Scaling with TokenRemote

Math Example

Token scaling is a crucial part of cross-chain token transfers, especially when dealing with varying decimal denominations between the home and remote assets. This chapter will provide a math example to demonstrate how the scaling works with TokenRemote contracts.

In this example, let's assume we are bridging an ERC-20 token from a home chain where the token uses 6 decimal places to a remote chain as the native token that uses 18 decimal places (e.g., USDC on Avalanche).

The key variables here are:

• _homeTokenDecimals = 6
• _tokenDecimals = 18
• _tokenMultiplier is calculated as:

This multiplier helps scale the token amounts when transferring between chains.

Scenario 1: Transferring from Home (6 decimals) to Remote (18 decimals)

When transferring tokens from the home chain (6 decimals) to the remote chain (18 decimals), the token amount is multiplied by _tokenMultiplier to normalize the denomination. If multiplyOnRemote = true, we perform the following:

For example, if we transfer 100 USDC (which is represented as 100 × 10^6 in the 6-decimal system), it will be scaled as follows on the remote chain:

100 × 10^6 × 10^{12} = 100 × 10^{18}

Thus, the value on the remote chain would be 100 × 10^18, equivalent to 100 USDC in 18 decimals.

Scenario 2: Transferring from Remote (18 decimals) to Home (6 decimals)

When transferring tokens back from the remote chain (18 decimals) to the home chain (6 decimals), the token amount is divided by _tokenMultiplier. If multiplyOnRemote = true, the reverse scaling applies:

For example, transferring 100 × 10^{18} (which is 100 USDC in the 18-decimal system) back to the home chain would scale down:

100 × 10^{18} ÷ 10^{12} = 100 × 10^6

This results in 100 × 10^6 USDC, which correctly represents 100 USDC in the 6-decimal system.

By applying this multiplier, tokens retain their value across chains with different decimal systems.