Transferring stablecoins from Binance Smart Chain (BSC) to Polygon (MATIC)

As I write this, it has been a couple of weeks where are lot of DeFi activity has started booming on Polygon. There are interesting yield opportunities arising out of this as platforms such as Sushiswap and Curve are incentivizing users to provide liquidity via locking their tokens. Polygon has partnered with these platforms to provide additional MATIC rewards for locking liquidity.

However, moving your tokens from say BSC to Polygon incurrs a lot of fees by intermediaries. If you are using the Ethereum network to move over your funds via the Polygon Etheruem PoS bridge, you are likely going to incur a lot of transactions fees. While the whales may not consider this a cost, humblings such as myself find it more difficult to stomach these costs because of the sheer percentage of your capital that ends up getting consumed in transaction fees.

However cross chain swaps for stable coins are available through risky beta software xPollinate. But moving funds across to Polygon is not possible because of lack of liquidity. As I experimented moving tokens over this bridge, I was not sure how to interpret the 'Exit Liqudity' metric. Does it mean exiting liquidity from BSC to MATIC or MATIC to BSC. So I put this to test.

I attempted to move USDC 100 from BSC to MATIC when the Exit Liquidity shown for MATIC was low and got a message that there was insufficient liquidity (see screenshots).

This confirmed for me that Exit Liquidity means how much liquidity is availble on the Destination Chain if you wanted to move funds to the destination chain. Understanding this will also allow you to be aware of, and subsquently be able assess and manage this risk when you wanted to extract funds off the Polygon chain.

Shuaib Mohammad

Shuaib Mohammad