pallet-xcm: add new extrinsic for asset transfers using explicit XCM transfer types #3695

acatangiu · 2024-03-14T11:54:28Z

Description

Add transfer_assets_using() for transferring assets from local chain to destination chain using explicit XCM transfer types such as:

TransferType::LocalReserve: transfer assets to sovereign account of destination chain and forward a notification XCM to dest to mint and deposit reserve-based assets to beneficiary.
TransferType::DestinationReserve: burn local assets and forward a notification to dest chain to withdraw the reserve assets from this chain's sovereign account and deposit them to beneficiary.
TransferType::RemoteReserve(reserve): burn local assets, forward XCM to reserve chain to move reserves from this chain's SA to dest chain's SA, and forward another XCM to dest to mint and deposit reserve-based assets to beneficiary. Typically the remote reserve is Asset Hub.
TransferType::Teleport: burn local assets and forward XCM to dest chain to mint/teleport assets and deposit them to beneficiary.

By default, an asset's reserve is its origin chain. But sometimes we may want to explicitly use another chain as reserve (as long as allowed by runtime IsReserve filter).

This is very helpful for transferring assets with multiple configured reserves (such as Asset Hub ForeignAssets), when the transfer strictly depends on the used reserve.

E.g. For transferring Foreign Assets over a bridge, Asset Hub must be used as the reserve location.

Example usage scenarios

Transfer bridged ethereum ERC20-tokenX between ecosystem parachains.

ERC20-tokenX is registered on AssetHub as a ForeignAsset by the Polkadot<>Ethereum bridge (Snowbridge). Its asset_id is something like (parents:2, (GlobalConsensus(Ethereum), Address(tokenX_contract))). Its original reserve is Ethereum (only we can't use Ethereum as a reserve in local transfers); but, since tokenX is also registered on AssetHub as a ForeignAsset, we can use AssetHub as a reserve.

With this PR we can transfer tokenX from ParaA to ParaB while using AssetHub as a reserve.

Transfer AssetHub ForeignAssets between parachains

AssetA created on ParaA but also registered as foreign asset on Asset Hub. Can use AssetHub as a reserve.

And all of the above can be done while still controlling transfer type for fees so mixing assets in same transfer is supported.

Tests

Added integration tests for showcasing:

transferring local (not bridged) assets from parachain over bridge using local Asset Hub reserve,
transferring foreign assets from parachain to Asset Hub,
transferring foreign assets from Asset Hub to parachain,
transferring foreign assets from parachain to parachain using local Asset Hub reserve.

Later Edit: NOTE:

This PR has a followup PR that slightly changes the name and API: #4260

…hmarks instead

Add `transfer_assets_using_reserve()` for transferring assets from local chain to destination chain using an explicit reserve location (typically local Asset Hub). By default, an asset's reserve is its origin chain. But sometimes we may want to explicitly use another chain as reserve (as long as allowed by runtime `IsReserve` filter). This is very helpful for transferring assets with multiple configured reserves (such as Asset Hub ForeignAssets), when the transfer strictly depends on the used reserve. E.g. For transferring Foreign Assets over a bridge, Asset Hub must be used as the reserve location.

…ge using local asset hub as reserve

franciscoaguirre · 2024-03-18T10:19:21Z

Just to double check. This two reserves issue happens because a token is teleported between two locations, right? It's not because a token is reserved transferred somewhere and then reserved transferred again from that main reserve into some sort of secondary reserve.

acatangiu · 2024-03-18T10:49:20Z

Just to double check. This two reserves issue happens because a token is teleported between two locations, right? It's not because a token is reserved transferred somewhere and then reserved transferred again from that main reserve into some sort of secondary reserve.

It is the former. Teleporting assets between chains requires the same level of trust as allowing those chains to act as reserves for said asset. With teleports, it is conceptually the same asset on both chains, unlike reserve-based transfers where the real asset stays put within its borders while outside the borders (i.e. destination chain) a derivative asset is used to represent it.

This PR adds utility function for reserve-based transfers (not teleports) of a given asset, but using one of the assets secondary reserve locations (any other chain where it can be teleported to/from).

I added some example scenarios to the PR description for more clarity.

acatangiu · 2024-03-18T11:00:30Z

cc @vgeddes @alistair-singh

…sfer-using-explicit-reserve

polkadot/xcm/pallet-xcm/src/lib.rs

…sfer-using-explicit-reserve

albertov19 · 2024-04-22T13:47:18Z

Hey @acatangiu, one scenario that is currently not covered by the PolkadotXCM pallet is when you try to transfer a token from Moonbeam to AH (reserve chain) that is not an XCM-fee token (not sufficient in AH). Moonbeam wants to pay that XCM execution with, for example, DOT.

Moonbeam only has the relay chain as DOT reserve, and we can't have AH because then we would have 2 reserve chains for 1 asset, which could create many new problems with SA's balances.

So, ideally, we could have a way in which we do something like:

Moonbeam (InitiateReserveWithdraw) -> Polkadot (WithdrawAsset, ClearOrigin, ....)

Polkadot  -> AssetHub (XCM Instructions to take out the Token and send it to address

The main problem with the approach above is the ClearOrigin, which deletes all information that the message is being routed from Moonbeam. Is there an alternate scenario that this can be done?

Mainly because we have new assets being created in AH, and they are not sufficient assets, meaning that to send them back, users need to pay with either USDC/USDT.

XTokens allowed for such an approach in which 1 XCM is sent to the Relay Chain to send DOT to Parachains SA account in AH while another XCM was sent to AH to withdraw DOT to buy execution to transfer the token. However, this approach relied on the first XCM message executing successfully, so teams would usually have a DOT buffer in AH SA.

acatangiu · 2024-04-22T14:32:17Z

That is correct, and I don't believe PolkadotXCM will or even could solve this problem (in a generic way for any asset and any chain).

Moonbeam only has the relay chain as DOT reserve, and we can't have AH because then we would have 2 reserve chains for 1 asset, which could create many new problems with SA's balances.

This is the same problem HydraDX and other parachains too are probably facing.
Unfortunately, there is no alternative scalable option I can see other than allowing these multiple reserves and (auto)balancing SAs.

The problem is not limited to DOT. The problem ultimately comes from having both reserve-based transfers as well as teleports allowed in our ecosystem. Once you allow a teleport between two chains, then both of those should be able to act as reserves, otherwise the teleport doesn't make sense.

E.g.: parachain assets registered as ForeignAssets on AH and teleported there. The "owner" parachain will want to allow AH to act as a reserve for them, and expose their asset to all the other chains/bridges/CEXs/etc that are already integrated with AH.
The "users" of their asset will have the same issue: the asset's reserve is split between AH and the "owner" parachain.

XTokens allowed for such an approach in which 1 XCM is sent to the Relay Chain to send DOT to Parachains SA account in AH while another XCM was sent to AH to withdraw DOT to buy execution to transfer the token. However, this approach relied on the first XCM message executing successfully, so teams would usually have a DOT buffer in AH SA.

Exactly! Ultimately, parachains need "some buffer" in AH SA anyway.

I am hoping that with some smarter way of keeping SAs balanced, this problem will go away and workarounds like sending multiple XCMs and waiting for them to happen in a certain sequence will not be needed anymore.

The silver lining here is that the problem is very generic and asset/chain agnostic, and we can decide on some mechanism to auto-balance these SAs, that every chain can use.
E.g. a new pallet_sa_management where root/admin can register several SA locations per asset along with some % distribution for each, that periodically polls the remote balances of those SAs and moves liquidity around to stay within configured distribution %.

albertov19 · 2024-04-22T15:23:54Z

The silver lining here is that the problem is very generic and asset/chain agnostic, and we can decide on some mechanism to auto-balance these SAs, that every chain can use.
E.g. a new pallet_sa_management where root/admin can register several SA locations per asset along with some % distribution for each, that periodically polls the remote balances of those SAs and moves liquidity around to stay within configured distribution %.

The main issue is SA management. It would then require users to go through undesirable routes to get their assets where they want to (for example, SA in Polkadot has 100 DOT, and in AH, it has 20 DOT, and a user wants to get 40 DOT in Polkadot). This creates bad UX.

What about creating a call in which you can route XCM and assets through another chain? I guess the application of this is too specific. And could we do something similar to what xTokens is doing, but just from a UI point of view?

acatangiu · 2024-04-22T16:43:42Z

The main issue is SA management. It would then require users to go through undesirable routes to get their assets where they want to (for example, SA in Polkadot has 100 DOT, and in AH, it has 20 DOT, and a user wants to get 40 DOT in Polkadot). This creates bad UX.

In practice, liquidity should be much larger, and with some periodic automated balancing mechanism this should never happen (unless the user is some whale moving a lot of liquidity at once).
E.g. Moonbeam right now has 2,521,028 DOT in reserve in its SA on the relay chain (5Ec4AhPVjsshXjh8ynp6MwaJTJBnen3pkHiiyDhHfie5VWkN). A very simplistic 50/50 split with SA on AH that is rebalanced once a day would give Moonbeam users a window of 24h to withdraw 1.25M DOT from Moonbeam before reserve runs out.

A somewhat smarter rebalancer: component be deployed on target chains that tracks SA balance and requests liquidity from owner chain if it falls below a threshold, thus triggering rebalancing on-demand.

What about creating a call in which you can route XCM and assets through another chain? I guess the application of this is too specific. And could we do something similar to what xTokens is doing, but just from a UI point of view?

Could be done, but don't know of a way to do it generically, chain/asset agnostic - and without a generic mechanism I strongly recommend against it as it will not scale. We will fragment the ecosystem even further with tokens and chains having custom workarounds and special gotchas.

There is also an efficiency disadvantage (not really important, but worth mentioning): at the end of the day this is also an automated SA rebalancing mechanism, it just happens on every transfer regardless of need (with the user paying for two extra XCMs each time: to 1. signal the main reserve to 2. send liquidity to secondary reserve).

Polkadot-Forum · 2024-04-22T17:23:05Z

This pull request has been mentioned on Polkadot Forum. There might be relevant details there:

https://forum.polkadot.network/t/managing-sas-on-multiple-reserve-chains-for-same-asset/7538/1

acatangiu · 2024-04-22T17:23:40Z

I created a forum topic to get more visibility and ideas on the problem: https://forum.polkadot.network/t/managing-sas-on-multiple-reserve-chains-for-same-asset/7538

xlc · 2024-04-23T01:35:52Z

I raised this issue a year ago paritytech/cumulus#2398

acatangiu · 2024-04-23T05:37:17Z

I raised this issue a year ago paritytech/cumulus#2398

Apparently it takes more than raising an issue to solve an ecosystem-wide problem :)

Please join the discussion on the forum, help me engage all the parachains, and collectively decide on a solution.

I can commit to implement whatever we, the ecosystem, decide is necessary, if help is required from Parity.

…estination (#4260) Change `transfer_assets_using_type()` to not assume `DepositAssets` as the intended use of the assets on the destination. Instead provides the caller with the ability to specify custom XCM that be executed on `dest` chain as the last step of the transfer, thus allowing custom usecases for the transferred assets. E.g. some are used/swapped/etc there, while some are sent further to yet another chain. Note: this is a follow-up on #3695, bringing in an API change for `transfer_assets_using_type()`. This is ok as the previous version has not been yet released. Thus, its first release will include the new API proposed by this PR. This allows usecases such as: https://forum.polkadot.network/t/managing-sas-on-multiple-reserve-chains-for-same-asset/7538/4 BTW: all this pallet-xcm asset transfers code will be massively reduced once we have polkadot-fellows/xcm-format#54 --------- Signed-off-by: Adrian Catangiu <adrian@parity.io>

Polkadot-Forum · 2024-05-10T14:54:35Z

This pull request has been mentioned on Polkadot Forum. There might be relevant details there:

https://forum.polkadot.network/t/xcm-user-and-developer-experience-improvements/4511/21

…h#3695) Add `transfer_assets_using_type_and_then()` for transferring assets from local chain to destination chain using explicit XCM transfer types: - `TransferType::LocalReserve`: transfer assets to sovereign account of destination chain and forward a notification XCM to `dest` to mint and deposit reserve-based assets to `beneficiary`. - `TransferType::DestinationReserve`: burn local assets and forward a notification to `dest` chain to withdraw the reserve assets from this chain's sovereign account and deposit them to `beneficiary`. - `TransferType::RemoteReserve(reserve)`: burn local assets, forward XCM to `reserve` chain to move reserves from this chain's SA to `dest` chain's SA, and forward another XCM to `dest` to mint and deposit reserve-based assets to `beneficiary`. Typically the remote `reserve` is Asset Hub. - `TransferType::Teleport`: burn local assets and forward XCM to `dest` chain to mint/teleport assets and deposit them to `beneficiary`. By default, an asset's reserve is its origin chain. But sometimes we may want to explicitly use another chain as reserve (as long as allowed by runtime `IsReserve` filter). This is very helpful for transferring assets with multiple configured reserves (such as Asset Hub ForeignAssets), when the transfer strictly depends on the used reserve. E.g. For transferring Foreign Assets over a bridge, Asset Hub must be used as the reserve location. ERC20-tokenX is registered on AssetHub as a ForeignAsset by the Polkadot<>Ethereum bridge (Snowbridge). Its asset_id is something like `(parents:2, (GlobalConsensus(Ethereum), Address(tokenX_contract)))`. Its _original_ reserve is Ethereum (only we can't use Ethereum as a reserve in local transfers); but, since tokenX is also registered on AssetHub as a ForeignAsset, we can use AssetHub as a reserve. With this PR we can transfer tokenX from ParaA to ParaB while using AssetHub as a reserve. AssetA created on ParaA but also registered as foreign asset on Asset Hub. Can use AssetHub as a reserve. And all of the above can be done while still controlling transfer type for `fees` so mixing assets in same transfer is supported. Provides the caller with the ability to specify custom XCM that be executed on `dest` chain as the last step of the transfer, thus allowing custom usecases for the transferred assets. E.g. some are used/swapped/etc there, while some are sent further to yet another chain. This allows usecases such as: https://forum.polkadot.network/t/managing-sas-on-multiple-reserve-chains-for-same-asset/7538/4 Signed-off-by: Adrian Catangiu <adrian@parity.io>

…4462) Add `transfer_assets_using_type_and_then()` for transferring assets from local chain to destination chain using explicit XCM transfer types: - `TransferType::LocalReserve`: transfer assets to sovereign account of destination chain and forward a notification XCM to `dest` to mint and deposit reserve-based assets to `beneficiary`. - `TransferType::DestinationReserve`: burn local assets and forward a notification to `dest` chain to withdraw the reserve assets from this chain's sovereign account and deposit them to `beneficiary`. - `TransferType::RemoteReserve(reserve)`: burn local assets, forward XCM to `reserve` chain to move reserves from this chain's SA to `dest` chain's SA, and forward another XCM to `dest` to mint and deposit reserve-based assets to `beneficiary`. Typically the remote `reserve` is Asset Hub. - `TransferType::Teleport`: burn local assets and forward XCM to `dest` chain to mint/teleport assets and deposit them to `beneficiary`. By default, an asset's reserve is its origin chain. But sometimes we may want to explicitly use another chain as reserve (as long as allowed by runtime `IsReserve` filter). This is very helpful for transferring assets with multiple configured reserves (such as Asset Hub ForeignAssets), when the transfer strictly depends on the used reserve. E.g. For transferring Foreign Assets over a bridge, Asset Hub must be used as the reserve location. ERC20-tokenX is registered on AssetHub as a ForeignAsset by the Polkadot<>Ethereum bridge (Snowbridge). Its asset_id is something like `(parents:2, (GlobalConsensus(Ethereum), Address(tokenX_contract)))`. Its _original_ reserve is Ethereum (only we can't use Ethereum as a reserve in local transfers); but, since tokenX is also registered on AssetHub as a ForeignAsset, we can use AssetHub as a reserve. With this PR we can transfer tokenX from ParaA to ParaB while using AssetHub as a reserve. AssetA created on ParaA but also registered as foreign asset on Asset Hub. Can use AssetHub as a reserve. And all of the above can be done while still controlling transfer type for `fees` so mixing assets in same transfer is supported. Provides the caller with the ability to specify custom XCM that be executed on `dest` chain as the last step of the transfer, thus allowing custom usecases for the transferred assets. E.g. some are used/swapped/etc there, while some are sent further to yet another chain. This allows usecases such as: https://forum.polkadot.network/t/managing-sas-on-multiple-reserve-chains-for-same-asset/7538/4 Signed-off-by: Adrian Catangiu <adrian@parity.io>

Polkadot-Forum · 2024-06-07T14:18:56Z

This pull request has been mentioned on Polkadot Forum. There might be relevant details there:

https://forum.polkadot.network/t/rfc-xcm-asset-transfer-program-builder/8528/1

acatangiu added 7 commits March 14, 2024 13:50

pallet-xcm: deprecate unlimited_* weight extrinsics

dda9308

pallet-xcm: remove extrinsics guessed weight and rely on runtime benc…

1db1cae

…hmarks instead

add more trace logging to XCM transport

547eeee

minor style fix

c7ee1af

integration-tests: add scenario for parachain sending asset over brid…

ed77fde

…ge using local asset hub as reserve

make penpal UniversalLocation configurable

a7a44c9

acatangiu added T6-XCM This PR/Issue is related to XCM. T2-pallets This PR/Issue is related to a particular pallet. T15-bridges This PR/Issue is related to bridges. labels Mar 14, 2024

acatangiu self-assigned this Mar 14, 2024

acatangiu requested a review from a team as a code owner March 14, 2024 11:54

paritytech-review-bot bot requested review from a team March 14, 2024 11:55

acatangiu mentioned this pull request Mar 17, 2024

Re-visit pallet_xcm benchmarks for teleport_assets / reserve_transfer_assets / transfer_assets paritytech/parity-bridges-common#2874

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IkerAlus mentioned this pull request Mar 20, 2024

Add support for transfer_assets_using_reserve() call/extrinsic of pallet XCM paritytech/asset-transfer-api#384

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acatangiu added 6 commits March 22, 2024 14:26

penpal: charge XCM delivery fees for accurate real-world testing

ffa6250

integration-tests: fix tests for penpal charging delivery fees

4afba95

Merge branch 'master' of github.com:paritytech/polkadot-sdk into tran…

210cdd2

…sfer-using-explicit-reserve

fix test

c918bea

add prdoc

3db344b

fix clippy

10d2c40

franciscoaguirre reviewed Mar 25, 2024

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polkadot/xcm/pallet-xcm/src/lib.rs Outdated Show resolved Hide resolved

acatangiu mentioned this pull request Mar 26, 2024

pallet-xcm transfer_assets should take fees separately instead of using the index in assets #3847

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acatangiu added 3 commits March 27, 2024 17:36

Merge branch 'master' of github.com:paritytech/polkadot-sdk into tran…

5b48155

…sfer-using-explicit-reserve

add test for westend->rococo direction

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nit

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acatangiu added this pull request to the merge queue Apr 12, 2024

bkontur mentioned this pull request Apr 12, 2024

Remove xcm::v3 from assets-common nits #4037

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Merged via the queue into paritytech:master with commit 1e971b8 Apr 12, 2024
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acatangiu deleted the transfer-using-explicit-reserve branch April 12, 2024 17:18

acatangiu mentioned this pull request Apr 22, 2024

Sending bridged DOT from AH to parachain fails after upgrade polkadot-fellows/runtimes#281

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alistair-singh mentioned this pull request Apr 22, 2024

feat: enable bridged reserves from AssetHub galacticcouncil/hydration-node#784

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acatangiu mentioned this pull request Apr 23, 2024

pallet-xcm::transfer_assets_using_type_and_then() supports custom actions on destination #4260

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acatangiu mentioned this pull request Jun 7, 2024

XCM Asset Transfer Program Builder #4736

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Roznovjak mentioned this pull request Sep 2, 2024

chore: upgrade to polkadot v1.11.0 galacticcouncil/Basilisk-node#666

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Roznovjak mentioned this pull request Sep 13, 2024

chore: upgrade to polkadot v1.11.0 galacticcouncil/hydration-node#889

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Agusrodri mentioned this pull request Oct 5, 2024

Add support for transfer_assets_using_type_and_then extrinsic in pallet-xcm precompile Moonsong-Labs/moonkit#54

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pallet-xcm: add new extrinsic for asset transfers using explicit XCM transfer types #3695

pallet-xcm: add new extrinsic for asset transfers using explicit XCM transfer types #3695

acatangiu commented Mar 14, 2024 •

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pallet-xcm: add new extrinsic for asset transfers using explicit XCM transfer types #3695

pallet-xcm: add new extrinsic for asset transfers using explicit XCM transfer types #3695

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acatangiu commented Mar 14, 2024 • edited Loading

Description

Example usage scenarios

Transfer bridged ethereum ERC20-tokenX between ecosystem parachains.

Transfer AssetHub ForeignAssets between parachains

Tests

Later Edit: NOTE:

franciscoaguirre commented Mar 18, 2024

acatangiu commented Mar 18, 2024

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albertov19 commented Apr 22, 2024

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