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| 1 | +# Fee Systems Guide: Base Fee Redirect, FeeVault, Native Minting |
| 2 | + |
| 3 | +## Overview |
| 4 | + |
| 5 | +This guide connects three related components that move or manage native token value: |
| 6 | + |
| 7 | +- Base fee redirect: redirects EIP-1559 base fees to a configured sink instead of burning them. |
| 8 | +- FeeVault: a contract that accumulates native tokens and can split and bridge them. |
| 9 | +- Native minting precompile: a privileged mint/burn interface for controlled supply changes. |
| 10 | + |
| 11 | +These components are independent but commonly deployed together. The base fee redirect is a value transfer, not minting. Native minting is explicit supply change and should remain tightly controlled. |
| 12 | + |
| 13 | +## Base Fee Redirect (execution layer) |
| 14 | + |
| 15 | +**Purpose**: Redirect the EIP-1559 base fee to a sink address (EOA or contract) instead of burning it. |
| 16 | + |
| 17 | +**Mechanics**: |
| 18 | + |
| 19 | +- The EVM handler credits `base_fee_per_gas * gas_used` to the configured sink. |
| 20 | +- The redirect only activates at or after `baseFeeRedirectActivationHeight`. |
| 21 | +- If no sink is configured, base fee burns proceed as standard Ethereum behavior. |
| 22 | + |
| 23 | +**Chainspec configuration** (inside `config.evolve`): |
| 24 | + |
| 25 | +```json |
| 26 | +"evolve": { |
| 27 | + "baseFeeSink": "0x00000000000000000000000000000000000000fe", |
| 28 | + "baseFeeRedirectActivationHeight": 0 |
| 29 | +} |
| 30 | +``` |
| 31 | + |
| 32 | +See `docs/adr/ADR-0001-base-fee-redirect.md` for implementation details. |
| 33 | + |
| 34 | +## FeeVault (contract level) |
| 35 | + |
| 36 | +**Purpose**: Accumulate native tokens and split them between a bridge destination and a secondary recipient. |
| 37 | + |
| 38 | +**Mechanics**: |
| 39 | + |
| 40 | +- Receives base fees when `baseFeeSink` is set to the FeeVault address. |
| 41 | +- Anyone can trigger `sendToCelestia` (or equivalent) once the minimum threshold is met. |
| 42 | +- Splits balance by `bridgeShareBps`, sends the bridge share to `HypNativeMinter`, and transfers the remainder to `otherRecipient`. |
| 43 | + |
| 44 | +**Why it pairs with base fee redirect**: the redirect funnels base fees into the FeeVault automatically, turning burned fees into recoverable value for treasury or bridging. |
| 45 | + |
| 46 | +See `docs/contracts/fee_vault.md` for parameters and deployment details. |
| 47 | + |
| 48 | +## Native Token Minting Precompile |
| 49 | + |
| 50 | +**Purpose**: Provide a privileged, auditable way to mint or burn the native token. |
| 51 | + |
| 52 | +**Mechanics**: |
| 53 | + |
| 54 | +- Precompile address: `0x000000000000000000000000000000000000f100`. |
| 55 | +- `mintAdmin` manages the allowlist; both admin and allowlisted accounts can call `mint` and `burn`. |
| 56 | +- Activation is gated by `mintPrecompileActivationHeight`. |
| 57 | +- Setting `mintAdmin` to the zero address disables the precompile. |
| 58 | + |
| 59 | +**Chainspec configuration** (inside `config.evolve`): |
| 60 | + |
| 61 | +```json |
| 62 | +"evolve": { |
| 63 | + "mintAdmin": "0x000000000000000000000000000000000000Ad00", |
| 64 | + "mintPrecompileActivationHeight": 0 |
| 65 | +} |
| 66 | +``` |
| 67 | + |
| 68 | +See `docs/adr/ADR-0002-native-minting-precompile.md` for the full interface and security notes. |
| 69 | + |
| 70 | +## How They Fit Together |
| 71 | + |
| 72 | +1. **Base fee redirect** credits base fees to a sink address instead of burning them. |
| 73 | +2. **FeeVault** can be that sink, so base fees accumulate in a contract with deterministic split logic. |
| 74 | +3. **Native minting** is separate and optional; it is used for controlled supply changes (bootstrapping liquidity, treasury operations), not for redirecting fees. |
| 75 | + |
| 76 | +In other words, base fee redirect and FeeVault are about re-routing existing value, while native minting explicitly changes total supply. Keep those responsibilities separate and limit minting access to minimize systemic risk. |
| 77 | + |
| 78 | +## Suggested Deployment Pattern |
| 79 | + |
| 80 | +- Set `baseFeeSink` to the FeeVault address. |
| 81 | +- Use `AdminProxy` as the `mintAdmin` and FeeVault owner if you need a safe, upgradeable admin. |
| 82 | +- Activate both features at a planned height for existing networks. |
| 83 | + |
| 84 | +References: |
| 85 | + |
| 86 | +- `docs/contracts/admin_proxy.md` |
| 87 | +- `docs/contracts/fee_vault.md` |
| 88 | +- `docs/adr/ADR-0001-base-fee-redirect.md` |
| 89 | +- `docs/adr/ADR-0002-native-minting-precompile.md` |
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