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Token Adapters

1. Summary

There are three main token adapter types: CollateralJoin, ETHJoin and CoinJoin:

  • CollateralJoin - allows standard ERC20 tokens to be deposited for use with the system.
  • ETHJoin - allows native Ether to be used with the system.
  • CoinJoin - allows users to withdraw their system coins from the protocol into a standard ERC20 token (and vice-versa).

2. Contract Variables & Functions

Variables

  • safeEngine - storage of the SAFEEngine’s address.
  • collateralType - id of the CollateralType for which a CollateralJoin is created for.
  • collateral - the address of the collateralType for transferring.
  • systemCoin - the address of the Coin token.
  • contractEnabled - an access flag for the adapter.
  • decimals - decimals for the collateral type.

Functions

  • join - join tokens into the system
  • exit - exit tokens from the system
  • disableContract - disable the adapter and only allow exits

Every token adapter contract has 4 public functions: a constructor, join, exit, and disableContract. The constructor is used on contract initialization and sets the core variables of that token adapter contract. Join and exit are both true to their names. Join provides a mechanism for users to add the given token type to the SafeEngine. It has slightly different logic in each variation, but generally resolves down to a transfer and a function call in the SafeEngine. Exit is very similar, but instead allows the the user to remove their desired token from the SafeEngine. disableContract allows the adapter to be drained (allows tokens to move out but not in).

3. Walkthrough

The CollateralJoin contract serves a very specified and singular purpose which is relatively abstracted away from the rest of the core smart contract system. When a user desires to enter the system and interact with the geb contracts, they must use one of the CollateralJoin contracts. After they have finished with the geb contracts, they must call exit to leave the system and take out their tokens. When the CollateralJoin gets disableContractd by an authed address, it can exit collateral from the SafeEngine but it can no longer join new collateral.

User balances for collateral tokens added to the system via disableContract are accounted for in the SafeEngine as tokenCollateral according to collateral type CollateralType until they are converted into locked collateral tokens (Safe.lockedCollateral) so the user can draw system coin.

The CoinJoin contract serves a similar purpose. It manages the exchange of Coin that is tracked in the SafeEngine and ERC-20 Coin that is tracked by Coin.sol. After a user draws Coin against their collateral, they will have a balance in CoinJoin.coinBalance. This Coin balance can be exit' ed from the SafeEngine using the CoinJoin contract which holds the balance of SafeEngine.coinBalance and mint's ERC-20 Coin. When a user wants to move their Coin back into the SafeEngine accounting system (to pay back debt, participate in auctions, pack coinBag's in the GlobalSettlement, or utilize the CoinSavingsAccount, etc), they must call CoinJoin.join. By calling CoinJoin.join this effectively burn's the ERC-20 Coin and transfers SafeEngine.coinBalance from the CoinJoin's balance to the User's account in the SafeEngine. Under normal operation of the system, the Coin.totalSupply should equal the SafEngine.coinBalance(CoinJoin) balance. When the CoinJoin contract gets disableContract'd by an auth'ed address, it can move Coin back into the SafeEngine but it can no longer exit Coin from the SafeEngine.

4. Gotchas (Potential source of user error)

The main source of user error with the TokenAdapter contract is that Users should never transfer tokens directly to the contracts, they must use the join functions or they will not be able to retrieve their tokens.

There are limited sources of user error in the TokenAdapter contract system due to the limited functionality of the system. Barring a contract bug, should a user call join by accident they could always get their tokens back through the corresponding exit call on the given join contract.

The main issue to be aware of here would be a well-executed phishing attack. As the system evolves and potentially more TokenAdapter contracts are created, or more user interfaces are made, there is the potential for a user to have their funds stolen by a malicious TokenAdapter contract which does not actually send tokens to the SafeEngine, but instead to some other contract or wallet.

5. Failure Modes (Bounds on Operating Conditions & External Risk Factors)

There could potentially be a SafeEngine upgrade that would require new TokenAdapter contracts to be created.

If a collateral contract were to go through a token upgrade or have the tokens frozen while a user's collateral was in the system, there could potentially be a scenario in which the users were unable to redeem their collateral after the freeze or upgrade was finished. This scenario likely presents little risk though because the token going through this upgrade would more than likely want to work alongside the community to be sure this was not an issue.