ERC-7204: Contract wallet management token

Focuses on fungible token management within smart contract wallets, offering enhanced transaction flexibility and security

Abstract

This proposal introduces a smart contract wallet-based approach for managing tokens, focusing on utilizing the programmable features of smart contract wallets for asset management. Additionally, it introduces functions such as tokenTransfer, tokenApprove, tokenApproveForAll, tokenIsApproveForAll and tokenAllowance, which provide enhanced control over token transactions. This approach seeks to enhance token management by utilizing the built-in features of smart contract wallets, thus offering a more adaptable, secure, and efficient method for managing token transactions.

Motivation

An externally-owned account (EOA) wallet has no state and code storage, while the smart contract wallet does.

Account abstraction (AA) is a direction of the smart contract wallet, which works around abstract accounts. This ERC can also be an extension based on ERC-4337 or as a plug-in for wallets.

The smart contract wallet allows the user’s own account to have state and code, bringing programmability to the wallet. We think there are more directions to expand. For example, token asset management, functional expansion of token transactions, etc.

The smart contract wallet interface of this ERC is for asset management and asset approval. It supports the simpletoken ERC-X, and ERC-20 is backward compatible with ERC-X, so it can be compatible with the management of all fungible tokens in the existing market.

The proposal aims to achieve the following goals:

1. Assets are allocated and managed by the wallet itself, such as approve and allowance, which are configured by the user’s contract wallet, rather than controlled by the token asset contract, to avoid some existing ERC-20 contract risks.
2. Add the tokenTransfer function, the transaction initiated by the non-smart wallet itself or will verify the allowance amount.
3. Add tokenApprove, tokenAllowance, tokenApproveForAll, tokenIsApproveForAll functions. The user wallet itself supports approve and provides approve. for single token assets and all token assets.
4. user wallet can choose batch approve and batch transfer.
5. Users can choose to add hook function before and after their tokenTransfer to increase the user’s more playability.
6. The user can choose to implement the tokenReceive function.

Specification

The key words “MUST”, “MUST NOT”, “REQUIRED”, “SHALL”, “SHALL NOT”, “SHOULD”, “SHOULD NOT”, “RECOMMENDED”, “NOT RECOMMENDED”, “MAY”, and “OPTIONAL” in this document are to be interpreted as described in RFC 2119 and RFC 8174.

** Compliant contract must implement the ERC-165 interfaces**

/// @title ERC-7204 
/// @dev See https://eips.ethereum.org/EIPS/eip-7204
/// @dev Note: the ERC-165 identifier for this interface is 0xf73edcda
pragma solidity ^0.8.20;

interface IERC7204 /* is ERC165 */ {

    /**
     * @notice Used to notify listeners that owner has granted approval to the user to manage assets tokens.
     * @param asset Address of the token
     * @param owner Address of the account that has granted the approval for token‘s assets
     * @param spender Address of the spender
     * @param value The amount allowed to spend
     */
    event TokenApproval(
        address indexed asset,
        address indexed owner, 
        address indexed spender, 
        uint256 value
    );

    /**
     * @notice Used to notify listeners that owner has granted approval to the spender to manage all token .
     * @param asset Address of the token
     * @param owner Address of the account that has granted the approval for token‘s assets
     * @param approved approve all token
     */
    event TokenApprovalForAll(
        address indexed owner, 
        address indexed spender,
        bool approved
    );

    /**
     * @notice Approve token
     * @dev Allows spender address to withdraw from your account multiple times, up to the value amount.
     * @dev If this function is called again it overwrites the current allowance with value.
     * @dev Emits an {TokenApproval} event.
     * @param asset Address of the token
     * @param spender Address of the spender
     * @param value The amount allowed to spend
     * @return success The bool value returns whether the approve is successful
     */
    function tokenApprove(address asset, address spender, uint256 value) 
        external 
        returns (bool success);

    /**
     * @notice read token allowance value
     * @param asset Address of the token
     * @param spender Address of the spender
     * @return remaining The asset amount which spender is still allowed to withdraw from owner.
     */
    function tokenAllowance(address asset, address spender) 
        external
        view
        returns (uint256 remaining);

    /**
     * @notice Approve all token
     * @dev Allows spender address to withdraw from your wallet all token.
     * @dev Emits an {TokenApprovalForAll} event.
     * @param spender Address of the spender
     * @param approved Approved all tokens
     * @return success The bool value returns whether the approve is successful
     */
    function tokenApproveForAll(address spender, bool approved) 
        external 
        returns (bool success);

    /**
     * @notice read spender approved value
     * @param spender Address of the spender
     * @return approved Whether to approved spender all tokens
     */
    function tokenIsApproveForAll(address spender) 
        external
        view
        returns (bool approved);

    /**
     * @notice Transfer token
     * @dev must call asset.transfer() inside the function
     * @dev If the caller is not wallet self, must verify the allowance and update the allowance value
     * @param asset Address of the token
     * @param to Address of the receive
     * @param value The transaction amount
     * @return success The bool value returns whether the transfer is successful
     */
    function tokenTransfer(address asset, address to, uint256 value) 
        external 
        returns (bool success); 
}

Rationale

the key technical decisions in this proposal are:

Improved Approve Mechanism

• Current vs. Proposed: In the existing ERC-20 system, an externally-owned account (EOA) directly interacts with token contracts to approve. The new tokenApprove and tokenApproveForAll functions in this proposed enable more precise control over token usage within a wallet contract, a significant improvement over the traditional method.
• Enhanced Security: This mechanism mitigates risks like token over-approval by shifting approval control to the user’s smart contract wallet.
• Programmability: Users gain the ability to set advanced approval strategies, such as conditional or time-limited approvals, the tokenApproveForAll function specifically allows for a universal setting all tokens. these were not possible with traditional ERC-20 tokens.

Optimized Transfer Process

• Efficiency and Security: The tokenTransfer function streamlines the token transfer process, making transactions both more efficient and secure.
• Flexibility: Allows the integration of custom logic (hooks) before and after transfers, enabling additional security checks or specific actions tailored to the user’s needs.

Support for Batch Operations

• Increased Efficiency: Users can simultaneously handle multiple approve or transfer operations, significantly boosting transaction efficiency.
• Enhanced User Experience: Simplifies the management of numerous assets, improving the overall experience for users with large portfolios.

Backwards Compatibility

This ERC can be used as an extension of ERC-4337 and is backward compatible with ERC-4337.

Security Considerations

No security considerations were found.

Copyright

Copyright and related rights waived via CC0.

Citation

Please cite this document as:

Xiang (@wenzhenxiang), Ben77 (@ben2077), Mingshi S. (@newnewsms), "ERC-7204: Contract wallet management token [DRAFT]," Ethereum Improvement Proposals, no. 7204, June 2023. [Online serial]. Available: https://eips.ethereum.org/EIPS/eip-7204.