📏wethDYDX and wethDYDX Smart Contract
Overview of the wethDYDX Smart Contract
Disclaimer
The wethDYDX Smart Contract
enables a permissionless and autonomous one-way bridge for the ethDYDX
token to be migrated from Ethereum to the dYdX Chain. The dYdX Foundation will not provide a user interface or front-end related to access the wethDYDX Smart Contract
.
Neither the dYdX Foundation or any other party will be able to exercise any kind of power over the wethDYDX Smart Contract
. Consequently, the dYdX Foundation does not make any representations, warranties, or covenants as to the technical properties, performance and will not be responsible for the use made by the people of the wethDYDX Smart Contract
, including, without limitation, with regard to (i) potential deployments of the wethDYDX Smart Contract
, (ii) potential adaptations, forks or modified versions of the wethDYDX Smart Contract
, and its deployment, or (iii) users’ interactions with the wethDYDX Smart Contract
.
Note, users should refrain from interacting with the wethDYDX Smart Contract
without proper knowledge of how to derive private keys on the dYdX Chain.
Resources
Overview
When interacted with, the one-way bridge wethDYDX Smart Contract
would carry out the following functions in a fully permissionless and automated manner:
Step 1: Receive and permanently lock the ethDYDX
tokens sent by the user to the wethDYDX Smart Contract,
Step 2: Send wethDYDX
to the user on a 1-1 proportion basis on Ethereum, and
Step 3: dYdX Chain validators can also read and ingest the information in the wethDYDX Smart Contract
such that corresponding DYDX can be distributed to users by validators on the dYdX Chain once there is confirmation that Step 1 above is complete and the ethDYDX is permanently locked in the wethDYDX Smart Contract
.
For users who migrate(d) their ethDYDX
tokens to the dYdX Chain using the wethDYDX Smart Contract
referred to in this documentation, the method that users would be credited with DYDX tokens on the dYdX Chain is expected to depend on when they interact with the wethDYDX Smart Contract
, as follows:
Step 3(a): If a user interacted with the
wethDYDX Smart Contract
before a certain cut-off date prior to the genesis of the dYdX Chain (“Genesis”), the amount ofethDYDX
tokens sent by the user to thewethDYDX Smart Contract
was registered as event information in thewethDYDX Smart Contract
. At this point, the user’s dYdX Chain wallet could not be allocated with DYDX tokens because the dYdX Chain did not exist yet.
At Genesis, all accounts (including validator accounts) that interacted with the wethDYDX Smart Contract
prior to the relevant cut-off time before Genesis were allocated with DYDX tokens on the dYdX Chain by the validators of the network.
Step 3(b): If a user interacts with the
wethDYDX Smart Contract
(after Genesis), then each dYdX Chain validator participating in the consensus process would read the event information of thewethDYDX Smart Contract
and allocate DYDX tokens on the dYdX Chain to a given user’s dYdX Chain address based on the corresponding amount (1-1) ofethDYDX
tokens that the user sent to thewethDYDX Smart Contract
.
Contract Design
Wrapped Ethereum DYDX (wethDYDX)
Wrapped Ethereum DYDX (wethDYDX)
The wethDYDX
token contract is a new ERC-20 contract that is similar to theDYDX
token contract with the following specifications:
A new
bridge()
function that takesethDYDX
tokens from the caller and mints them an equivalent amount ofwethDYDX
tokensThis function will emit an event log indicating it has occurred
Note, there is no way to reverse the bridge function
No transfer or minting restrictions
Zero
INITIAL_SUPPLY
A new
NAME
: Wrapped Ethereum DYDXSYMBOL: wethDYDX
Transferability and Utility
The wethDYDX
token is freely transferable like a normal ERC-20 contract.
On September 24, 2023, the dYdX community almost unanimously supported upgrading the GovernanceStrategy Smart Contract
to v2. This upgrade ratified the implementation of wethDYDX into dYdX v3’s governance system so that wethDYDX has the same voting and proposal power as ethDYDX.
Similar to DYDX
, if the market value of wethDYDX
drops, it may introduce a governance security issue because the wethDYDX
tokens retain the same voting rights as the ethDYDX
token.
Event Emission
The wethDYDX Smart Contract
emits an event log in order for the dYdX Chain to understand when a call to bridge()
has occurred.
Below are some helpful links that describe Ethereum logs:
The following log would be emitted:
The description of each field in the log is as follows:
id
is an incrementing number guaranteed to be unique for each log with no gaps.id
allows anyone to refer to a unique event easily.id
allows de-duplication of event processing by the v4 chain without requiring additional storage for each unique event. If the chain processes eacheventId
in order, then it can store a single integer of the most recently processedeventId
.
amount
is the amount ofethDYDX
tokens that was transferred.from
is the Ethereum address theethDYDX
tokens were transferred from.accAddress
is the address to which the L1 token of the dYdX Chain should be minted. This field is an arbitrary value provided by the caller of the function.data
is additional arbitrary data that the caller provides. This field can be used to signal additional intent. For example, it can be used when migrating funds from a treasury to indicate that the funds should not go to a normal end-user account and instead should be bridged to a module account.
Locked Tokens Transfer Restrictions
Per the original blog post introducing ethDYDX
, 50% of the 1 billion supply of ethDYDX
was reserved for:
past investors of dYdX Trading Inc. (27.7%),
founders, employees, advisors, and consultants of dYdX Trading Inc. and dYdX Foundation (15.3%); and,
future employees and consultants of dYdX Trading Inc. or dYdX Foundation (7.0%).
Certain ethDYDX
tokens held by investors and team members are subject to transfer restrictions. Those ethDYDX
tokens are referred to as locked tokens (the "Locked Tokens"). The transfer restriction shall expire pursuant to a publicly available schedule and can be viewed here.
Locked Tokens will be released from the transfer restrictions on the same schedule as follows:
30% on December 1, 2023 (the “Initial Unlock Date”);
40% in equal monthly installments on the first day of each month from January 1, 2024, to June 1, 2024;
20% in equal monthly installments on the first day of each month from July 1, 2024, to June 1, 2025; and
10% in equal monthly installments on the first day of each month from July 1, 2025, to June 1, 2026.
All employees and consultants with ethDYDX tokens are also subject to various vesting schedules that could result in them losing their right to receive Locked Tokens.
Bridging & Staking Locked Tokens
Locked Tokens can still be bridged from Ethereum to the dYdX Chain via the wethDYDX Smart Contract
, and like all other ethDYDX
token-holders, the locked ethDYDX token-holders will be entitled to receive:
wethDYDX
, on a 1-1 proportional basis, on Ethereum, andDYDX
tokens, on a 1-1 proportional basis, on the dYdX Chain.
Any wethDYDX
and/or dYdX-Chain DYDX
tokens received in exchange for locked ethDYDX
tokens shall continue to be subject to the same transfer restrictions and release schedule. As with the current locked ethDYDX
tokens, locked wethDYDX tokens and locked dYdX-Chain DYDX
tokens may also be bridged to another blockchain, used for voting or delegating purposes and/or staked to a validator, if applicable.
Any liquid staking tokens (LSTs) received in exchange for locked ethDYDX
, wethDYDX
and/or DYDX
tokens, including, without limitation, stDYDX
or stkDYDX
, shall also continue to be subject to the same transfer restrictions and release schedule. As with locked ethDYDX
tokens, locked wethDYDX
tokens and locked dYdX-Chain DYDX
tokens, locked LSTs received when liquid-staking ethDYDX
, wethDYDX
and/or DYDX
tokens may also be bridged to another blockchain, used for voting or delegating purposes and/or staked to a validator, if applicable.
Helpful Links:
FAQ
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