To complete any transaction on a blockchain for DeFi activities, users are required to maintain native tokens in their portfolio for all the chains. A native token is a base token of the blockchain, for example, Ether (ETH) is the native token used by the Ethereum blockchain for verifying transactions. These native tokens are essential for paying the gas fees without which the transaction cannot even be initiated.
At Okto, we believe in simplifying the experience for our users and have made it easier for you to pay the transaction fee. In DeFi, there are multiple blockchains and each chain requires a different token to pay the fee for executing transactions. With Okto, you do not need to go through the hassle of holding native tokens of each blockchain. We are simplifying it for you so that you can focus on buying and selling tokens of your choice and earn passive returns effortlessly rather than worrying about holding native tokens to pay for each transaction.
We have developed a solution in such a way that in case you do not hold native tokens, you can still complete your transaction by paying in stablecoins such as the USDT or any other token of your choice. Moreover, you also end up paying lower fees through this simplified solution as explained in the next section.
How does Okto provide an easy, no-click experience to its users for completing transactions?
- We calculate the gas fees required for your transaction.
- Next, we check for sufficient native tokens in your portfolio for the transaction. If you have the respective native token, it is used for completing the transaction.
- If No, we follow the steps below:
a. Since the gas fee is always paid in the native token, we airdrop the native token to your wallet by deducting an alternative token from your wallet.
b. To facilitate a, first, we check which token can be spent for the transaction from your wallet, preferably a stablecoin. If you hold a sufficient amount of other tokens that could be used to pay for the gas fee, we automatically convert that into the native token and airdrop it to your wallet.
c. You can then use this native token to complete your transaction. Voila!
What is even better is that all the above steps are automatically performed at the back-end and all that you have to do is simply click on the token that has been airdropped to you to pay for the gas fee.
Lower Gas Fees
As we deposit “a native token" & deduct "an alternative token" to complete your transaction, you end up paying a lower gas fee as compared to using Swap to convert your crypto to a native token. A swap usually includes higher fees as it includes approval fees, protocol fees, etc. Hence, we make it cheaper for you to execute the trade.
Let us understand this further using an example:
CASE 1
- The user wants to buy DOGE by paying $10 USDT
- If it is on Binance Smart Chain, the gas fee should be paid in the native token which is the BNB. Let’s say the gas fee is $0.5
- User pays $10 USDT + $0.5 in BNB
- User receives DOGE in return and the transaction is completed
CASE 2
- If a user doesn’t hold BNB to pay for the fees, he will need to get BNB first to execute the transaction. There are two options available to him.
Option 1
o User buys BNB on a platform outside of Okto, then deposits it to Okto to facilitate the transaction. Once the transfer is completed, the user can continue following the steps as in CASE 1. However, this is a consuming process and could lead to high fees as well due to transfer fees from the other platform to Okto.
Option 2
o Okto automatically deposits $0.55 worth of BNB to the user’s wallet to facilitate the original transaction
o Okto deducts $0.55 worth of USDT in exchange (a gas fee is paid for this transaction too, hence the additional $0.05 worth of BNB)
o Remaining $0.5 BNB is used as the gas fees for executing the trade to buy DOGE coin and the process continues as in CASE 1.
This feature of paying the gas fee using other tokens is Multichain which means that it is designed to work across all chains that Okto will be introducing going forward. Please note that going forward, this feature will be built on Smart Wallet technology that will simplify the process and reduce the fee further. Stay tuned as we introduce more chains on Okto within a few weeks.
As you can see, Okto has simplified investing in DeFi for you. You can now easily and effortlessly complete your transaction without holding individual native tokens of each chain and at lower gas fees!
