Architecture & Design

The Canto network is a sovereign chain built using the Cosmos SDK and custom modules. Cosmos SDK chains can be scaffolded, built and interacted with using the Ignite CLI.

Canto is EVM-enabled, utilizing a module called Ethermint which deploys an EVM execution environment enabling Solidity code to be deployed directly from the Ethereum network. Canto enables a native bridge between CosmWasm tokens and ERC-20 standard tokens using the ERC-20 module.

This is it how it works:

1. The x/erc20module maintains a canonical one-to-one mapping of native Cosmos Coin denomination to ERC20 Token contract addresses (i.e sdk.Coin ←→ ERC20), called TokenPair. The conversion of the ERC20 tokens ←→ Coin of a given pair can be enabled or disabled via governance.

2. A native Cosmos Coin corresponds to an sdk.Coin that is native to the bank module (which controls account balances and token supply in Cosmos SDK). It can be either the native staking/gas denomination (eg: EVMOS, ATOM, etc) or an IBC fungible token voucher (i.e with denom format of ibc/{hash}). When a proposal is initiated for an existing native Cosmos Coin, the erc20 module will deploy a factory ERC20 contract, representing the ERC20 token for the token pair, giving the module ownership of that contract.

3. During the registration of a Cosmos Coin the following bank Metadata is used to deploy a ERC20 contract:

4. Holders of native Cosmos coins and IBC vouchers on the Canto chain can convert their Coin into ERC20 Tokens, which can then be used in the ethermint EVM, by creating aConvertCoinTx. Vice versa, the ConvertERC20Tx allows holders of ERC20 tokens on the Canto chain to convert ERC-20 tokens back to their native Cosmos Coin representation.

5. The EVM hooks allows users to convert ERC20s to Cosmos Coins by sending an Ethereum tx transfer to the module account address. This enables native conversion of tokens via Metamask and EVM-enabled wallets for both token pairs that have been registered through a native Cosmos coin or an ERC20 token.

To learn more about the Ethermint module, click here (Credit to Tharsis).