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Overview

Onchain Tokens enable you to maintain a blockchain-based ERC20 representation of any loyalty currency in Snag. When enabled, user point balances are automatically synchronized on-chain at configurable intervals, allowing your loyalty program to integrate seamlessly with smart contracts, DEXs, and other on-chain applications.
Onchain tokens are perfect for projects that want to combine the flexibility of off-chain loyalty systems with the composability and transparency of blockchain technology.

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How It Works

Snag’s onchain token system uses a hybrid approach that combines the best of both worlds:
  1. Off-chain tracking: User balances are tracked in Snag’s high-performance database
  2. Periodic synchronization: Balance changes are batched and synced on-chain at regular intervals
  3. Efficient execution: Batch operations minimize gas costs and maximize throughput

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Synchronization Process

1

Balance calculation

Snag calculates the delta (difference) between off-chain balances and on-chain balances for all users since the last sync.
2

Batch preparation

Users requiring mints or burns are grouped into optimized batches. If the dataset is too large for a single transaction, it’s automatically split into multiple batches.
3

On-chain execution

The relayer executes batchMint or batchBurn transactions to update balances on-chain.
4

Confirmation

Once confirmed on-chain, the sync is complete and balances are updated. The cycle repeats at your configured interval.
Setting a faster sync interval will result in more frequent on-chain updates but will also increase your overall gas costs proportionally.

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Contract Requirements

Snag supports two options for onchain tokens: The SnagHybridERC20 contract is a fully-featured, upgradeable ERC20 token optimized for loyalty programs. It includes:
  • Batch operations: batchMint and batchBurn for efficient multi-user updates
  • Permission system: Granular control over who can send/receive tokens
  • Role-based access: Separate roles for balance updates, admin, and upgrades
  • Upgradeable: UUPS proxy pattern for future enhancements
The contract source code is available in our GitHub repository. Snag will deploy and configure the contract for you from your relayer address.

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Option 2: Custom Contract

If you prefer to use your own token contract, it must expose the following functions: 
// Required functions for Snag integration
function batchMint(address[] calldata to, uint256[] calldata amounts) external;
function batchBurn(address[] calldata from, uint256[] calldata amounts) external;
Alternatively, you can deploy a proxy contract that wraps your existing token and exposes these batch functions.
When using a custom contract, ensure the batch functions include proper access control to prevent unauthorized minting or burning.

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Permissions & Security

To enable Snag to update balances on your token contract, you must grant the appropriate permissions to your relayer’s EOA (Externally Owned Account).

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Granting Permissions

Your contract should implement role-based access control (such as OpenZeppelin’s AccessControl). You’ll need to grant your relayer address the role that permits minting and burning tokens. For SnagHybridERC20, this is the BALLANCE_UPDATER_ROLE. For custom contracts, grant whichever role allows calling your batch mint and burn functions.
Relayers are standard EOAs (not contract wallets), making execution straightforward and fully compatible with your existing role system.

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Key Management

Snag uses enterprise-grade security for private key management:
  • GCP Cloud KMS: All private keys are stored in Google Cloud’s Key Management Service
  • Hardware Security Modules (HSM): Signing operations occur inside secure hardware enclaves
  • No key exposure: Private keys never leave the cloud infrastructure

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V2 Relayers Only

Onchain tokens are exclusively supported on V2 relayers, which provide enhanced security with GCP Cloud KMS integration and improved transaction management.
V1 relayers (AWS-based) do not support onchain token synchronization. Please migrate to V2 relayers to use this feature.

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Gas & Funding

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Relayer Funding

You are responsible for keeping your relayer funded with native tokens (ETH, MATIC, etc.) to pay for gas fees.
1

Copy relayer address

Navigate to your relayer in Snag Admin and copy the EOA address.
2

Send funds

Transfer native tokens from any wallet to the relayer address. Ensure you’re on the correct network.
3

Monitor balance

Regularly check your relayer balance to ensure uninterrupted operation.

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Fee Structure

Snag takes zero fees per transaction. You only pay network gas fees to the blockchain.

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Performance & Scalability

Snag’s infrastructure is built to handle high-volume operations, supporting hundreds of thousands of accounts per sync cycle. The main constraint is the blockchain itself—specifically, one transaction per EOA per block. Batching operations significantly improves both gas efficiency and throughput. Without batching, on-chain balances could never sync efficiently—each transaction would need to wait for the previous one to confirm.
For extremely high-volume use cases, we’re developing a relayer pool system that distributes load across multiple EOAs using round-robin, effectively removing throughput limits.

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Transaction Reliability

All transaction management—including nonce sequencing, gas estimation, and error handling—is handled automatically by the relayer service. If issues arise (such as insufficient funds or permission errors), you’ll be notified to take corrective action.

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Migration & Control

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Taking Full Control

If you want to manage token minting yourself in the future:
1

Deploy your own relayer

Set up your own signing infrastructure and relayer service.
2

Update permissions

Revoke the balance updater role from Snag’s relayer and grant it to your relayer.
3

Implement sync logic

You can continue using Snag Admin to trigger syncs, or build your own synchronization solution.
The contract is deployed from your relayer and all configuration is handled for you. If you prefer to deploy it yourself, contact our team for guidance.

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Audits

  • Smart contracts: Halborn is currently auditing our airdrop protocol; SnagHybridERC20 audit is expected to follow
  • Infrastructure audit: Completed 4-week white box security audit by Anvil Secure’s lead security researcher
  • Regular audits: Both smart contracts and application infrastructure undergo periodic security reviews

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Frequently Asked Questions

Any EVM-compatible chain where you have a V2 relayer. Popular chains include Ethereum, Arbitrum, Polygon, Base, Optimism, and more. Solana support is coming soon (keys are managed in GCP but hardware signing is not yet available).
Yes! As long as your contract exposes batchMint and batchBurn functions with proper access control, you can use it with Snag’s onchain token system. You can also deploy a proxy contract to add these functions to existing tokens.
Transactions will fail to execute until you refund the relayer. Snag will alert you when balances are low.
This depends on your use case and budget. More frequent syncs provide near real-time updates but cost more in gas fees. Less frequent syncs (hourly or daily) are more cost-effective. You can adjust this anytime in Snag Admin.
V2 relayers use GCP Cloud KMS with hardware signing and support onchain token synchronization. V1 relayers use AWS KMS and do not support onchain tokens. All new projects should use V2 relayers.
Absolutely! All transactions are public on-chain. You can view them on explorers like Etherscan, Arbiscan, or Polygonscan by searching for your relayer’s address.
Our relayers support EIP-7702 but we haven’t integrated it for hybrid ERC20 yet, as this standard is still propagating and many partner blockchains don’t support it. We’re monitoring adoption and will integrate when appropriate.

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Next Steps

Create a Relayer

Set up a V2 relayer to get started with onchain tokens.

Stratus Overview

Learn more about Snag’s cloud-native blockchain infrastructure.

Loyalty Currencies

Create a loyalty currency to sync on-chain.

Functions

Use Functions to build custom logic for your onchain tokens.
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