For example, Alice wants to transfer 5 TACO tokens to Bob from chain A to chain B. When she initiates the transfers, those 5 TACO tokens are locked in the token handler contract on chain A. An event is emitted stating, among other things, the recipient address and amount of tokens, which is picked up by the relayers. If the multisig threshold is reached, 5 wTACO (wrapped TACO) tokens are unlocked from the handler contract on chain B, and transferred to Bob. If Bob wanted to send 5 wTACO tokens to Charlie on chain A, he would then lock these tokens in the handler contract on chain B, initiating the series of events that leads to unlocking of 5 TACO tokens on chain A, which are transferred to Charley.
The main benefit of this token model is that it gives your team certain control on the maximum amount of tokens that can be wrapped in the target network, because wrapped tokens need to be preminted and transferred to the handler’s address. However, the main drawback is that token accountability becomes an issue, and the lack of wrapped tokens in the handler contract can prevent the bridge from operating properly. This method is not preferred by the Meter Passport team.