Earlier this week, Golix, the Zimbabwe payments company that is using digital currencies to solve Africa’s payment problems announced its policy on cross-chain deposits
What is a cross-chain deposit?
The question that some people have been asking is — what is a cross-chain deposit?
This occurs when someone sends their tokens from one cryptocurrency blockchain to another different cryptocurrency blockchain. An example would be a holder of bitcoin sending it to a Bitcoin Cash address.
In Golix’s statement, the company highlighted how there would be fees attached to coin recovery that follows cross-chain deposit and that the exchange does not recover coins or tokens that are not listed or supported on the site. There was also a breakdown of the fees.
Golix Cross-Chain Deposit Recovery Fees
According to Golix, mistakenly sent BTC sent to derived coin accounts will have a flat recovery fee of 0.05 BTC. This can be, for example, a BTC deposit to a BCH address. Any amounts less than 0.05 will be lost forever.
ERC-20 tokens sent to other ETH addresses attract a recovery fee of 0.5 ETH. For example, if it is a BNB to ETH address, then the fee applies. If the amount is below 0.5 ETH, then the coins will be lost forever.
A complicated problem for digital currencies exchanges
For digital currencies exchanges — Golix included — the recovery of cross-chain deposits is time-consuming and has been flagged as a complicated and dangerous process.
Exchanges face the risk of using their resources with no return while trying to recover deposits because it’s not all cross-chain deposits that can be recovered. The success depends on which currency was mistakenly sent and to which address.
All these factors have a bearing on how difficult and time-consuming it can be, along with concerns tied to the security risks that the recovery process brings up.
The recovery won’t happen instantly. Golix says it will aim to recover these deposits in 14 days and it has urged people to be patient seeing that there is usually a significant amount of mistakenly sent deposits that need to be resolved at any given time.
There is some comfort in the clarity that Golix has provided for such deposits. However, all traders in digital currencies are still encouraged to be very careful about where they are sending their cryptocurrencies.
Golix has a growing customer-care team that is always available to attend to all issue regarding deposits and trades which will help avoid complications that can arise form a lost deposit.