Delegate Mission Request Summary:
Enable xERC20 tokens support on the Superchain by constructing a Custom Bridge for optimal xERC20 token routing.
S5 Intent Please list the Intent your Request aligns with here: 2 Grow the Superchain (Interoperability research)
Proposing Delegate: SEED Latam delegation team
Proposal Tier: Ember
Baseline grant amount: 15k OP
Should this Foundation Mission be fulfilled by one or multiple applicants: One
Submit by: To be set by Grants Council
Selection by: To be set by Grants Council
Start date: ASAP
Completion date: Estimated 6 weeks from starting date
How will this Delegate Mission Request help accomplish the above Intent?
The adoption of xERC20, being completely bridge agnostic, helps the whole web3 ecosystem by making crosschain liquidity more capital efficient and secure. It helps projects to avoid being locked into 3rd party bridges which, if compromised, can jeopardize even secure layers like Optimism.
The work fits within the Superchain vision, as it helps to unify liquidity across OP Mainnet and potentially other OP chains, using both native and 3rd party bridges.
The mission request will target OP Mainnet, OP Chains, which we refer to as Superchain.
What is required to execute this Delegate Mission Request?
- Build the xERC20 token bridge on top of the Superchain stack existing base messaging functionality with the specifications below.
- Provide instructions and specifications to enable shared token mapping across the OP Mainnet (note that there already a Superchain token list)
How should the Token House measure progress towards this Mission?
- Submit specifications
- Custom token bridge - testnet deployment
- Token registry - testnet deployment
- Complete Documentation
- Custom token bridge - OP Mainnet deployment
How should badgeholders measure impact upon completion of this Mission?
- Number of xERC20 tokens bridged to OP Mainnet (and aligned OP Chains)
- Number of third party bridges integrating xERC20 into OP Mainnet (and aligned OP Chains)
- Volume of xERC20 tokens into OP Mainnet (and aligned OP Chains)
- Volume (real usage, economic activity) of xERC20 tokens inside of OP Mainnet (and aligned OP Chains)
Have you engaged a Grant-as-a-service provider for this Mission Request?
Has anyone other than the Proposing Delegate contributed to this Mission Request?
Yes, the Connext team has contributed to drafting this Mission Request.
A solution criteria
The Optimism canonical bridge implements two components:
- The underlying messaging system between domains
- The application built on top of the above acts as the canonical token bridge. Typically, this application custodies tokens on L1, and then mints a representation of that token on L2.
Adding a custom bridge on the messaging layer is already supported. The xERC20 token bridge needs to sit at the same level as the canonical token bridge, to avoid edge cases around token minting/locking.
The xERC20 token bridge needs to be able to:
- Identify if it has not reached its rate limits, and if so
- Wrap the token into an xERC20 if needed
- Burn the xERC20 version and mint its representation on Optimism
Additionally, a custom UI should also appropriately route xerc20 transfers. This helps to avoid the following cases:
- An xERC20’s underlying ERC20 token is locked-and-minted across chains leading to a new bridged-ERC20 representation created on the domain that is infungible with the token-issuer-defined canonical token.
- An xERC20 is incorrectly routed to the canonical lock-and-mint bridge instead of the xERC20 bridge contracts on the home domain, which once again creates an incorrect and infungible representation on the remote domain.
A component for a possible bridge UI that can be opted in by any interface of the Superchain should provide access to a mapping of the self-identified xERC20 tokens and establish appropriate route.