What is OFT

Omnichain Fungible Tokens (OFTs) standard developed by LayerZero enables a token to be natively sent between blockchains. Here are the significant features it introduces.

• No third-party contracts (bridges) are needed anymore.

• Cross-chain Composability: able to call any contract after a successful transfer.

• No requirement for liquidity (no Pools on chains for transfers).

• Future-proof: Each OFT is able to add more (even not existing yet) chains.

• Total supply is capped across all connected blockchains.

• Transferability between EVM and non-EVM chains (e.g. Aptos).

• Standard used by BTC.b: Allgate wants to make it common for any Token.

Allgate’s mission is to make it possible for any token (new and existing) to become OFT. Our vision is the emergence of Omnichain DeFi which we’ll explain and analyze in the next article.

OFT deployment via Allgate

Having that said, it’s important for Project Deployers to know how to use the OFT standard. Let’s answer this question in two scenarios:

• A project’s token doesn’t exist yet on a given chain: Create a new OFT.

• A token that already exists on a given chain to become OFT: Use Migration.

Obviously, Allgate will support both cases, all via a no-code, easy-to-use User Interface.

A) Create a new OFT

Allgate will enable a new OFT deployment via our dApp in a few simple steps:

1. Set Token name, symbol, decimals, and supply.

2. OFT supply is minted to the deployer address.

3. Deploy on each chain you want your OFT to exist on. You can even start with zero supply on a given chain and transfer tokens there from your OFTs on different chains that already have some tokens in circulation.

4. Allgate creates a dedicated OFT Page where Holders can transfer (bridge) between chains. This is just a User Interface for OFT native contract capability.

B) Create via Migration to onboard your existing Holders

1. OFT name and symbol are by default the same as the Migrated Token. The circulating supply is set to zero and will increase along with each migration (Holder’s 1:1 swap from Migrated Token to OFT).

2. Optionally, Deployer can set advanced Migration settings such as starting date, allowlist, etc.

3. A Migration contract is deployed automatically to enable Holders a 1:1 swap between the Migrated Token and OFT.

4. Allgate creates a dedicated Migration Page for Holders to easily migrate to OFT.

5. Allgate creates a dedicated OFT Page where OFT Holders can transfer (bridge) between chains. This is just a User Interface for OFT native contract capability.

6. If your Migrated Token is multi-chain, perform Migration to OFT on each blockchain.

Deployment Examples

Example Scenario 1:

Your token contracts already exist on Ethereum and BNB Chain. You want to connect them.

Use Migrations. For instance firstly on Ethereum and secondly on BNB Chain. Follow the instructions in the dApp (the abovementioned steps). Allgate will give you dedicated Migration Pages for Ethereum and BNB Chain where your Migrated Token Holders will be able to swap 1:1 to the OFT.

Next, you will go to the Dashboard and easily Connect all your OFTs (setting Remotes).

Example Scenario 2:

Your token contracts already exist on Ethereum and BNB Chain. You want to connect them and additionally enter Aptos and Polygon (or more).

After completing the steps described in the first example, you’ll now want to use the “Create new OFT“ option firstly for Aptos and next Polygon (or more chains). Follow a few simple instructions in the dApp (the abovementioned steps) to have your OFTs deployed.

Next, you will go to the Dashboard and easily Connect all your OFTs (setting Remotes).

Example Scenario 3:

Your token doesn’t exist yet anywhere. You want it on all EVM chains and Aptos.

Use the “Create new OFT“ option for each EVM chain and Aptos. Follow a few simple instructions in the dApp (the abovementioned steps) to have your OFTs deployed.

Next, you will go to the Dashboard and easily Connect all your OFTs (setting Remotes).

OFT management via Dashboard - Connecting, Analytics, and more.

Connecting OFTs together:

The last step described in each example refers to setting Remotes which is nothing more than telling your OFT on each chain to “trust” only a given address on a different chain (OFT address on that chain). This creates Connections between all your OFTs and therefore enables them to communicate (transfer) across chains. Setting Remotes is designed to reject cross-chain transactions from unauthorized contracts on different chains.

Analytics:

Track statistics, charts, transactions, and migration status of your OFT on all chains. Understand what’s happening, and make better conclusions.

Omnichain DeFi is coming

We believe that the popularization of the OFT standard as a native cross-chain primitive will lead to the emergence of Omnichain DeFi and other Web3 use cases.

In 2022 Decentralized exchanges alone executed $854 billion in trading volume. The idea of gradually interconnecting (with full composability) protocols such as Uniswap as well as other DeFi protocols categories like Lending (e.g. Aave, Compound), Derivatives, Perpetuals, Yield Farming, Stablecoins, and so much more, can result in the creation of multi-trillion dollar DeFi market’s segment. We’ll dive more into the concept of Omnichain DeFi in the next article.