How does this Bridge make a profit exactly?

[Lakai01]

I am 100% definitely not saying they are a scam, because they could be 100% legit and a great place. However, it is always valuable to be always careful about every business that offers a service for nearly free, or at a loss. Because their aim could be getting as many customers as they can, and in return they could end up with basically stealing your money when they have enough money on their accounts.

Synapse is a very well-known and very frequently used bridge (I think it was once the most frequently used bridge of all), so the service itself is certainly trustworthy.

However, Synapse does not earn its money by running bridges per se, but with additional services that it also sells via the platform. Bridging is therefore more of a cross-financed feature.

[cryptoaddictchie]

Found a bridge called Synapse. I put in my details about which chain to use and to what destination chain. It was only $2.5 cost. I was like wow, amazing. I assumed it would be $2.5 plus some other gas fees.

Wow this is an L1 to L2 right? It seems you manage to brudge during a very low gas fee plus that bridge is wow on operating at a lower fees. Its quite unusual for a bridge to charge little compared to what was the actual cost but thats how they wanna entice users by offering lowered fees. Somehow they will get it back from other product or maybe impose an increase later on.

With too many bridge services out there, one must have a standout offer so customer would use them than others. I guess this is their strategy.

[jaberwock]

Aside from that explanation, I highly believe that in some transactions, their fees are quite higher than what the OP paid for his transaction. As the gas fee depends on activity of the network, it doesn't mean he will always get a reasonable or lower gas fee. He was just lucky at the time of his transaction. For sure, the platform is not running their business just to go bankrupt. As others have said, they are surely earning profit in some transactions or other services.

I think there is a site that we can check, if how much is current gas fees or transaction fees. The one that I remember is Gas Station but I'm not sure if it was only limited to ETH or not, although there might be other sites similar to this which caters other cryptos.

With the help of them, it is truly possible to always have a reasonable fee. This is not only for the impatient people or those who are always in a hurry but they might still make more than their gas/transaction fees if they will be on time with their transactions/deals. This is the reason on why the bridging platforms can also earn an income. They can also set up some ads if they want to, to earn even more.

[shinratensei_]

pretty sure thats because we are still in early phase, moving forward they could impose fee.
some other bridges though already impose fee and sometime the money we received in the other blockchain also greatly reduced to pay for the fees.

each of these bridges project actually have differing business model anyway, some bridge are more expensive than other depending on routes, i think bridge like stargate consistently making comparation with other bridge and it shows difference in the fee alone, probably due to code not gas optimized or some reason.

also to remember, these bridges also usually have the plan of TGE up to their sleeves where the founder and the entire team got their big share of allocation, we can say that they are investing for future TGE where they can reap much more money than just imposing fee where the competition is fierce, sort of offering free service but gaining all the profit later on in just one event such as TGE, where they gonna release governance token, moving on later, there might be proposal about the imposing of fee in the future if its getting sufficient vote from the governance token holders.

so its sort of business scheme, not to mention that these bridges usually got seed funding from big investors, they probably already have enough money to run for several years.

[bettercrypto]

I think it's not like that; they still have a profit there. I don't believe that they don't have a profit from such a transaction. Maybe the OP just thinks that the bridging that he did on the platform doesn't make any money, but the truth is that there are still small earnings from the transaction that happened.

Then it's a bit like I'm not that familiar with Synapse, but when I looked at Coingecko, it turns out that there are many exchanges where it's listed. You can transact on CEX platforms so that you don't end up with a fee like that. But if that's what the OP wants, there's nothing we can do if he wants the Dex platform.

[FinneysTrueVision]

It’s 7% because they only sent a dollar. If they sent $10,000 I am pretty sure the fees wouldn’t of been $700. It was some transaction fee or transfer fee that they deducted from the USDC.

With stablecoins some chains have slightly different prices but they are never off by 7%. Try and find some other transaction which has a larger value being bridged than $100 and see if the fee will still be 7%?

Of course, the percentage will be smaller for larger transactions. A small percentage can still represent a decent profit. Here is a transaction where a user bridged 525.13 USDC on Ethereum and received 522.69 USDC on Base. The difference is 2.44, even though the bridge contract only used $0.004 in gas on the Base network. https://explorer.synapseprotocol.com/tx/1990271054d10b0af3ffc5aa31b92a89ca63b41e8dda604d0fda709f5b9c6b99?chainIdFrom=1&chainIdTo=8453

The only transactions they don’t seem to profit from are when bridging from any network to Ethereum, because Ethereum fees are so high. The spread is only enough to break even or have a slight loss, although there are very few transactions where Ethereum is the destination chain.

[adaseb]

It’s 7% because they only sent a dollar. If they sent $10,000 I am pretty sure the fees wouldn’t of been $700. It was some transaction fee or transfer fee that they deducted from the USDC.

With stablecoins some chains have slightly different prices but they are never off by 7%. Try and find some other transaction which has a larger value being bridged than $100 and see if the fee will still be 7%?

Of course, the percentage will be smaller for larger transactions. A small percentage can still represent a decent profit. Here is a transaction where a user bridged 525.13 USDC on Ethereum and received 522.69 USDC on Base. The difference is 2.44, even though the bridge contract only used $0.004 in gas on the Base network. https://explorer.synapseprotocol.com/tx/1990271054d10b0af3ffc5aa31b92a89ca63b41e8dda604d0fda709f5b9c6b99?chainIdFrom=1&chainIdTo=8453

The only transactions they don’t seem to profit from are when bridging from any network to Ethereum, because Ethereum fees are so high. The spread is only enough to break even or have a slight loss, although there are very few transactions where Ethereum is the destination chain.

Yeah I noticed this also. Almost all the bridges except from/to Ethereum are extremely cheap. So I am thinking they take a loss when someone bridges into ETH and if someone bridges in reverse from say ETH to ARB they will break even on that fee.

Since the user bridging from ETH will have to pay a large fee to initiate the bridge while the destination chain such as ARB will have a very low fee.

Ever since the last ETH fork, it’s extreme cheap to perform most transactions on L2 networks. Hopefully they don’t start to add fees to destination ETH bridges because it’s affordable at the moment.

But if ETH fees go back to the constant 50-100 gwei congestion, then I am pretty sure they won’t be eating a $50 loss on every transaction.

[Cryptoababe]

I don't think bridges will ever operate at a loss. Although there might be a loss in some transactions, it won't be for all transactions. Most people prefer to transfer from the Ethereum network to other networks, and they mostly pay gas fees. As long as people continue to bridge out of Ethereum to other networks or from one L2 network to another L2 network, bridges will always be profitable.