Allowances
Estimated time to read: 2 minutes
Allowances activate Arcana Network's Chain Abstraction feature.
Allowances must be set up to enable a chain abstracted transaction that involves multiple source chains. With allowance setup, users can unlock the fragmented liquidity across multiple chains in their EOA. Effectively, this lets the user spend on any destination chain—even with insufficient balance on the destination chain.
By approving allowances for chain abstraction on the source chains, users can:
- Spend anywhere with funds from multiple chains.
- Bypass bridging to enable liquidity on the destination chain.
- Transact seamlessly across chains.
- Setup once, use repeatedly.
As part of allowance setup, users permit Arcana Vault contracts on the source chains to collect the funds required to execute the transaction seamlessly on the destination chain.
Note that the allowance set up transaction itself requires gas fee. This gas fee is payable by the user. In some cases, Arcana may sponsor gas fee for the allowance setup.
By default, the allowance limit for each supported chain is set to unlimited. This default setting ensure that all the supported tokens on the chain can be utilized as the unified balance available to spend. The protocol can collect the required funds according to the allowance limit and pay for the chain abstracted transactions on any destination chain. Developers can choose to modify the default allowance limits via the setOnAllowanceHook.
How Allowances Work?
Here is how the allowances enables chain abstracted transactions:
- User approves the protocol to access funds from multiple source chains.
- Protocol unifies user balance across these chains.
- Unified funds get deposited into protocol vaults.
- User can now transact on any destination chain using your combined balance.
Allowance Setup
Users have two allowance setup choices that differ by:
- Which chains are included for chain abstraction allowance setup?
- Who pays the gas fees for the allowance transaction?
| Option | Chains included | ETH Balance Required | User Pays Gas Fee | Arcana Pays Gas Fee |
|---|---|---|---|---|
| 1. | Ethereum Mainnet + Avalanche + L2 chains | Yes | $1-$5 (as per current Ethereum Mainnet gas price) |
Avalanche + L2 only |
| 2. | Avalanche + L2 chains | No | Nothing | All gas sponsored |