tokens (66.7%) are in circulation. As the native token of the Biconomy ecosystem, $BICO serves multiple functions including payment, incentives, governance, and staking, providing continuous development momentum for the network while creating multidimensional participation and earning opportunities for users. Its main uses include the following four aspects:

1. Payment of Network Fees

Users need to pay a certain amount of BICO as fees when using Biconomy's cross-chain transfer, gasless transaction, and other services. By using BICO for payment, users can achieve fast and efficient interactions across multiple chains.

2. Incentive Mechanism

Used to incentivize various participants who support the network, including ensuring the stability of the operating node network and providing liquidity for cross-chain functions like Hyphen, ensuring users can smoothly complete asset transfers.

3. Governance Participation

BICO holders can submit improvement proposals to promote technical upgrades or operational adjustments of the protocol. They participate in key decisions through a voting mechanism, such as protocol parameter adjustments or the launch of new features.

4. Staking to Protect the Network

Node operators must stake a certain amount of BICO to participate in network operations, and the staking behavior provides security for the network. Ordinary users can also earn rewards by staking BICO, protecting the network while enjoying additional earnings.
The distribution of $BICO is as follows:
Community: 38.12% (381,200,000 BICO)
Foundation: 10% (100,000,000 BICO)
Team and Advisors: 22% (220,000,000 BICO)
Private Sale: 12% (120,000,000 BICO)
Seed Round: 6.38% (63,800,000 BICO)
Pre-Seed Round: 6% (60,000,000 BICO)
Public Sale: 5% (50,000,000 BICO)
Strategic Investors: 0.5% (5,000,000 BICO)

## 6. Future Value Analysis of $BICO

As a key platform for decentralized finance (DeFi) and cross-chain transaction infrastructure, Biconomy demonstrates its strong technological innovation capabilities and market prospects. By providing gasless transactions, supporting multi-chain interoperability, and simplifying user experience, it has become an important infrastructure in the Web3 ecosystem, offering dApp developers and users lower transaction costs and more efficient operational experiences.
Although the crypto market is volatile, Biconomy, with its unique technological advantages and market positioning, is expected to achieve sustained growth in the future. As the demand for decentralized applications increases and the importance of cross-chain interoperability becomes more apparent, $BICO is likely to become a leading asset in this field. Investors can benefit from the growth in market demand in the short term, while long-term holding may also yield substantial returns.