Single token representation

Overview

Single Token Representation is a key design in Cosmos EVM that removes the complexity and risks of traditional token wrapping. Instead of creating wrapped tokens with separate balances, Cosmos EVM provides multiple interfaces (native Cosmos operations, ERC20 contracts, and bank queries) all pointing to the same underlying token balance stored in the Cosmos SDK bank module.

Core Principle: One token, multiple interfaces, one source of truth.

The Problem with Traditional Wrapping

Wrapping tokens requires extra steps and introduces risks:

Example: Ethereum’s WETH contract:

contract WETH {
    mapping(address => uint256) private _balances;

    function deposit() external payable {
        _balances[msg.sender] += msg.value;
    }

    function withdraw(uint256 amount) external {
        _balances[msg.sender] -= amount;
        payable(msg.sender).transfer(amount);
    }
}

Issues:

• Liquidity fragmentation (ETH and WETH pools separate)
• Smart contract risk (vulnerabilities or malicious upgrades)
• User complexity (manual wrap/unwrap required)
• Additional gas costs for wrap/unwrap operations

The Solution: Single Token Representation

Cosmos EVM stores token balances only once (in the bank module), providing:

• Single Balance: All token amounts in the bank module
• Multiple Interfaces: ERC20 precompiles, native operations, and queries access the same balance
• Automatic Sync: All interfaces reflect the same state without conversion
• No Wrapping Needed: Eliminates manual wrap/unwrap transactions

Real-World Example (JavaScript)

const userAddress = "0x742d35cc6644c068532fddb11B4C36A58D6D3eAb";

// Query native bank balance
const bankBalance = await bankContract.balances(userAddress);
console.log(bankBalance); // [{contractAddress: "0x...", amount: "100000000"}]

// Query ERC20 balance (WATOM)
const watomBalance = await watomContract.balanceOf(userAddress);
console.log(watomBalance); // "100000000"

// Transfer 30 tokens via ERC20 interface
await watomContract.transfer(recipient, "30000000");

// Check updated balances - both show 70 tokens
console.log(await bankContract.balances(userAddress));
console.log(await watomContract.balanceOf(userAddress));

// Native Cosmos operations also reflect changes automatically
// e.g. cosmos tx bank send cosmos1... cosmos1... 20uatom

Benefits

1. Unified Liquidity

   • No fragmented token pools
   • DeFi protocols use the same liquidity regardless of interface

2. Reduced Smart Contract Risk

   • No wrapping contracts to exploit
   • Bank module is well-tested and secure

3. Simplified User Experience

   • No manual wrapping/unwrapping
   • Seamless Cosmos and EVM integration

4. Performance & Cost Efficiency

   • No extra gas for wrapping operations
   • Direct access to optimized bank module

5. Developer Friendly

   • Use standard ERC20 interfaces without wrapping logic
   • Compatible with existing EVM tooling

Implementation Examples

Solidity Liquidity Pool Integration

contract LiquidityPool {
    IERC20 public token;

    function addLiquidity(uint256 amount) external {
        token.transferFrom(msg.sender, address(this), amount);
        // No wrapping needed, all operate on the same underlying token
    }
}

Cross-Ecosystem Operations (JavaScript)

async function demonstrateUnification() {
    await execCmd("cosmos tx bank send cosmos1abc... cosmos1def... 100uatom");

    await watomContract.approve(dexContract.address, "50000000");
    await dexContract.swap(watomContract.address, "50000000");

    await execCmd("cosmos tx staking delegate cosmosvaloper1... 25uatom");
}

Comparison

Aspect	Traditional Wrapping	Single Token Representation
Liquidity	Fragmented	Unified
Smart Contract Risk	High	Minimal (bank module only)
User Complexity	High (manual wrap/unwrap)	Low (automatic)
Gas Overhead	High	Low
State Management	Dual balances	Single source of truth
Developer Experience	Must handle wrapping	Standard ERC20 interface
Interoperability	Manual bridges	Native cross-ecosystem

Related Technologies

• WERC20 Precompile: Implements single token representation for native tokens. See WERC20 docs.
• ERC20 Module: Manages token pairs and infrastructure. See ERC20 module docs.
• Bank Precompile: Provides direct access to native token balances. See Bank precompile docs.

Future Implications

• Cross-chain DeFi without liquidity fragmentation
• Easier multi-chain onboarding
• Native interoperability without complex bridges
• Unified developer experience across blockchain ecosystems

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