Build a token contract

This tutorial illustrates how you can build an ERC-20 token contract using the ink! language. The ERC-20 specification defines a common standard for fungible tokens. Having a standard for the properties that define a token enables developers who follow the specification to build applications that can interoperate with other products and services.

The ERC-20 token standard is not the only token standard, but it is one of the most commonly used.

Before you begin

Before you begin, verify the following:

  • You are generally familiar with smart contracts, tokens, and cryptocurrency concepts and terminology.
  • You have installed Rust and set up your development environment as described in Install.
  • You have completed Prepare your first contract and have the Substrate contracts node installed locally.
  • You have completed Develop a smart contract and are familiar with how ink! uses Rust attribute macros to build smart contracts.

Tutorial objectives

By completing this tutorial, you will accomplish the following objectives:

  • Learn the basic properties and interfaces defined in the ERC-20 standard.
  • Create tokens that adhere to the ERC-20 standard.
  • Transfer tokens between contracts.
  • Handle routing of transfer activity involving approvals or third-parties.
  • Create events related to token activity.

Basics of the ERC-20 standard

The ERC-20 token standard defines the interface for most of the smart contracts that run on the Ethereum blockchain. These standard interfaces allow individuals to deploy their own cryptocurrency on top of an existing smart contract platform.

If you review the standard, you'll notice the following core functions are defined.

// ----------------------------------------------------------------------------
// ERC Token Standard #20 Interface
// https://github.com/ethereum/EIPs/blob/master/EIPS/eip-20.md
// ----------------------------------------------------------------------------

contract ERC20Interface {
    // Storage Getters
    function totalSupply() public view returns (uint);
    function balanceOf(address tokenOwner) public view returns (uint balance);
    function allowance(address tokenOwner, address spender) public view returns (uint remaining);

    // Public Functions
    function transfer(address to, uint tokens) public returns (bool success);
    function approve(address spender, uint tokens) public returns (bool success);
    function transferFrom(address from, address to, uint tokens) public returns (bool success);

    // Contract Events
    event Transfer(address indexed from, address indexed to, uint tokens);
    event Approval(address indexed tokenOwner, address indexed spender, uint tokens);
}

Users balances are mapped to account addresses and the interfaces allow users to transfer tokens that they own or allow a third party to transfer tokens on their behalf. Most importantly, the smart contract logic must be implemented to ensure that funds are not unintentionally created or destroyed, and that a user's funds are protected from malicious actors.

Note that all of the public functions return a bool that only indicates whether the call was successful or not. In Rust, these functions would typically return a Result.

Create the token supply

A smart contract for handling ERC-20 tokens is similar to the Incrementer contract that used maps to store values in Use maps for storing values. For this tutorial, the ERC-20 contract consists of a fixed supply of tokens that are all deposited into the account associated with the contract owner when the contract is deployed. The contract owner can then distribute the tokens to other users.

The simple ERC-20 contract you create in this tutorial does not represent the only way you can mint and distribute tokens. However, this ERC-20 contract provides a good foundation for extending what you've learned in other tutorials and how to use the ink! language for building more robust smart contracts.

For the ERC-20 token contract, the initial storage consists of:

  • total_supply representing the total supply of tokens in the contract.
  • balances representing the individual balance of each account.

To get started, lets create a new project with some template code.

To build an ERC-20 token smart contract:

  1. Open a terminal shell on your local computer, if you don’t already have one open.
  2. Create a new project named erc20 by running the following command:

    cargo contract new erc20
  3. Change to the new project directory by running the following command:

    cd erc20/
  4. Open the lib.rs file in a text editor.
  5. Replace the default template source code with new erc20 source code.
  6. Save the changes to the lib.rs file, then close the file.
  7. Open the Cargo.toml file in a text editor and review the dependencies for the contract.
  8. In the [dependencies] section, modify the scale and scale-info settings, if necessary.

    scale = { package = "parity-scale-codec", version = "3", default-features = false, features = ["derive"] }
    scale-info = { version = "2", default-features = false, features = ["derive"], optional = true }
  9. Save changes to the Cargo.toml file, then close the file.
  10. Verify that the program compiles and passes the trivial test by running the following command

    cargo +nightly test

    The command should display output similar to the following to indicate successful test completion:

    running 2 tests
    test erc20::tests::new_works ... ok
    test erc20::tests::balance_works ... ok
    
    test result: ok. 2 passed; 0 failed; 0 ignored; 0 measured; 0 filtered out; finished in 0.00s
  11. Verify that you can build the WebAssembly for the contract by running the following command:

    cargo +nightly contract build

    If the program compiles successfully, you are ready to upload it in its current state or start adding functionality to the contract.

Upload and instantiate the contract

If you want to test what you have so far, you can upload the contract using the Contracts UI.

To test the ERC-20 contract before adding new functions:

  1. Start the local contract node.
  2. Upload the erc20.contract file.
  3. Specify an initial supply of tokens for the new constructor.
  4. Instantiate the contract on the running local node.
  5. Select totalSupply as the Message to Send, then click Read to verify that the total supply of tokens is the same as the initial supply.
  6. Select balanceOf as the Message to Send.
  7. Select the AccountId of the account used to instantiate the contract, then click Read.

    If you select any other AccountId, then click Read, the balance is zero because all of the tokens are owned by the contract owner.

Transfer tokens

At this point, the ERC-20 contract has one user account that owns the total_supply of the tokens for the contract. To make this contract useful, the contract owner must be able to transfer tokens to other accounts.

For this simple ERC-20 contract, you are going to add a public transfer function that enables you—as the contract caller—to transfer tokens that you own to another user.

The public transfer function calls a private transfer_from_to() function. Because this is an internal function, it can be called without any authorization checks. However, the logic for the transfer must be able to determine whether the from account has tokens available to transfer to the receiving to account. The transfer_from_to() function uses the contract caller (self.env().caller()) as the from account. With this context, the transfer_from_to() function then does the following:

  • Gets the current balance of the from and to accounts.
  • Checks that the from balance is less than the value number of tokens to be sent.

    let from_balance = self.balance_of(from);
    if from_balance < value {
    return Err(Error::InsufficientBalance)
    }
  • Subtracts the value from transferring account and adds the value to the receiving account.

    self.balances.insert(from, &(from_balance - value));
    let to_balance = self.balance_of(to);
    self.balances.insert(to, &(to_balance + value));

To add the transfer functions to the smart contract:

  1. Open a terminal shell on your local computer, if you don’t already have one open.
  2. Verify your are in the erc20 project directory.
  3. Open lib.rs in a text editor.
  4. Add an Error declaration to return an error if there aren't enough tokens in an account to complete a transfer.

    /// Specify ERC-20 error type.
    #[derive(Debug, PartialEq, Eq, scale::Encode, scale::Decode)]
    #[cfg_attr(feature = "std", derive(scale_info::TypeInfo))]
    pub enum Error {
    /// Return if the balance cannot fulfill a request.
       InsufficientBalance,
    }
  5. Add an Result return type to return the InsufficientBalance error.

    /// Specify the ERC-20 result type.
    pub type Result<T> = core::result::Result<T, Error>;
  6. Add the transfer() public function to enable the contract caller to transfer tokens to another account.

    #[ink(message)]
    pub fn transfer(&mut self, to: AccountId, value: Balance) -> Result<()> {
       let from = self.env().caller();
       self.transfer_from_to(&from, &to, value)
    }
  7. Add the transfer_from_to() private function to transfer tokens from account associated with the contract caller to a receiving account.

    fn transfer_from_to(
       &mut self,
       from: &AccountId,
       to: &AccountId,
       value: Balance,
    ) -> Result<()> {
        let from_balance = self.balance_of_impl(from);
        if from_balance < value {
            return Err(Error::InsufficientBalance)
        }
    
        self.balances.insert(from, &(from_balance - value));
        let to_balance = self.balance_of_impl(to);
        self.balances.insert(to, &(to_balance + value));
        Ok(())
    }

    This code snippet uses the balance_of_impl() function. The balance_of_impl() function is the same as the balance_of function except that it uses references to look up the account balances in a more efficient way in WebAssembly. Add the following function to the smart contract to use this function:

    #[inline]
    fn balance_of_impl(&self, owner: &AccountId) -> Balance {
       self.balances.get(owner).unwrap_or_default()
    }
  8. Verify that the program compiles and passes the test cases by running the following command:

    cargo +nightly test

    The command should display output similar to the following to indicate successful test completion:

    running 3 tests
    test erc20::tests::new_works ... ok
    test erc20::tests::balance_works ... ok
    test erc20::tests::transfer_works ... ok
    
    test result: ok. 3 passed; 0 failed; 0 ignored; 0 measured; 0 filtered out; finished in 0.00s

Create events

The ERC-20 token standard specifies that contract calls cannot directly return a value when submitting a transaction. However, you might want your smart contract to signal in some way that an event has occurred. For example, you might want your smart contract to indicate when a transaction was made or that a transfer was approved. You can use events to send these kinds of signals.

You can use events to communicate any kind of data. Defining the data for an event is similar to defining a struct. Events should be declared using the #[ink(event)] attribute.

Add a transfer event

For this tutorial, you'll declare a Transfer event to provide information about completed transfer operations. The Transfer event contains the following information:

  • A value of type Balance.
  • An Option-wrapped AccountId variable for the from account.
  • An Option-wrapped AccountId variable for the to account.

For faster access to the event data they can have indexed fields. You can do this by using the #[ink(topic)] attribute tag on that field.

To add the Transfer event:

  1. Open the lib.rs file in a text editor.
  2. Declare the event using the #[ink(event)] attribute macro.

    #[ink(event)]
    pub struct Transfer {
       #[ink(topic)]
       from: Option<AccountId>,
       #[ink(topic)]
       to: Option<AccountId>,
       value: Balance,
     }

You can retrieve data for an Option<T> variable is using the .unwrap_or() function

Emit the event

Now that you have declared the event and defined the information the event contains, you need to add the code that emits the event. You do this by calling the self.env().emit_event() function with the event name as the sole argument to the call.

In this ERC-20 contract, you want to emit a Transfer event every time that a transfer takes place. There are two places in the code where this occurs:

  • During the new call to initialize the contract.
  • Every time that transfer_from_to is called.

The values for the from and to fields are Option<AccountId> data types. However, during the initial transfer of tokens, the value set for the initial supply doesn't come from any other account. In this case, the Transfer event has a from value of None.

To emit the Transfer event:

  1. Open the lib.rs file in a text editor.
  2. Add the Transfer event to the new_init() function in the new constructor.

    fn new_init(&mut self, initial_supply: Balance) {
       let caller = Self::env().caller();
       self.balances.insert(&caller, &initial_supply);
       self.total_supply = initial_supply;
       Self::env().emit_event(Transfer {
           from: None,
           to: Some(caller),
           value: initial_supply,
       });
    }
  3. Add the Transfer event to the transfer_from_to() function.

    self.balances.insert(from, &(from_balance - value));
    let to_balance = self.balance_of_impl(to);
    self.balances.insert(to, &(to_balance + value));
    self.env().emit_event(Transfer {
       from: Some(from),
       to: Some(to),
       value,
    });

    Notice that value does not need a Some() because the value is not stored in an Option.

  4. Add a test that transfers tokens from one account to another.

    #[ink::test]
    fn transfer_works() {
       let mut erc20 = Erc20::new(100);
       assert_eq!(erc20.balance_of(AccountId::from([0x0; 32])), 0);
       assert_eq!(erc20.transfer(AccountId::from([0x0; 32]), 10), Ok(()));
       assert_eq!(erc20.balance_of(AccountId::from([0x0; 32])), 10);
    }
  5. Verify that the program compiles and passes all tests by running the following command:

    cargo +nightly test

    The command should display output similar to the following to indicate successful test completion:

    running 3 tests
    test erc20::tests::new_works ... ok
    test erc20::tests::balance_works ... ok
    test erc20::tests::transfer_works ... ok
    
    test result: ok. 3 passed; 0 failed; 0 ignored; 0 measured; 0 filtered out; finished in 0.00s

Enable third-party transfers

The ERC-20 token contract can now transfer tokens between accounts and emit events when this happens. As a final step, you can add the approve and transfer_from functions to enable third party transfers.

Enabling one account to spend tokens on behalf of another account allows your smart contract to support decentralized exchanges. Instead of transferring your tokens directly to another user in a contract, you can approve some number of the tokens you own to be traded on your behalf. While you wait for a trade to execute, you can still control and spend your tokens, if needed. You can also approve multiple contracts or users to access your tokens, so if one contract offers the best trade, you don't need to move tokens from one contract to another, which can be a costly and time-consuming process.

To ensure approvals and transfers can be done safely, the ERC-20 token contracts uses a two-step process, with separate approve and transfer From operations.

Add the approval logic

Approving another account to spend your tokens is the first step in the third party transfer process. As a token owner, you can specify any account and any number of tokens that the designated account can transfer on your behalf. You don't have approve all tokens in your account and you can specify a maximum number that an approved account is allowed to transfer.

When you call approve multiple times, you overwrite the previously-approved value with the new value. By default, the approved value between any two accounts is 0. If you want to revoke access to the tokens in your account, you can call the approve function with a value of 0.

To store approvals in the ERC-20 contract, you need to use a slightly more complex Mapping key.

Since each account can have a different amount approved for any other accounts to use, you need to use a tuple as the key that maps to a balance value. For example:

pub struct Erc20 {
 /// Balances that can be transferred by non-owners: (owner, spender) -> allowed
 allowances: ink_storage::Mapping<(AccountId, AccountId), Balance>,
}

The tuple uses (owner, spender) to identify the spender account that is allowed to access tokens on behalf of the owner up to a specified allowance.

To add the approval logic to the smart contract:

  1. Open the lib.rs file in a text editor.
  2. Declare the Approval event using the #[ink(event)] attribute macro.

    #[ink(event)]
    pub struct Approval {
       #[ink(topic)]
       owner: AccountId,
       #[ink(topic)]
       spender: AccountId,
       value: Balance,
    }
  3. Add an Error declaration to return an error if the transfer request exceeds the account allowance.

    #[derive(Debug, PartialEq, Eq, scale::Encode, scale::Decode)]
    #[cfg_attr(feature = "std", derive(scale_info::TypeInfo))]
    pub enum Error {
       InsufficientBalance,
       InsufficientAllowance,
    }
  4. Add the storage mapping for an owner and non-owner combination to an account balance.

    allowances: Mapping<(AccountId, AccountId), Balance>,
  5. Add the approve() function to authorize a spender account to withdraw tokens from the caller's account up to a maximum value.

    #[ink(message)]
    pub fn approve(&mut self, spender: AccountId, value: Balance) -> Result<()> {
       let owner = self.env().caller();
       self.allowances.insert((&owner, &spender), &value);
       self.env().emit_event(Approval {
         owner,
         spender,
         value,
       });
       Ok(())
    }
  6. Add an allowance() function to return the number of tokens a spender is allowed to withdraw from the owner account.

    #[ink(message)]
    pub fn allowance(&self, owner: AccountId, spender: AccountId) -> Balance {
       self.allowance_impl(&owner, &spender)
    }

    This code snippet uses the allowance_impl() function. The allowance_impl() function is the same as the allowance function except that it uses references to look up the token allowance in a more efficient way in WebAssembly. Add the following function to the smart contract to use this function:

    #[inline]
    fn allowance_impl(&self, owner: &AccountId, spender: &AccountId) -> Balance {
       self.allowances.get((owner, spender)).unwrap_or_default()
    }

Add the transfer from logic

Now that you have set up an approval for one account to transfer tokens on behalf of another, you need to create a transfer_from function to enable an approved user to transfer the tokens. The transfer_from function calls the private transfer_from_to function to do most of the transfer logic. There are a few requirements to authorize a non-owner to transfer tokens:

  • The self.env().caller() contract caller must be allocated tokens that are available in the from account.
  • The allocation stored as an allowance must be more than the value to be transferred.

If these requirements are met, the contract inserts the updated allowance into the allowance variable and calls the transfer_from_to() function using the specified from and to accounts.

Remember when calling transfer_from, the self.env().caller() and the from account are used to look up the current allowance, but the transfer_from function is called between the from and to accounts specified.

There are three account variables in play whenever transfer_from is called, and you need to make sure to use them correctly.

To add the transfer_from logic to the smart contract:

  1. Open the lib.rs file in a text editor.
  2. Add the transfer_from() function to transfer the value number of tokens on behalf to the from account to the to account.

    /// Transfers tokens on the behalf of the `from` account to the `to account
    #[ink(message)]
    pub fn transfer_from(
       &mut self,
       from: AccountId,
       to: AccountId,
       value: Balance,
    ) -> Result<()> {
       let caller = self.env().caller();
       let allowance = self.allowance_impl(&from, &caller);
       if allowance < value {
           return Err(Error::InsufficientAllowance)
       }
       self.transfer_from_to(&from, &to, value)?;
       self.allowances
           .insert((&from, &caller), &(allowance - value));
       Ok(())
      }
  3. Add a test for the transfer_from() function.

    #[ink::test]
    fn transfer_from_works() {
       let mut contract = Erc20::new(100);
       assert_eq!(contract.balance_of(AccountId::from([0x1; 32])), 100);
       contract.approve(AccountId::from([0x1; 32]), 20);
       contract.transfer_from(AccountId::from([0x1; 32]), AccountId::from([0x0; 32]), 10);
       assert_eq!(contract.balance_of(AccountId::from([0x0; 32])), 10);
    }
  4. Add a test for the allowance() function.

    #[ink::test]
    fn allowances_works() {
       let mut contract = Erc20::new(100);
       assert_eq!(contract.balance_of(AccountId::from([0x1; 32])), 100);
       contract.approve(AccountId::from([0x1; 32]), 200);
       assert_eq!(contract.allowance(AccountId::from([0x1; 32]), AccountId::from([0x1; 32])), 200);
    
    contract.transfer_from(AccountId::from([0x1; 32]), AccountId::from([0x0; 32]), 50);
    assert_eq!(contract.balance_of(AccountId::from([0x0; 32])), 50);
    assert_eq!(contract.allowance(AccountId::from([0x1; 32]), AccountId::from([0x1; 32])), 150);
    
    contract.transfer_from(AccountId::from([0x1; 32]), AccountId::from([0x0; 32]), 100);
    assert_eq!(contract.balance_of(AccountId::from([0x0; 32])), 50);
    assert_eq!(contract.allowance(AccountId::from([0x1; 32]), AccountId::from([0x1; 32])), 150);
    }
  5. Verify that the program compiles and passes all tests by running the following command:

    cargo +nightly test

    The command should display output similar to the following to indicate successful test completion:

    running 5 tests
    test erc20::tests::new_works ... ok
    test erc20::tests::balance_works ... ok
    test erc20::tests::transfer_works ... ok
    test erc20::tests::transfer_from_works ... ok
    test erc20::tests::allowances_works ... ok
    
    test result: ok. 5 passed; 0 failed; 0 ignored; 0 measured; 0 filtered out; finished in 0.00s
  6. Verify that you can build the WebAssembly for the contract by running the following command

    cargo +nightly contract build

    After you build the WebAssembly for the contract, you can upload and instantiate it using the Contracts UI as described in Upload and instantiate the contract.

Write test cases

In this tutorial, you added simple unit tests to the lib.rs file. The basic test cases illustrate that functions work as expected by giving specifying input values and verifying the result returned. You could improve the quality of the code by writing additional test cases. For example, you might add tests that exercise error handling for invalid input, empty values, or values that are out of expected bounds.

Next steps

In this tutorial, you learned how to write a simple ERC-20 token smart contract using ink! to run on a Substrate blockchain. For example, this tutorial illustrated:

  • How to create a contract with a fixed number of tokens.
  • How to transfer tokens from the contract owner to other accounts.
  • How to add tests to a smart contract.
  • How to enable third-party transfers.

You can find an example of the code for this tutorial in the assets for smart contracts. You can learn more about smart contract development in the following topics: