Multiple Native Tokens

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EIPS/eip-draft_mna.md

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+---
+title: Multiple Native Tokens
+description: Introduces fungible tokens with native-like properties directly within the EVM
+author: Paul Razvan Berg (@PaulRBerg), Iaroslav Mazur (@IaroslavMazur)
+discussions-to: https://ethereum-magicians.org[]
+status: Draft
+type: Standards Track
+category: Core
+created: 2024-11-01
+---
+
+## Abstract
+
+This proposal introduces Multiple Native Tokens (MNTs, or just NTs) as a foundational extension to the EVM, enabling
+fungible tokens to function with native-like properties directly within the EVM. Unlike current ERC-20 implementations,
+MNTs are integrated into the global VM state, allowing for direct transfers through newly defined opcodes and
+eliminating the traditional two-step "approve" and "transfer" pattern. Ether (ETH) is designated as one of the MNTs
+while retaining its unique role as the exclusive token for gas fee payments. The EIP introduces the new opcodes `MINT`,
+`BURN`, `BALANCEOF`, and `CALLVALUES` to manage NT supply and query account balances. Additional opcodes such as
+`NTCALL`, `NTCALLCODE`, `NTCREATE`, and `NTCREATE2` facilitate NT transfers and NT-infused contract creation. Existing
+opcodes and transactions are adapted to refer to the default NT, which is `ETH`. A new transaction type is introduced in
+which the `value` field is replaced with a collection of (`token_id`, `token_amount`) pairs, enabling multi-token
+transactions. By embedding tokens natively in the EVM, this proposal aims to improve the user experience of token
+management and facilitate advanced innovating use-cases, particularly on L2s.
+
+## Motivation
+
+Implementing Multiple Native Tokens in the EVM offers several compelling advantages over traditional ERC-20 smart
+contracts, fostering innovation and improving user experience.
+
+### Native Support for Financial Instruments
+
+Storing token balances in the VM state unlocks the potential for sophisticated financial instruments to be implemented
+at the protocol level. This native integration facilitates features such as recurring payments and on-chain incentives
+without the need for complex smart contract interactions. For instance, platforms could natively provide yield to token
+holders or execute airdrops natively, similar to how rollups like Blast offer yield for ETH holders. Extending this
+capability to any token enhances utility and encourages users to engage more deeply with the network.
+
+### Elimination of Two-Step "Approve" and "Transfer"
+
+By embedding token balances into the VM state, the cumbersome process of approving tokens before transferring them is
+eliminated. Token transfers can be seamlessly included into smart contract calls, simplifying transaction flows and
+reducing the number of steps users must take. This streamlined process not only enhances the user experience but also
+reduces gas costs associated with multiple contract calls, making interactions more efficient and cost-effective.
+
+### Encouraging Experimentation on Layer 2 Solutions
+
+The proposed model aims to encourage innovation on Ethereum L2s by providing a flexible framework for token management.
+EVM rollups can experiment with this design to develop new paradigms in decentralized finance (DeFi), gaming, and
+beyond. By enabling tokens to have native properties and interactions, developers are empowered to explore features that
+could lead to more robust and versatile applications. This experimentation is vital for the evolution of the Ethereum
+ecosystem, as it fosters advancements that can benefit the broader community.
+
+## Prior Art
+
+This EIP has been inspired by FuelVM's
+[Native Assets](https://docs.fuel.network/docs/sway/blockchain-development/native_assets/) design, as well as its
+[SRC-20: Native Asset](https://docs.fuel.network/docs/sway-standards/src-20-native-asset/) standard.
+
+The key distinction between Fuel's Native Assets and this EIP is that, in our proposal, each contract is limited to a
+single native token (NT). A contract can mint only one NT, and the contract's address itself serves as the NT's ID.
+
+## Specification
+
+The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT", "SHOULD", "SHOULD NOT", "RECOMMENDED", "NOT
+RECOMMENDED", "MAY", and "OPTIONAL" in this document are to be interpreted as described in RFC 2119 and RFC 8174.
+
+For increased security and consistency, the token contracts representing the NTs SHOULD NOT use an upgradeability
+pattern.
+
+Note: Since the EVM stack can support only up to 1024 elements, there is a natural limit to the number of tokens that
+can be transferred during the execution of a single opcode. Given that a token pair takes 2 stack slots, while the
+number of transferred tokens occupies another one, the maximum number of tokens that can be transferred can be
+calculated as follows:
+
+$$
+(1024 - 1 - N) / 2
+$$
+
+Where $N$ is the number of non-NT-related arguments.
+
+For example, a single `NTCALL` opcode can transfer a total of (1024 - 1 - 6) / 2 = 508 tokens.
+
+### State Changes
+
+A global `token_id` -> `token_supply` mapping is introduced to keep track of the existing NTs and their circulating
+supply. This mapping is also used to validate the supported NTs. An NT exists if and only if its ID can be found in the
+mapping. The supply of an NT increases as a result of executing the `MINT` opcode, and decreases as a result of
+executing the `BURN` opcode. The `token_id` of an NT is the Ethereum address of its associated smart contract.
+
+`ETH` becomes the 'Base Token', with its ID and supply initialized to zero. `ETH` is the only NT whose supply is not
+tracked explicitly, i.e., its supply is determined just like it currently is.
+
+### New Opcodes
+
+#### `MINT` - `0xb0`
+
+- **Gas**: Constant
+- **Stack inputs**:
+  - `recipient`: the address to which the minted tokens are credited
+  - `token_amount`
+- **Stack outputs**:
+  - `success`: a Boolean indicating success
+
+#### `BURN` - `0xb1`
+
+- **Gas**: Constant
+- **Stack inputs**:
+  - `burner`: the address from which the tokens are burned
+  - `token_amount`
+- **Stack outputs**:
+  - `success`: a Boolean indicating success
+
+Note: the burner MUST have an NT balance that is at least equal to `token_amount`.
+
+#### `BALANCEOF` - `0xb2`
+
+- **Gas**: Constant
+- **Stack inputs**:
+  - `token_id`: the ID of the NT to query the balance of
+  - `address`: the address to query the balance of
+- **Stack outputs**:
+  - `balance`: the NT balance of the given address
+
+#### `CALLVALUES` - `0xb3`
+
+- **Gas**: Dynamic, proportional to the number of NTs transferred by the executing call
+- **Stack inputs**: None
+- **Stack outputs**:
+  - `transferred_tokens_length`: the number of transferred tokens
+  - The list of `transferred_tokens_length` (`token_id`, `token_amount`) pairs
+
+#### `NTCALL` - `0xb4`
+
+- **Gas**: Dynamic, proportional to the number of transferred NTs
+- **Stack inputs**:
+
+  - `gas`: amount of gas to send to the sub context to execute. The gas that is not used by the sub context is returned
+    to this one
+  - `address`: the account which context to execute
+  - `transferred_tokens_length`: the number of transferred tokens
+  - The list of `transferred_tokens_length` (`token_id`, `token_amount`) pairs
+  - `argsOffset`: byte offset in the memory in bytes, the calldata of the sub context
+  - `argsSize`: byte size to copy (size of the calldata)
+  - `retOffset`: byte offset in the memory in bytes, where to store the return data of the sub context
+  - `retSize`: byte size to copy (size of the return data)
+
+- **Stack outputs**:
+  - `success`: return 0 if the sub context reverted, 1 otherwise
+
+#### `NTCALLCODE` - `0xb5`
+
+- **Gas**: Dynamic, proportional to the number of transferred NTs
+- **Stack inputs**:
+
+  - `gas`: amount of gas to send to the sub context to execute. The gas that is not used by the sub context is returned
+    to this one
+  - `address`: the account which code to execute
+  - `transferred_tokens_length`: the number of transferred tokens
+  - The list of `transferred_tokens_length` (`token_id`, `token_amount`) pairs
+  - `argsOffset`: byte offset in the memory in bytes, the calldata of the sub context
+  - `argsSize`: byte size to copy (size of the calldata)
+  - `retOffset`: byte offset in the memory in bytes, where to store the return data of the sub context
+  - `retSize`: byte size to copy (size of the return data)
+
+- **Stack outputs**:
+  - `success`: return 0 if the sub context reverted, 1 otherwise
+
+#### `NTCREATE` - `0xb6`
+
+- **Gas**: Dynamic, proportional to the number of transferred NTs
+- **Stack inputs**:
+
+  - `transferred_tokens_length`: the number of transferred tokens
+  - The list of `transferred_tokens_length` (`token_id`, `token_amount`) pairs
+  - `offset`: byte offset in the memory in bytes, the initialization code for the new account
+  - `size`: byte size to copy (size of the initialization code)
+
+- **Stack outputs**:
+  - `address`: the address of the deployed contract, 0 if the deployment failed.
+
+#### `NTCREATE2` - `0xb7`
+
+- **Gas**: Dynamic, proportional to the number of transferred NTs
+- **Stack inputs**:
+
+  - `transferred_tokens_length`: the number of transferred tokens
+  - The list of `transferred_tokens_length` (`token_id`, `token_amount`) pairs
+  - `offset`: byte offset in the memory in bytes, the initialization code of the new account
+  - `size`: byte size to copy (size of the initialization code)
+  - `salt`: 32-byte value used to create the new account at a deterministic address
+
+- **Stack outputs**:
+  - `address`: the address of the deployed contract, 0 if the deployment failed
+
+### Existing Opcodes Adaptations
+
+#### Balance Query
+
+The following opcodes are adapted to query the balance of the default NT, which is `ETH`:
+
+- `BALANCE`
+- `SELFBALANCE`
+- `CALLVALUE`
+
+#### Contract Creation
+
+The `value` field in the following opcodes will refer to the default NT, which is `ETH`:
+
+- `CREATE`
+- `CREATE2`
+
+#### Calling Contracts
+
+The `value` field in the following opcodes will refer to the default NT, which is `ETH`:
+
+- `CALL`
+- `CALLCODE`
+
+### Transaction structure
+
+#### New Transaction Types
+
+A new EIP-1559 transaction type is introduced to support the transfer of NTs.
+
+The `value` field in the transaction structure is replaced by the number of tokens transferred
+(`transferred_tokens_length`), followed by the (`token_id`, `token_amount`) pairs.
+
+#### EVM Transactions
+
+All existing EVM transactions are still valid.
+
+- A zero `value` is equivalent to an empty `transferred_tokens` list.
+- A non-zero `value` is equivalent to a list containing a single pair with `ETH`'s `token_id` (which is zero) and the
+  `value` as `token_amount`.
+
+## Rationale
+
+An alternative to the proposed opcode-based approach was to use precompiles, which would have worked as follows:
+
+- No new opcodes.
+- Existing EVM opcodes would remain unchanged.
+- As a result, no modifications to smart contract languages would be required.
+
+However, the precompile-based approach also has disadvantages:
+
+- It would require major architectural changes to the EVM implementation, as precompiles are not designed to be
+  stateful.
+- Users would be required to handle low-level data manipulations to encode inputs to precompile functions and decode
+  their outputs. This would lead to a subpar user experience.
+
+Considering this, the opcode-based approach was chosen for its simplicity and efficiency in handling NTs at the EVM
+level.
+
+## Backwards Compatibility
+
+This EIP does not introduce any breaking changes to the existing Ethereum protocol. However, it adds substantial new
+functionality that requires consideration across various layers of the ecosystem.
+
+Front-end Ethereum libraries, such as web3.js and wagmi, will need to adapt to the new transaction structures introduced
+by MNTs. These libraries must update their interfaces and transaction handling mechanisms to accommodate the inclusion
+of token transfers within smart contract calls and the absence of traditional "approve" and "transfer" functions.
+
+Smart contract languages like Solidity will need to incorporate support for the newly introduced opcodes associated with
+MNTs. This includes adapting compilers and development environments to recognize and compile contracts that interact
+with tokens stored in the VM state.
+
+Additionally, Ethereum wallets, block explorers, and development tools will require updates to fully support MNTs.
+Wallets must be capable of managing multiple native token balances, signing new types of transactions, and displaying
+token information accurately. Explorers need to parse and present the new transaction formats and token states, while
+development tools should facilitate debugging and deployment in this enhanced environment.
+
+To ensure a smooth transition, the authors recommend a gradual deployment process. This phased approach allows
+developers, users, and infrastructure providers to adapt incrementally. By introducing MNTs in stages, the ecosystem can
+adjust to the new functionalities, verify compatibility, and address any issues that arise, ensuring that every
+component behaves correctly throughout the integration period.
+
+## Reference Implementation
+
+The authors have begun implementing this EIP in Sablier's [SabVM repository](https://github.com/sablier-labs/sabvm), a
+fork of [REVM](https://github.com/bluealloy/revm) that supports MNTs. Unlike the proposed EIP, SabVM uses precompiles
+instead of opcodes because that was easier to implement at the time.
+
+A particularly relevant resource in SabVM is this
+[draft Solidity spec](https://github.com/sablier-labs/sabvm/discussions/87), which details support for MNTs in Solidity.
+
+Additionally, the [SRFs repository](https://github.com/sablier-labs/SRFs) (Sablier Requests for Comments) hosts the
+SRF-20 standard: an application-level standard designed to replicate the ERC-20 standard specifically for MNTs.
+
+| Name   | Link                                                                     | Description                                                                       |
+| ------ | ------------------------------------------------------------------------ | --------------------------------------------------------------------------------- |
+| SabVM  | [github.com/sablier-labs/sabvm](https://github.com/sablier-labs/sabvm)   | Fork of REVM that implements MNTs with precompiles                                |
+| SRFs   | [github.com/sablier-labs/SRFs](https://github.com/sablier-labs/SRFs)     | Sablier Requests for Comments                                                     |
+| stdlib | [github.com/sablier-labs/stdlib](https://github.com/sablier-labs/stdlib) | Sablier Standard Library, providing precompiles, standards, and testing utilities |
+
+## Security Considerations
+
+This EIP introduces a few security risks related to malicious tokens and system integrity. Below are the key
+considerations and how they are mitigated.
+
+1. **Malicious or Misbehaving Native Tokens**: a token that becomes a Native Token (NT) may later behave maliciously,
+   causing disruptions in the network.
+
+Mitigation: Users are encouraged to prefer using immutable, non-upgradeable NTs.
+
+2. **Cross-Contract NT Transfers**: inter-contract NTs transfers could lead to lost tokens if contracts are not properly
+   equipped to handle multiple tokens.
+
+Mitigation: Contracts must validate token transfers correctly, with guidance for developers on standard patterns to
+ensure safe cross-contract interactions. Existing EVM contracts should be audited and updated to handle NTs.
+
+3. **Gas Bombs**: Users may become stuck if they hold an excessive number of NTs, causing the gas required for
+   processing their transactions to exceed the block gas limit.
+
+Mitigation: All introduced opcodes operate with constant-time complexity. The stack limit of 1024 elements effectively
+prevents the creation of gas bombs when calling contracts. Although an opcode for querying all NT balances of an account
+was initially considered, it was ultimately omitted to eliminate the risk of gas bomb exploits.
+
+## Copyright
+
+Copyright and related rights waived via [CC0](../LICENSE.md).