Revenue Streams of Routers
As a reward for providing their routing services, routers receive two sources of revenue:
Relayer Submission Fees
Whenever a user broadcasts to the Connext network by signaling their intention of doing a cross-chain transfer, routers can respond with sealed bids.
- The bids include the routers’ commitment to fulfill the transaction within a predefined time and price range. Connext then matches the user to the cheapest bid.
- Once the router detects an event that contains their signed bid, the router submits the transaction.
To incentivize the router to complete the transaction, the amount locked on the receiving chain is reduced by the auction fee, which the router receives.
The user who initiated the broadcast signs a message once the router has prepared the transaction. The message is sent to a relayer who earns a fee for submission.
- The relayer is typically another router. A relayer is used here to allow users to submit transactions with arbitrary calldata on the receiving chain without needing gas to do so.
- The router then submits the same signed message and completes transaction on sender-side, unlocking the original amount.
Router operators can either act as the router or the relayer of a transaction. It’s not possible to be both for a single transaction. However, node operators can participate both as routers and relayers in the network.