After Superchain’s successful projection of ‘One Superchain, Many Chains’, now Optimism is offering a whole new concept of native interoperability with ‘One Superchain, One Token’ approach enabled through the SuperchainERC20 standard. Each project in the Superchain ecosystem– be it OP Stack Layer2, Layer3, or Optimism dApps, can now implement SuperchainERC20 standard for their token and benefit from cross-chain experience Superchain rolls out its interop upgrade. Let’s dive deeper and learn more about SuperchainERC20 and how it is simplifying rollup interoperability.

The entire concept of Superchain is based on enabling native interoperability, allowing isolated and unique chains to securely read messages and the state of other chains while seamlessly transferring assets across the Superchain ecosystem. What’s more interesting is that these interoperability-related activities happen without needing the chains to interact with underlying Layer1.

This approach results in the following key benefits:

• 1-block asset latency in asset movement, which makes the entire token transfer process a highly capital-efficient method.

• Offers superior developer experience for all the projects built with Superchain. 

• Ensures secure cross-chain transfer of ETH, ERC-20s,and now SuperchainERC20s  across layer2s.

• Support the creation of applications that are horizontally scalable.

In a practical sense, Superchain Interop allows users to easily and securely move cross-chain assets while retaining fairness through OP-governed security. 

As a critical implementation of ERC-7802 (the next-gen cross-token interface standard), SuperchainERC20 offers an interface for enabling smooth cross-chain transfer of assets in the entire Superchain ecosystem. SuperchainERC20’s approach is simple; implementation of ERC-7802, no token wrapping, and no need for liquidity pools. 

We already know that Superchain serves as a hub for unique Layer2s, each having its own unique features, tokenomics, and communities. At present, moving values (assets) across these chains requires certain process, for example- Lock & Mint technique, which is a hassle for both the users and the developers. 

SuperchainERC20 is one of the top Superchain’s key components to support native interoperability, such as Superchain bridge, Message Passing Protocol, and 

SuperchainERC20 standard. This native interoperability powers Superchain to feel like a borderless ecosystem that is optimized for superior user experience. Also, the fusion of SuperchainERC20 + Superchain interoperability will allow for maximized capital efficiency. Here’s a simple breakdown:

Currently, $1M locked on 5 separate chains= requirement for $5M capital.

With SuperchainERC20+ Superchain interop: $1M = accessible across all the chains. 

A good examples for this is NFT game where SuperchainERC20 allows a token on chain-1 to to be utilized on chain-2. Likewise, it will allow a token om chain-3 to get deposited in the liquidity pool in chain-4. With such easy interoperability, SuperchainERC20 expands the token utility scope by allowing assets to be leveraged in many different ways in different ecosystems. 

Major components:

1. Token contract: Implements the advanced bridging functionality for the SuperchainERC20 tokens.

2. Factor Predeploy: This uses a create-2 powered factory to maintain consistency in deploying SuperchainERC20 tokens across all the chains. 

3. Bridging function: Allowing SuperchainERC20 to use various methods like sendERC20 and relayERC20 for smooth cross-chain transfers. 

SuperchainERC20’s technicality is quite similar to other token standards, but it stands apart with a different focus & implementation concepts that are explained here;

• SuperchainERC20 implements (as already discussed) ERC-7802 to leverage a minimal cross-chain mint & burn interface created to work as a common interface for the whole EVM ecosystem.

• SuperchainERC20 keeps the trust assumptions across all the chains, eliminating the need for assumptions around security & latency for transaction execution.

1. Simplified deployments- with no liquidity pools or multiple interfaces, SuperchainERC20 requires zero infrastructure to offer cross-chain token transfers. Instead, it offers a unified interface for Superchain-compatible networks and a cross-chain common interface for the entire EVM ecosystem.

2. Permissionless propagation- Developers building on Superchain can quickly clone an existing token contract and utilize it for their OP Stack Rolllups to enable cross-chain asset transfer. This does not require them to take permission from the original owner or fulfill any other obligations.

3. Unified standard- By implementing ERC-7802 that offers a unified interface to support cross-chain mint & burn functionality for all the OP stack rollups, dApps, and Ethereum.

SuperchainERC20 replaces the traditional lock and mint mechanism with a novel native burning & minting approach. Whenever you move tokens, they are first burned (destroyed) on the source chain and minted (created) on the destination chain. Here’s how the whole setup works:

• Token Burning (source chain): When a user initiates transfer of token from blockchain A to blockchain B, this process starts with burning tokens on the source chain. Here’s how:

Step 1: User adds the recipient’s wallet address on the destination chain and the amount of tokens to transfer. 

Step 2: The equivalent amount of tokens will be burned (permanently) on the source chain.

This process ensures that token supply remains consistent across chains and prevents duplication.

• Token Minting (Destination chain): Token minting process on the destination chain involves the following steps:

Step 1: After verifying the burn on the source chain, the specified amount of tokens is created (minted) on the destination chain.

Step 2: The newly minted tokens are sent directly to the recipient’s wallet address, as specified during the initiation of the transfer.

This will ensure that the recipient gets the tokens on the destination chain, allowing the transfer to finish while maintaining consistency in cross-chain token supply. 

Through this burn & mint concept, Superchain affects only the assets on the source chain (the chain where your assets are located originally rather than impacting the overall token supply. Hence, it keeps the token amount same on all the networks while also ensuring its value remains stable during the cross-chain movement. This allows SuperchainERC20 to maintain a unified, global token supply count. 

The above diagram has illustrated the whole process of SuperchainERC20, where tokens are getting burned on chain A (source chain) and minted on chain B (destination chain) for smoothing cross-chain transfers without needing asset wraps or a liquidity pool. 

Implementing SuperchainERC20 standard ensures that your tokens will benefit from cross-chain interoperability element once the interop upgrade goes live on Superchain. Below are the important steps for a project or application developers to make their token compatible to  SuperchainERC20 :

1. Deploy SuperchainERC20 contract- To ensure token fungibility and allow seamless cross-chain asset transfer; you first need to unify the contract address by adding a common address on all the chains. The popular deterministic methods to do this are; 

• Creating Create2Deployer smart contract.

• Or, deploying OptimismSuperchainERC20Factory– a factory contract for L1-native token.

2. Implement IERC-7802 Interface- SuperchainERC20 requires implementing the IERC7802 interface, which includes the below two bridging functions:

• sendERC20: Supports cross-chain SuperchainERC20 token transfer through burning locally and sending specific messages to the SuperchainERC20Bridge on the target chain via L2toL2CrossDomainMessenger.

• relayERC20: Processes the messages coming from L2toL2CrossDomainMessenger and thus mints the corresponding amount of SuperchainERC20 tokens.

3. Use SuperchainERC20 starter kit for deployment- The SuperchainERC20 starter kit offers a cloneable and handy repository that developers can use to inspect, test, and deploy SuperchainERC20.

Also, you must go through the in-depth implementation details from SuperchainERC20 specifications and common interoperability-related questions from Superchain Interop Explainer section.   

Here’s an example of SuperchainERC20 implementation with end-to-end details.

1. Gaming/ NFT platforms: SuperchainERC20-powered NFT platforms will have the ease to allow their users to mint an NFT on any chain from their desired chain. For example, an artist creates NFT on dApp like NFTs2Me or tofuNFT while their wallet resides on Base Layer2. This eliminates creators’ hassle of transferring funds using centralized services or switching frequently between networks, enabling them a seamless interaction experience.

2. Swaps: With no dependency on exchange and intermediary tokens, SuperchainERC20 allows for easy & efficient chain-to-chain swaps, backed by unified liquidity and low slippage issues.

3. Bridging solutions- SuperchainERC20 removes all the liquidity constraints from the bridges using the mint & burn method. Like, a user can burns 10,000 DAI on Ethereum and mints 10,000 DAI on Zora, removing the need for any pre-funded liquidity pools on the bridge.

4. DeFi applications: SuperchainERC20 enables real-time cross-chain DeFi for all the involved chains. This allows users to stake tokens on chain A and simultaneously use the same tokens as collateral for borrowing on chain B. This way, SuperchainERC20 supports advanced DeFi strategies like cross-chain collateralization and farming with almost zero challenges.

5. Flash loans:

Using SuperchainERC20 standard, platforms can facilitate cross-chain flash loans. You may know that flash loans require repaying loans in the same transaction and on the same chain. But with  SuperchainERC20, you can take a loan on chain A, , swap assets on chain B, and repay on chain C in a simple atomic transaction with full flexibility & security.

Also for DeFi platforms like crypto trading or exchange platforms, SuperhcainERC20 offers all the above benefits, plus novel arbitrage opportunities to ensure their efficient performance. 

SuperchainERC20  is open to all the builders and Superchain innovators worldwide. They can now deploy SuperchainERC20-compatible tokens and be prepared for the Superchain Interop to happen. This upgrade implementation is recommended for all the new & existing tokens in the Superchain ecosystem to be interoperable automatically. Once the Superchain Interop will go live, it will add the below additional features for SuperchainERC20:

• Rapid, 2-second cross-chain execution/settlement.

• Extremely minimized fragmentation.

• Unified liquidity with almost zero fragmentation issues.

• Even more capital efficiency and cross-chain utility.

Your Superchain project, like Superchain rollups, can achieve all these capabilities by quickly implementing the SuperchainERC20 standard. 

Also, if you plan to build an OP Stack Layer2, Zeeve RaaS is ready to assist you. We offer everything, from end-to-end Superchain consulting to Layer2 development and infrastructure management, everything at a 60% lower cost. For more information about Zeeve RaaS, our 1-click OP Stack sandbox tool, or our comprehensive rollup offerings, connect with us. You can send your queries via mail or set up a Zeeve RaaS demo with our experts.