README.md

Covalent X Token (CXT)

Access Control Lists

CovalentNetworkToken.sol

• EMISSION_ROLE: This role is granted to the emissionManager. It allows the role holders to mint new tokens.
• CAP_MANAGER_ROLE: This role is granted to the protocolCouncil. It allows the role holder to update the mint cap.
• PERMIT2_REVOKER_ROLE: This role is granted to the protocolCouncil and emergencyCouncil. It allows the role holders to update the permit2Enabled state, which controls whether the permit2 contract has full approval by default.

CovalentMigration.sol

• MIGRATION_ROLE: This role is granted to the migrationManager. It allows the role holder to migrate tokens from the old contract to the new contract.

DefaultEmissionManager.sol

• EMISSION_ROLE: This role is granted to the emissionManager. It allows the role holder to mint new tokens.
• CAP_MANAGER_ROLE: This role is granted to the protocolCouncil. It allows the role holder to update the mint cap.
• PERMIT2_REVOKER_ROLE: This role is granted to the protocolCouncil and emergencyCouncil. It allows the role holders to update the permit2Enabled state, which controls whether the permit2 contract has full approval by default.

Installation Steps

1. Clone the above repository
2. Install Foundry by following the instructions from here

   curl -L https://foundry.paradigm.xyz | bash
   

   then follow the steps on screen to setup foundryup
3. Run

   foundryup and then run npm install
   

4. Now you're ready with the setup, you can build, compile, test, deploy

Deploy

Steps for testing, reviewing, and deploying a smart contract to a blockchain.

1. Once the above setup is completed successfully, create an .env file and configure all the details as per .env.example.
2. For compiling and testing the contracts you can execute:
   • Compile: this will generate the abi's in out/* respectively

   forge build
   

   • Run test cases:

   forge test
   

   • For detailed log of test scenarios or individual test cases, run: forge test --match-test test_MintDelay -vvv (replace test_MintDelay with other function names).
3. You will be able to see the test cases run and play with them accordingly if needed.
4. For compiling the contracts,

   npm run postinstall
   

   or

   npm run compile-contract-types
   

   (if facing any errors Error occured: Not a valid ABI then remove build-info folder from out dir and run the above command again) - this will generate the types for the contracts and you can find the abi's in out/* respectively.
5. After successful compilation, you can deploy contracts by running

      npm run deploy -- --rpc-url <RPC_URL>
   

6. After a successful deployment of the token contract, you will see 3 addresses:
   1. Covalent X Token address
   2. Covalent Migration address
   3. Default Emission Manager address
7. The deployments are stored in ./broadcast

Migrate old token holders

Procedures for transferring token holders from one contract to another, ensuring accuracy and security.

• This repo has 3 custom scripts which help us in transferring the tokens to holders.

• Under the script folder, we have 3 TypeScript scripts:

  • batchTransfer.ts
  • batchTransferCSV.ts
  • GetHoldersLists.ts

• GetHoldersLists.ts:

  1. Using the ETHERSCAN_API_KEY and CQT address initialized by .env, this script fetches all the current CQT Holders and creates a holders.json file under script/staticFiles.
  2. To run this script use the command npm run fetch-holders.

• batchTransfer.ts:

  1. This script fetches all the holders from the above-generated JSON file along with the balance that needs to be distributed.
  2. Has extra two features along with batch transfer as below:

  const ignoreAddresses = ['0xb270fc573f9f9868ab11b52ae7119120f6a4471d', '0x6af3d183d225725d975c5eaa08d442dd01aad8ff'];
  const ignoreAmount = ethers.utils.parseUnits('5000', 18);

  • ignoreAddresses is an array of addresses to be excluded from the batch transfer.
  • ignoreAmount is a constant to exclude holders with ignoreAmount <= from the batch transfer (e.g., holders with 5000 or less CQT won’t receive any tokens).
  3. To run this script, use the command npm run distribute-tokens.

• batchTransferCSV.ts:

  1. This script requires providing a CSV file of holders as Tokenholders.csv under script/staticFiles and then transfers the tokens to the holders in the given CSV file.
  2. Has extra two features along with batch transfer as below:

  const ignoreAddresses = ['0xb270fc573f9f9868ab11b52ae7119120f6a4471d', '0x6af3d183d225725d975c5eaa08d442dd01aad8ff'];
  const ignoreAmount = ethers.utils.parseUnits('100', 18);

  • ignoreAddresses is an array of addresses to be excluded from the batch transfer.
  • ignoreAmount is a constant to exclude holders with ignoreAmount <= from the batch transfer (e.g., holders with 100 or less CQT won’t receive any tokens).
  3. To run this script, use the command npm run distributeCSV.

  Inflation Rate and MintPerSecondCap Calculation

FAQ

How to calculate the Inflation Rate?

The inflation rate is calculated using the logarithm of the desired annual increase. For a 5% increase, the calculation is as follows:

• Formula: INTEREST_PER_YEAR_LOG2 = log2(1.05) = 0.07038932789139801e18
• Here, 1.05 represents the initial supply of 1.00 (1 billion) plus the 5% increase.

How to calculate MintPerSecondCap?

The mintPerSecondCap is calculated based on the annual compounded inflation but needs to consider a longer timeframe for accuracy. Initial calculations for 1 year might suggest 1.59 CXT per second, but over 10 years, due to compounding, the average increases:

• For One Year: 5% of 1 billion = 50 million / (365*24*60*60) = 1.59 CXT per second
• Over 10 Years (Compounded): Total minted over 10 years / (10*365*24*60*60) = ~2 CXT per second
• Given the compounded rate, we've set mintPerSecondCap = 2.5e18 (or 2.5 tokens per second) as a conservative cap.

This approach ensures that the mintPerSecondCap is sufficiently conservative to cover the compounded inflation rate over a decade without allowing excessive minting.