DCIPs/EIPS/eip-5143.md

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---
eip: 5143
title: Slippage Protection for Tokenized Vault
description: An extension of EIP-4626 supporting improved EOA interactions.
author: Hadrien Croubois (@amxx)
discussions-to: https://ethereum-magicians.org/t/eip-5143-slippage-protection-for-tokenized-vaults/9554
status: Stagnant
type: Standards Track
category: ERC
created: 2022-06-09
requires: 20, 4626
---
## Abstract
The following standard extends the [EIP-4626](./eip-4626.md) Tokenized Vault standard with functions dedicated to the safe interaction between EOAs and the vault when price is subject to slippage.
## Motivation
[EIP-4626](./eip-4626.md) security considerations section states that:
> "If implementors intend to support EOA account access directly, they should consider adding an additional function call for deposit/mint/withdraw/redeem with the means to accommodate slippage loss or unexpected deposit/withdrawal limits, since they have no other means to revert the transaction if the exact output amount is not achieved."
Yet, EIP-4626 does not standardize the corresponding function signatures and behaviors. For improved interroperability, and better support by wallets, it is essential that this optional functions are also standardized.
## Specification
This ERC is an extension of EIP-4626. Any contract implementing it MUST also implement EIP-4626.
### Methods
#### deposit
Overloaded version of ERC-4626's `deposit`.
Mints `shares` Vault shares to `receiver` by depositing exactly `assets` of underlying tokens.
MUST emit the `Deposit` event.
MUST support [EIP-20](./eip-20.md) `approve` / `transferFrom` on `asset` as a deposit flow.
MAY support an additional flow in which the underlying tokens are owned by the Vault contract before the `deposit` execution, and are accounted for during `deposit`.
MUST revert if all of `assets` cannot be deposited (due to deposit limit being reached, slippage, the user not approving enough underlying tokens to the Vault contract, etc).
MUST revert if depositing `assets` underlying asset mints less then `minShares` shares.
Note that most implementations will require pre-approval of the Vault with the Vault's underlying `asset` token.
```yaml
- name: deposit
type: function
stateMutability: nonpayable
inputs:
- name: assets
type: uint256
- name: receiver
type: address
- name: minShares
type: uint256
outputs:
- name: shares
type: uint256
```
#### mint
Overloaded version of ERC-4626's `mint`.
Mints exactly `shares` Vault shares to `receiver` by depositing `assets` of underlying tokens.
MUST emit the `Deposit` event.
MUST support ERC-20 `approve` / `transferFrom` on `asset` as a mint flow.
MAY support an additional flow in which the underlying tokens are owned by the Vault contract before the `mint` execution, and are accounted for during `mint`.
MUST revert if all of `shares` cannot be minted (due to deposit limit being reached, slippage, the user not approving enough underlying tokens to the Vault contract, etc).
MUST revert if minting `shares` shares cost more then `maxAssets` underlying tokens.
Note that most implementations will require pre-approval of the Vault with the Vault's underlying `asset` token.
```yaml
- name: mint
type: function
stateMutability: nonpayable
inputs:
- name: shares
type: uint256
- name: receiver
type: address
- name: maxAssets
type: uint256
outputs:
- name: assets
type: uint256
```
#### withdraw
Overloaded version of ERC-4626's `withdraw`.
Burns `shares` from `owner` and sends exactly `assets` of underlying tokens to `receiver`.
MUST emit the `Withdraw` event.
MUST support a withdraw flow where the shares are burned from `owner` directly where `owner` is `msg.sender` or `msg.sender` has ERC-20 approval over the shares of `owner`.
MAY support an additional flow in which the shares are transferred to the Vault contract before the `withdraw` execution, and are accounted for during `withdraw`.
MUST revert if all of `assets` cannot be withdrawn (due to withdrawal limit being reached, slippage, the owner not having enough shares, etc).
MUST revert if withdrawing `assets` underlying tokens requires burning more then `maxShares` shares.
Note that some implementations will require pre-requesting to the Vault before a withdrawal may be performed. Those methods should be performed separately.
```yaml
- name: withdraw
type: function
stateMutability: nonpayable
inputs:
- name: assets
type: uint256
- name: receiver
type: address
- name: owner
type: address
- name: maxShares
type: uint256
outputs:
- name: shares
type: uint256
```
#### redeem
Overloaded version of ERC-4626's `redeem`.
Burns exactly `shares` from `owner` and sends `assets` of underlying tokens to `receiver`.
MUST emit the `Withdraw` event.
MUST support a redeem flow where the shares are burned from `owner` directly where `owner` is `msg.sender` or `msg.sender` has ERC-20 approval over the shares of `owner`.
MAY support an additional flow in which the shares are transferred to the Vault contract before the `redeem` execution, and are accounted for during `redeem`.
MUST revert if all of `shares` cannot be redeemed (due to withdrawal limit being reached, slippage, the owner not having enough shares, etc).
MUST revert if redeeming `shares` shares sends less than `minAssets` underlying tokens to `receiver`.
Note that some implementations will require pre-requesting to the Vault before a withdrawal may be performed. Those methods should be performed separately.
```yaml
- name: redeem
type: function
stateMutability: nonpayable
inputs:
- name: shares
type: uint256
- name: receiver
type: address
- name: owner
type: address
- name: minAssets
type: uint256
outputs:
- name: assets
type: uint256
```
## Rationale
This ERC's functions do not replace ERC-4626 equivalent mechanisms. They are additional (overloaded) methods designed to protect EOAs interacting with the vault.
When smart contracts interact with an ERC-4626 vault, they can preview any operation using the dedicated functions before executing the operation. This can be done
atomically, with no risk of price change. This is not true of EOA, which will preview their operations on a UI, sign a transaction, and have it mined later.
Between the preview and the transaction being executed, the blockchain state might change, resulting in unexpected outcomes. In particular, frontrunning
make EOA's interractons with an ERC-4626 vault possibly risky.
Other projects in the DeFi spaces, such as decentralized exchanges, already include similar mechanisms so a user can request its transaction reverts if the
resulting exchange rate is not considered good enough.
Implementing This ERC on top of an ERC-4626 contract can be done very easily. It just requires calling the corresponding ERC-4626 function and adding a revert
check on the returned value.
### Alternative approaches
This ERC aims at solving the security concerns (describes in the motivation section) at the vault level. For completeness, we have to mention that these issues can also be addressed using a generic ERC-4626 router, similar to how Uniswap V2 & V3 use a router to provide good user workflows on top of the Uniswap pairs. The router approach is possibly more versatile and leaves more room for evolutions (the router can be replaced at any point) but it also leads to more expensive operations because the router needs to take temporary custody of the tokens going into the vault.
## Reference Implementation
Given an existing ERC-4626 implementation
``` solidity
contract ERC5143 is ERC4626 {
function deposit(uint256 assets, address receiver, uint256 minShares) public virtual returns (uint256) {
uint256 shares = deposit(assets, receiver);
require(shares >= minShares, "ERC5143: deposit slippage protection");
return shares;
}
function mint(uint256 shares, address receiver, uint256 maxAssets) public virtual returns (uint256) {
uint256 assets = mint(shares, receiver);
require(assets <= maxAssets, "ERC5143: mint slippage protection");
return assets;
}
function withdraw(uint256 assets, address receiver, address owner, uint256 maxShares) public virtual returns (uint256) {
uint256 shares = withdraw(assets, receiver, owner);
require(shares <= maxShares, "ERC5143: withdraw slippage protection");
return shares;
}
function redeem(uint256 shares, address receiver, address owner, uint256 minAssets) public virtual returns (uint256) {
uint256 assets = redeem(shares, receiver, owner);
require(assets >= minAssets, "ERC5143: redeem slippage protection");
return assets;
}
}
```
## Security Considerations
This ERC addresses one of the security consideration raised by ERC-4626. Other considerations still apply.
## Copyright
Copyright and related rights waived via [CC0](../LICENSE.md).