--- eip: 7535 title: Native Asset ERC-4626 Tokenized Vault description: ERC-4626 Tokenized Vaults with Ether (Native Asset) as the underlying asset author: Joey Santoro (@joeysantoro) discussions-to: https://ethereum-magicians.org/t/eip-7535-eth-native-asset-tokenized-vault/16068 status: Final type: Standards Track category: ERC created: 2023-10-12 requires: 20, 4626, 7528 --- ## Abstract This standard is an extension of the [ERC-4626](./eip-4626.md) spec with an identical interface and behavioral overrides for handling Ether or any native asset as the underlying. ## Motivation A standard for tokenized ETH Vaults has the same benefits as [ERC-4626](./eip-4626.md), particularly in the case of Liquid Staking Tokens, (i.e. fungible [ERC-20](./eip-20.md) wrappers around ETH staking). Maintaining the same exact interface as ERC-4626 further amplifies the benefits as the standard will be maximally compatible with existing ERC-4626 tooling and protocols. ## Specification All [ERC-7535](./eip-7535.md) tokenized Vaults MUST implement ERC-4626 (and by extension ERC-20) with behavioral overrides for the methods `asset`, `deposit`, and `mint` specified below. ### ERC-4626 Breaking Changes * Any `assets` quantity refers to wei of Ether rather than ERC-20 balances. * Any ERC-20 `transfer` calls are replaced by Ether transfer (`send` or `call`) * Any ERC-20 `transferFrom` approval flows for `asset` are not implemented * `deposit` and `mint` have state mutability `payable` * `deposit` uses `msg.value` as the primary input and MAY ignore `assets` ### Methods #### asset MUST return `0xEeeeeEeeeEeEeeEeEeEeeEEEeeeeEeeeeeeeEEeE` per [ERC-7528](./eip-7528.md). ```yaml - name: asset type: function stateMutability: view inputs: [] outputs: - name: assetTokenAddress type: address ``` #### deposit Mints `shares` Vault shares to `receiver` by depositing exactly `msg.value` of Ether. MUST have state mutability of `payable`. MUST use `msg.value` as the primary input parameter for calculating the `shares` output. I.e. MAY ignore `assets` parameter as an input. MUST emit the `Deposit` event. MUST revert if all of `msg.value` cannot be deposited (due to deposit limit being reached, slippage, etc). ```yaml - name: deposit type: function stateMutability: payable inputs: - name: assets type: uint256 - name: receiver type: address outputs: - name: shares type: uint256 ``` #### mint Mints exactly `shares` Vault shares to `receiver` by depositing `assets` of ETH. MUST have state mutability of `payable`. MUST emit the `Deposit` event. MUST revert if all of `shares` cannot be minted (due to deposit limit being reached, slippage, the user not sending a large enough `msg.value` of Ether to the Vault contract, etc). ```yaml - name: mint type: function stateMutability: payable inputs: - name: shares type: uint256 - name: receiver type: address outputs: - name: assets type: uint256 ``` ### Events The event usage MUST be identical to ERC-4626. ### Wrapped ETH Any ERC-4626 Vault that uses a Wrapped ETH ERC-20 as the `asset` MUST NOT implement ERC-7535. ERC-7535 only applies to native ETH. ## Rationale This standard was designed to maximize compatibility with ERC-4626 while minimizing additional opinionated details on the interface. Examples of this decision rationale are described below: * maintaining the redundant `assets` input to the `deposit` function while making its usage optional * not enforcing a relationship between `msg.value` and `assets` in a `mint` call * not enforcing any behaviors or lack thereof for `fallback`/`__default__` methods, payability on additional vault functions, or handling ETH forcibly sent to the contract All breaking implementation level changes with ERC-4626 are purely to accomodate for the usage of Ether or any native asset instead of an ERC-20 token. ### Allowing assets Parameter to be Ignored in a Deposit `msg.value` must always be passed anyway to fund a `deposit`, therefore it may as well be treated as the primary input number. Allowing `assets` to be used either forces a strict equality and extra unnecessary gas overhead for redundancy, or allows different values which could cause footguns and undefined behavior. The last option which could work is to require that `assets` MUST be 0, but this still requires gas to enforce at the implementation level and can more easily be left unspecified, as the input is functionally ignorable in the spec as written. ### Allowing msg.value to Not Equal assets Output in a Mint There may be many cases where a user deposits slightly too much Ether in a `mint` call. In these cases, enforcing `msg.value` to equal `assets` would cause unnecessary reversions. It is up to the vault implementer to decide whether to refund or absorb any excess Ether, and up to depositors to deposit as close to the exact amount as possible. ## Backwards Compatibility ERC-7535 is fully backward compatible with ERC-4626 at the function interface level. Certain implementation behaviors are different due to the fact that ETH is not ERC-20 compliant, such as the priority of `msg.value` over `assets`. It has no known compatibility issues with other standards. ## Security Considerations In addition to all security considerations of [ERC-4626](./eip-4626.md), there are security implications of having ETH as the Vault asset. ### `call` vs `send` Contracts should take care when using `call` to transfer ETH, as this allows additional reentrancy vulnerabilities and arbitrary code execution beyond what is possible with trusted ERC-20 tokens. It is safer to simply `send` ETH with a small gas stipend. Implementers should take extra precautions when deciding how to transfer ETH. ### Forceful ETH transfers ETH can be forced into any Vault through the `SELFDESTRUCT` opcode. Implementers should validate that this does not disrupt Vault accounting in any way. Similarly, any additional `payable` methods should be checked to ensure they do not disrupt Vault accounting. ### Wrapped ETH Smart contract systems which implement ERC-4626 should consider only supporting ERC-20 underlying assets, and default to using a Wrapped ETH ERC-20 instead of implementing ERC-7535 for handling ETH. The subtle differences between ERC-4626 and ERC-7535 can introduce code fragmentation and security concerns. Cleaner use cases for ERC-7535 are ETH exclusive, such as Wrapped ETH and Liquid Staking Tokens. ## Copyright Copyright and related rights waived via [CC0](../LICENSE.md).