How to never pay L1 gas fees to bridge your tokens

Hi everyone! With the new Polygon <-> XLM bridge from News Crypto, new possibilities have emerged that enable US users to avoid L1 gas fees for bridging various tokens.

I'll share my use case to illustrate the above. After sharing my use case, I will explain how these steps technically enable experienced users to avoid L1 gas fees to bridge to L2s (which are more secure than Polygon). First, all my collateral is on AAVE on Polygon to avoid high L1 fees. I also have a Coinbase card with which I spend borrowed USDC to avoid selling my ETH or taking my stables out of AAVE. Previously, I used the Hop Protocol to go directly from AAVE on Polygon to my coinbase card — but I would still incur an L1 bridge fee. Now, that is no longer needed and Hop is obsolete in this respect. For a total fee of around $0.30 [1 XLM], I take the following steps to send my borrowed USDC from AAVE on Polygon directly to my L1 Coinbase card wallet:

1. Borrow USDC or DAI against my collateral in AAVE on Polygon
2. Swap the USDC for wrapped XLM (wXLM) on SushiSwap on Polygon. Much of the liquidity is strictly on Sushiswap as of today. wXLM contract address: https://polygonscan.com/token/0xf854225caaef5a722884a68a23215dfa5386751e
3. Bridge wXLM to the actual XLM blockchain via NewsCrypto Bridge. Note: be sure to enter your XLM wallet address here as the destination, and you must send more than 1 XLM as the bridge deducts 1 XLM as a fee. Do not use coinbase card address here, it does not work with the bridge.
4. Now, send your XLM from your personal XLM wallet to your coinbase pro XLM wallet. Don't forget to include the memo! The fee here is negligible, it's in the cents.
5. Sell XLM on coinbase pro for USD.
6. Convert USD to USDC.
7. Withdraw USDC from Coinbase pro to Coinbase.com so your coinbase card can use the USDC. And you're done! Total "bridge" fees paid are less than $1 here.

There is no taxable event in the above steps. The capital being moved is actually borrowed, so it's a liability. Liabilities are untaxed, so this is an efficient way for us poors to borrow against our assets and spend the borrowed money as needed for little to no fees. Simultaneously, we are earning fat AAVE APYs.

The above steps can be tweaked once AAVE goes on Arbitrum, or zk rollups in the future. This is because bridges already exist between Polygon and Arbitrum, and Optimism. So you can avoid high bridge gas fees to L2s right now by tweaking the above steps with this method! For users seeking to alter the above steps to bridge to L2s from an exchange, note that most of the wXLM liquidity on Polygon is on SushiSwap. That way you avoid having to use a centralized service/chain like BlockFi or Celsius, thereby making your funds more secure. I hope this helps.

Disclaimer: I'm not affiliated with Polygon, or News Crypto. Just trying to help. Also will note that the News Crypto bridge was funded by a Polygon grant, so they have a working relationship. And yes, I plan to move from Polygon to zk rollups in the future once AAVE deploys there 🙂