Chaindrop

Given the success and popularity of custom native token chains like Degen and Ham, and our collaboration with /ethxy, we've been getting a lot of questions about about how chains using custom native tokens work. Understanding the operational implications and the numerous nuances is difficult and requires a lot of research... so we thought we'd save you the work.

With that in mind, let's look at:

	1.	Why you might use a custom native token
	2.	How custom native tokens work
	3.	How rollups support them and what they require
	4.	Differences in how they are implemented by rollups

Without further ado...

Curious about how custom gas tokens work for OP Stack and Arbitrum Orbit rollups? 🤔

We've covered the basics in our previous post. Now, let's dive into some advanced questions we've received about their operation and practical considerations! 👇

co-founder @chaindrop § software engineer § privacy wonk § music head § theoretical memeticist

On chains that use custom gas tokens, fees are collected in the custom token itself, while rollup costs are still paid in ETH. This means you have two balances to manage: your custom token and ETH. 🪙↔️

There's no automatic conversion or direct tracking for custom gas token pricing relative to ETH. 🔄💰

Both Arbitrum Orbit and OP Stack provide support for custom gas tokens via similar fundamental mechanics. This means that while neither has an automated solution, both allow setting gas fees via contracts, enabling some basic automation. ⚙️

Currently, no existing solutions automate updates to peg gas fees in custom gas tokens to ETH’s value. 🛠️

As always, feel free to hit us up with any further questions below! We're happy to help you navigate the complexities of running your own rollup. 🚀

A proper solution for automating custom gas token fees requires an off-chain Oracle to track the value ratio between the custom token and ETH. Another contract can then read this ratio and set the gas fees accordingly. 📈

Direct support from OP Stack and Arbitrum Orbit for reading gas fees via external calls would reduce the necessary contract writes significantly. However, implementing this support requires careful consideration of external calls to custom contracts, so it's uncertain if we'll see this in the near future. 🤔

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