Crosschain Lending

Overview

This project illustrates a basic use case of the Reactive Network, showcasing a cross-chain lending scenario. The demo involves three contracts, one each for the origin chain(Avalanche), destination chain(Sepolia), and a Reactive Contract that listens for events on both chains and triggers callbacks to facilitate cross-chain interactions. The demo allows users to deposit collateral on the origin chain(Avalanche) to request a loan on the destination chain(Sepolia). The Reactive Contract listens for the CollateralDeposited event on the origin chain(Avalanche) and triggers a callback to the destination chain(Sepolia) to issue the loan amount to the user's address on the destination chain(Sepolia). Users can repay the total loan amount at once or in installments. The Reactive Contract listens for the LoanRepaid event on the destination chain(Sepolia) and triggers a callback to the origin chain(Avalanche) to release the collateral to the user's address on the origin chain(Avalanche).

Features

Collateral Management: Users can deposit collateral on the origin chain(Avalanche) to request a loan on the destination chain(Sepolia). The Reactive Contract listens for the CollateralDeposited event on the origin chain(Avalanche) and triggers a callback to the destination chain(Sepolia) to issue the loan amount to the user's address on the destination chain(Sepolia).
Loan Repayment: Users can repay the total loan amount at once or in installments. The Reactive Contract listens for the LoanRepaid event on the destination chain(Sepolia) and triggers a callback to the origin chain(Avalanche) to release the collateral to the user's address on the origin chain(Avalanche).
Intuitive UI: The demo includes a user-friendly UI to interact with the contracts. Users can connect their wallets, deposit collateral, request loans, repay loans, and track the statuses.
Realtime Updates: The UI updates user balances, collateral and loan amounts in real-time to reflect the latest contract interactions.

Contracts

The demo involves three contracts. Can be found in src/crosschain-lending directory:

CollateralManager(Origin) Contract: CollateralManager.sol This contract allows users to deposit collateral on the origin chain(Avalanche) to request a loan on the destination chain(Sepolia). It emits a CollateralDeposited event when a user deposits collateral. The event contains the user's address and the amount of collateral deposited. The contract also has a releaseCollateral function that releases the collateral to the user's address on the origin chain(Avalanche) when called by authorized callback proxy contract.
CrossLoan Contract(Destination): CrossLoan.sol This Contract issues loan on the destination chain(Sepolia) to the user's address when triggered by the Reactive Contract. It also allows users to repay the total loan amount at once or in installments. The contract emits a LoanRepaid event when a user repays the loan amount. The event contains the user's address and the amount of loan repaid in which triggers a callback to the origin chain(Avalanche) to release the collateral to the user's address on the origin chain(Avalanche).
CrossLoanReactor: CrossLoanReactor.sol is a Reactive Contract that listens for the CollateralDeposited event on the origin chain(Avalanche) and triggers a callback to the destination chain(Sepolia) to issue the loan amount to the user's address on the destination chain(Sepolia). It also listens for the LoanRepaid event on the destination chain(Sepolia) and triggers a callback to the origin chain(Avalanche) to release the collateral to the user's address on the origin chain(Avalanche).

Getting Started

Prerequisites

Node.js
Foundry

To set up foundry environment, run:

curl -L https://foundry.paradigm.xyz | bash
source ~/.bashrc
foundryup

Etherem wallet with Some funds on origin and destination chains

To deploy contracts, follow these steps, making sure you substitute the appropriate keys, addresses, and endpoints where necessary. You will need the following environment variables configured appropriately to follow this script:

ORIGIN_RPC=
DESTINATION_RPC=
REACTIVE_RPC=
PRIVATE_KEY=
ORIGIN_ADDR=
DESTINATION_ADDR=
ORIGIN_CHAINID=
DESTINATION_CHAINID=
SYSTEM_CONTRACT_ADDR=
ORIGIN_CALLBACK_SENDER_ADDR=
DESTINATION_CALLBACK_SENDER_ADDR=

You can use the recommended Sepolia RPC URL: https://rpc2.sepolia.org.

Load the environment variables:

source .env

Compile & Deploy Contracts

This project is scaffolded using Foundry, a smart contract development toolchain. Please refer to the Foundry documentation for more details.

Directory Structure:

├── README.md
├── frontend
├── lib # Foundry library
├── src
│    ├── crosschain-lending # Crosschain lending contracts
│         ├── CollateralManager.sol
│         ├── CrossLoan.sol
│         ├── CrossLoanReactor.sol

Install dependencies and compile the contracts:

forge install

forge compile

Deploy the CollateralManager contract with authorized callback sender on origin(i.e Avalanche) and assign the Deployed to address from the response to ORIGIN_ADDR.

forge create --rpc-url $ORIGIN_RPC --private-key $PRIVATE_KEY src/crosschain-lending/CollateralManager.sol:CollateralManager --constructor-args $ORIGIN_CALLBACK_SENDER_ADDR

Deploy the CrossLoan contract with authorized callback sender on destination(i.e. Sepolia) and assign the Deployed to address from the response to DESTINATION_ADDR.

forge create --rpc-url $DESTINATION_RPC --private-key $PRIVATE_KEY src/crosschain-lending/CrossLoan.sol:CrossLoan --constructor-args $DESTINATION_CALLBACK_SENDER_ADDR

Callback Payment

To ensure a successful callback and issue loans, the callback contract(both origin, destination contracts) must have an ETH balance. You can find more details here. To fund the callback contracts, run the following command:

cast send $ORIGIN_ADDR --rpc-url $ORIGIN_RPC --private-key $PRIVATE_KEY --value 0.005ether

cast send $DESTINATION_ADDR --rpc-url $DESTINATION_RPC --private-key $PRIVATE_KEY --value 0.5ether # More funds required for issuing loans

Deploy Reactive Contract

Deploy the CrossLoanReactor.sol (reactive contract), configuring it to listen to CollateralDeposited event on origin contract and LoanRepaid event on destination contract, Triggering respective callbacks(to either origin or destination contracts).

forge create --rpc-url $REACTIVE_RPC --private-key $PRIVATE_KEY src/crosschain-lending/CrossLoanReactor.sol:CrossLoanReactor --constructor-args $SYSTEM_CONTRACT_ADDR $ORIGIN_ADDR $DESTINATION_ADDR $ORIGIN_CHAINID $DESTINATION_CHAINID

Test the Setup

To test the setup, deposit some collateral on the origin chain(Avalanche).

cast send --rpc-url $ORIGIN_RPC --private-key $PRIVATE_KEY $ORIGIN_ADDR "depositCollateral(uint256)" 5000000000000000

Note: Destination contract should be deployed on Sepolia chain and should have enough funds to issue loans.

This should trigger a callback to the destination chain(Sepolia) to issue loan amount to the caller address on the destination chain.

Deployed Contracts

CollateralManager(Origin): 0xd231fE46b4A8500d4aDD5AD98EC3c4ca56E7dee4
CrossLoan(Destination): 0xAe66deFEfF27a8F82168D999d809E34a002f9627
CrossLoanReactor Contract: 0x9F857f28B81aBDC0c9bFd94eA3CDAB04f893B8Ab
RVM: 0xc7203561EF179333005a9b81215092413aB86aE9

Running the Demo

Copy the frontend/.env.example file to frontend/.env and update the environment variables accordingly. Update contract addresses in frontend/src/utils/constants.js file.

Install dependencies and start the frontend:

cd frontend

npm install

npm run dev

Open your browser and navigate to http://localhost:3000 to view the demo.

Demo

crosslend-demo.mp4