Tokenisation

zToken

The yield-generating, tokenized representation of supplies used throughout the Nexus protocol. They implement most of the standard EIP-20/ERC20 token methods with slight modifications, as well as Nexus-specific methods including:

• scaledBalanceOf()

• getScaledUserBalanceAndSupply()

• scaledTotalSupply()

All zTokens also implement EIP-2612, which via the permit() function enables single transaction approve + actions.

zTokens are tokens minted and burnt upon supply and withdraw of assets to an Nexus market. zTokens denote the amount of crypto assets supplied to the protocol and the yield earned on those assets. The zTokens’ value is pegged to the value of the corresponding supplied asset at a 1:1 ratio and can be safely stored, transferred or traded. All yield collected by the zTokens' reserves are distributed to zToken holders directly by continuously increasing their wallet balance.

This contract is the implementation of the interest bearing token for the Nexus Protocol. It inherits the ScaledBalanceTokenBase and EIP712Base token contracts.

All standard EIP20 methods are implemented for zTokens, such as balanceOf, transfer, transferFrom, approve, totalSupply etc.

balanceOf will always return the most up to date balance of the user, which includes their principal balance and the yield generated by the principal balance.

The source code is available on GitHub.

Write Methods

initialize

function initialize(
    IPool initializingPool,
    address treasury,
    address underlyingAsset,
    IAaveIncentivesController incentivesController,
    uint8 zTokenDecimals,
    string calldata zTokenName,
    string calldata zTokenSymbol,
    bytes calldata params
) public virtual

Called when zToken instance is initialized.

Input Parameters:

Name	Type	Description
initializingPool	IPool	The address of the associated pool
treasury	address	The address of the treasury
underlyingAsset	address	The address of the underlying asset
incentivesController	IAaveIncentivesController	The address of the incentives controller for this zToken
zTokenDecimals	uint8	The decimals of the underlying asset
zTokenName	string	The name of the zToken
zTokenSymbol	string	The symbol of the zToken
params	bytes	A set of encoded parameters for additional initialization

mint

function mint(
    address caller,
    address onBehalfOf,
    uint256 amount,
    uint256 index
) external virtual override onlyPool returns (bool)

Mints amount zTokens to user.

Input Parameters:

Name	Type	Description
caller	address	The address performing the mint
onBehalfOf	address	The address of the user that will receive the minted zTokens
amount	uint256	The amount of tokens getting minted
index	uint256	The next liquidity index of the reserve

Return Values:

bool	true if the the previous balance of the user was 0

burn

function burn(
    address from,
    address receiverOfUnderlying,
    uint256 amount,
    uint256 index
) external virtual override onlyPool

Burns zTokens from user and sends the equivalent amount of underlying to receiverOfUnderlying.

In some instances, the mint event could be emitted from a burn transaction if the amount to burn is less than the interest that the user accrued.

Input Parameters:

Name	Type	Description
from	address	The address from which the zTokens will be burned
receiverOfUnderlying	address	The address that will receive the underlying asset
amount	uint256	The amount of tokens that will be burned
index	uint256	The next liquidity index of the reserve

mintToTreasury

function mintToTreasury(uint256 amount, uint256 index) external override onlyPool

Mints zTokens to the reserve treasury.

Input Parameters:

Name	Type	Description
amount	uint256	The amount of tokens getting minted
index	uint256	The address that will receive the underlying asset

transferOnLiquidation

function transferOnLiquidation(
    address from,
    address to,
    uint256 value
) virtual override onlyPool

Transfers zTokens in the event of a borrow being liquidated, in case the liquidator reclaims the zToken.

Input Parameters:

Name	Type	Description
from	address	The address getting liquidated, current owner of the zTokens
to	address	The recipient of zTokens
value	uint256	The amount of tokens getting transferred

transferUnderlyingTo

function transferUnderlyingTo(address target, uint256 amount) external virtual override onlyPool

Transfers the underlying asset to target.

Used by the Pool to transfer assets in borrow(), withdraw() and flashLoan().

Input Parameters:

Name	Type	Description
user	address	The recipient of the underlying
amount	uint256	The amount getting transferred

handleRepayment

function handleRepayment(address user, address onBehalfOf, uint256 amount) external virtual override onlyPool

Handles the underlying received by the zToken after the transfer has been completed.

The default implementation is empty as with standard ERC20 tokens, nothing needs to be done after the transfer is concluded. However in the future there may be zTokens that allow for example to stake the underlying to receive LM rewards. In that case, handleRepayment() would perform the staking of the underlying asset.

Input Parameters:

Name	Type	Description
user	address	The user executing the repayment
onBehalfOf	address`	The address for which the borrow position is repaid
amount	uint256	The amount getting repaid

permit

function permit(
    address owner,
    address spender,
    uint256 value,
    uint256 deadline,
    uint8 v,
    bytes32 r,
    bytes32 s
) external override

Allows a user to permit another account (or contract) to use their funds using a signed message. This enables gas-less transactions and single approval/transfer transactions. Allow passing a signed message to approve spending.

Implements the permit function as for EIP-2612.

Input Parameters:

owner	address	The owner of the funds
spender	address	The spender of the funds
value	uint256	The amount the spender is permitted to spend
deadline	uint256	The deadline timestamp, use type(uint256).max for max/no deadline
v	uint8	The V signature parameter
r	bytes32	The R signature parameter
s	bytes32	The S signature parameter

Example of signing and utilizing permit:

import { signTypedData_v4 } from "eth-sig-util";
import { fromRpcSig } from "ethereumjs-util";
// ... other imports
import zTokenAbi from "./zTokenAbi.json";
// ... setup your web3 provider
const zTokenAddress = "ZTOKEN_ADDRESS";
const zTokenContract = new web3.eth.Contract(zTokenAbi, zTokenAddress);
const privateKey = "YOUR_PRIVATE_KEY_WITHOUT_0x";
const chainId = 1;
const owner = "OWNER_ADDRESS";
const spender = "SPENDER_ADDRESS";
const value = 100; // Amount the spender is permitted
const nonce = 1; // The next valid nonce, use `_nonces()`
const deadline = 1600093162;
const permitParams = {
  types: {
    EIP712Domain: [
      { name: "name", type: "string" },
      { name: "version", type: "string" },
      { name: "chainId", type: "uint256" },
      { name: "verifyingContract", type: "address" },
    ],
    Permit: [
      { name: "owner", type: "address" },
      { name: "spender", type: "address" },
      { name: "value", type: "uint256" },
      { name: "nonce", type: "uint256" },
      { name: "deadline", type: "uint256" },
    ],
  },
  primaryType: "Permit",
  domain: {
    name: "zTOKEN_NAME",
    version: "1",
    chainId: chainId,
    verifyingContract: zTokenAddress,
  },
  message: {
    owner,
    spender,
    value,
    nonce,
    deadline,
  },
};
const signature = signTypedData_v4(Buffer.from(privateKey, "hex"), {
  data: permitParams,
});
// The signature can now be used to execute the transaction
const { v, r, s } = fromRpcSig(signature);
await zTokenContract.methods
  .permit({
    owner,
    spender,
    value,
    deadline,
    v,
    r,
    s,
  })
  .send()
  .catch((e) => {
    throw Error(`Error permitting: ${e.message}`);
  });

rescueTokens

function rescueTokens(
    address token,
    address to,
    uint256 amount
) external override onlyPoolAdmin

Rescue and transfer tokens locked in this contract. Only callable by POOL_ADMIN.

Input Parameters:

Name	Type	Description
token	address	The address of the token
to	address	The address of the recipient
amount	uint256	The amount of token to transfer

View Methods

balanceOf

function balanceOf(address user)
    public
    view
    virtual
    override(IncentivizedERC20, IERC20)
    returns (uint256)

Returns the amount of tokens owned by user.

Overrides the base function.

Input Parameters:

Name	Type	Description
user	address	The address of the user

Return Values:

Type	Description
uint256	The amount of tokens owned by user

totalSupply

function totalSupply() public view virtual override(IncentivizedERC20, IERC20 returns (uint256)

Returns the amount of tokens in existence.

Overrides the base function.

Return Values:

Type	Description
uint256	The amount of tokens in existence

RESERVE_TREASURY_ADDRESS

function RESERVE_TREASURY_ADDRESS() external view override returns (address)

Returns the address of the Aave treasury, controlled by governance, receiving the fees on this zToken.

Return Values:

Type	Description
address	The address of the Aave treasury

UNDERLYING_ASSET_ADDRESS

function UNDERLYING_ASSET_ADDRESS() external view override returns (address)

Returns the address of the underlying reserve asset of this zToken (E.g. WETH for zWETH).

Return Values:

Type	Description
address	The address of the underlying asset

DOMAIN_SEPARATOR

function DOMAIN_SEPARATOR() public view override(IAToken, EIP712Base) returns (bytes32)

Get the domain separator for the token at the current chain.

Return cached value if chainId matches cache, otherwise recomputes separator.

Overrides the base function to fully implement IAToken.

Return Values:

Type	Description
bytes32	The domain separator of the token at current chain

nonces

function nonces(address owner) public view override(IAToken, EIP712Base) returns (uint256)

Returns the nonce value for address specified as parameter. This is the nonce used when calling permit().

Overrides the base function to fully implement IAToken.

Input Parameters:

Name	Type	Description
owner	address	The address of the owner

Return Values:

Type	Description
uint256	The nonce of the owner

Example:

const token = new Contract(zTokenAddress, zToken.abi, provider);
await token.nonces(user);

Pure Methods

getRevision

function getRevision() internal pure virtual override returns (uint256)

Returns the revision number of the contract. Needs to be defined in the inherited class as a constant.

Returns 0x1.

Return Values:

Type	Description
uint256	The revision number

VariableDebtToken

The tokenized borrow positions used throughout the Nexus protocol. Most of the standard EIP-20/ERC20 methods are disabled since debt tokens are non-transferrable.

Implements a variable debt token to track the borrowing positions of users at variable rate mode.

transfer and approve functionalities are disabled as variable debt tokens are non-transferable.

The vToken value is pegged 1:1 to the value of underlying borrowed asset and represents the current total amount owed to the protocol i.e. principal debt + interest accrued.

The VariableDebtToken contract inherits the DebtTokenBase and ScaledBalanceTokenBase token contracts.

The source code is available on GitHub.

Write Methods

initialize

function initialize(
    IPool initializingPool,
    address underlyingAsset,
    IAaveIncentivesController incentivesController,
    uint8 debtTokenDecimals,
    string memory debtTokenName,
    string memory debtTokenSymbol,
    bytes calldata params
) external virtual

Called when variableDebtToken instance is initialised.

Input Parameters:

Name	Type	Description
initializingPool	IPool	The pool contract that is initializing this contract
underlyingAsset	address	The address of the underlying asset of this zToken (E.g. WETH for zWETH)
incentivesController	IAaveIncentivesController	The smart contract managing potential incentives distribution
debtTokenDecimals	uint8	The decimals of the variableDebtToken, same as the underlying asset's
debtTokenName	string	The name of the variable debt token
debtTokenSymbol	string	The symbol of the variable debt token
params	bytes	A set of encoded parameters for additional initialization

mint

function mint(
    address user,
    address onBehalfOf,
    uint256 amount,
    uint256 index
) external virtual override onlyPool returns (bool, uint256)

Mints the variable debt token to the onBehalfOf address.

Input Parameters:

Name	Type	Description
user	address	The address receiving the borrowed underlying, being the delegatee in case of credit delegate, or same as onBehalfOf otherwise
onBehalfOf	address	The address receiving the variable debt tokens
amount	uint256	The amount of variable debt tokens to mint
index	uint256	The variable debt index of the reserve

Return Values:

Type	Description
bool	true if the previous balance of the user is 0, false otherwise
uint256	The scaled total debt of the reserve

burn

function burn(
    address from,
    uint256 amount,
    uint256 index
) external virtual override onlyPool returns (uint256)

Burns user variable debt.

In some instances, a burn transaction will emit a mint event if the amount to burn is less than the interest that the user accrued.

Input Parameters:

Name	Type	Description
from	address	The address from which the debt will be burned
amount	uint256	The amount of debt tokens that will be burned
index	uint256	The variable debt index of the reserve

Return Values:

Type	Description
uint256	The scaled total debt of the reserve

View Methods

UNDERLYING_ASSET_ADDRESS

function UNDERLYING_ASSET_ADDRESS() external view override returns (address)

Returns the address of the underlying asset of this variableDebtToken (e.g. WETH for variableDebtWETH)

Return Values:

Type	Description
address	The address of the underlying asset

balanceOf

function balanceOf(address account) public view virtual override returns (uint256)

Returns the amount of tokens owned by account - the most up to date accumulated debt (principal + interest) of the user.

Standard ERC20 function.

Input Parameters:

Name	Type	Description
account	address	The balance of this address

Return Values:

Type	Description
uint256	The amount of tokens owned by account

totalSupply

function totalSupply() public view virtual override returns (uint256)

Returns the amount of tokens in existence - the most up to date total debt accrued by all protocol users for that specific variable rate of debt token.

Standard ERC20 function.

Return Values:

Type	Description
uint256	The amount of tokens in existence

Pure Methods

getRevision

function getRevision() internal pure virtual override returns (uint256)

Returns the revision number of the contract. Needs to be defined in the inherited class as a constant.

Returns 0x1.

Return Values:

Type	Description
uint256	The revision number

NOT SUPPORTED OPERATIONS

Being non-transferrable, the variable debt token does not implement any of the standard ERC20 functions for transfer and allowance.

The following functions below will revert with the error code 80, OPERATION_NOT_SUPPORTED: transfer, allowance, approve, transferFrom, increaseAllowance, decreaseAllowance.