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40 lines
2.7 KiB
Markdown
40 lines
2.7 KiB
Markdown
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# Concepts
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## ERC20 token <> sdk.Coin Conversion
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`x/evmutil` facilitates moving assets between Kava's EVM and Cosmos co-chains. This must be handled differently depending on which co-chain to which the asset it native. The messages controlling these flows involve two accounts:
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1. The _initiator_ who sends coins from their co-chain
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2. The _receiver_ who receives coins on the other co-chain
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When converting assets from the EVM to the Cosmos co-chain, the initiator is an 0x EVM address and the receiver is a `kava1` Bech32 address.
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When converting assets from the Cosmos co-chain to the EVM, the initiator is a `kava1` Bech32 address and the receiver is an 0x EVM address.
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### Cosmos-Native Assets
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`sdk.Coin`s native to the Cosmos co-chain can be converted to an ERC-20 representing the coin in the EVM. This works by transferring the coin from the initiator to `x/evmutil`'s module account and then minting an ERC-20 token to the receiver. Converting back, the initiator's ERC-20 representation of the coin is burned and the original Cosmos-native asset is transferred to the receiver.
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Cosmos-native asset conversion is done through the use of the `MsgConvertCosmosCoinToERC20` & `MsgConvertCosmosCoinFromERC20` messages (see **[Messages](03_messages.md)**).
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Only Cosmos co-chain denominations that are in the `AllowedCosmosDenoms` param (see **[Params](05_params.md)**) can be converted via these messages.
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`AllowedCosmosDenoms` can be altered through governance.
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The ERC20 contracts are deployed and managed by x/evmutil. The contract is deployed on first convert of the coin. Once deployed, the addresses of the contracts can be queried via the `DeployedCosmosCoinContracts` query (`deployed_cosmos_coin_contracts` endpoint).
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If a denom is removed from the `AllowedCosmosDenoms` param, existing ERC20 tokens can be converted back to the underlying sdk.Coin via `MsgConvertCosmosCoinFromERC20`, but no conversions from sdk.Coin -> ERC via `MsgConvertCosmosCoinToERC20` are allowed.
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### EVM-Native Assets
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ERC-20 tokens native to the EVM can be converted into an `sdk.Coin` in the Cosmos ecosystem. This works by transferring the tokens to `x/evmutil`'s module account and then minting an `sdk.Coin` to the receiver. Converting back is the inverse: the `sdk.Coin` of the initiator is burned and the original ERC-20 tokens that were locked into the module account are transferred back to the receiver.
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EVM-native asset conversion is done through the use of the `MsgConvertERC20ToCoin` & `MsgConvertCoinToERC20` messages (see **[Messages](03_messages.md)**).
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Only ERC20 contract address that are in the `EnabledConversionPairs` param (see **[Params](05_params.md)**) can be converted via these messages.
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`EnabledConversionPairs` can be altered through governance.
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