Arbitrum

Note: This proposal has been corrected. More information here.

Abstract SKY has launched support for USDS and sUSDS tokens on Arbitrum. This proposal requests Arbitrum DAO to register the Sky Custom Gateway contracts in the Router contracts to allow users bridging USDS and sUSDS through the official Arbitrum Bridge UI.

Motivation SKY has formally introduced support for USDS and sUSDS tokens on the Arbitrum network, and Spark is set to soon launch Spark Liquidity Layer and Spark Savings (https://spark.fi). The Spark Liquidity Layer will deploy liquidity on Arbitrum to provide slippage-free liquidity for USDC, USDS, and sUSDS tokens natively through a Peg Stability Module (PSM). Arbitrum users will have access to this through Spark Savings (https://app.spark.fi/), enabling stablecoin holders to earn the Sky Savings Rate.

The Arbitrum Ecosystem’s Router contracts maintain a list of gateways used for bridging various L1/L2 tokens to/from Arbitrum. The Arbitrum Bridge UI relies on the routers for gateway information when bridging tokens. Currently, USDS and sUSDS tokens are routed through the default gateways rather than the Sky Custom Gateways. As a result, the Arbitrum team has disabled bridging USDS and sUSDS through the Arbitrum Bridge, creating a suboptimal UX. This means that users will have access to USDS and sUSDS on Arbitrum, and Spark will deploy liquidity there, however, they won’t be able to use the Arbitrum Bridge UI to transfer USDS and sUSDS to Arbitrum.

Rationale This proposal seeks to update the Router configuration to utilize the Sky Custom Gateways for USDS and sUSDS tokens that are live on Arbitrum, ensuring users receive the official token versions when they use the Router contracts through the Arbitrum Bridge UI.

Sky Custom Gateway The Sky Custom L1 Gateway on Arbitrum currently bridges USDS and sUSDS tokens from Ethereum to Arbitrum. Sky Custom Gateways are designed to enable Sky governance to extend support to new Sky ecosystem tokens in the future and also perform essential maintenance operations, such as bridge or token upgrades. Additionally, the Sky Custom L1 Gateway leverages a pre-deployed Escrow contract, which is also used by the DAI token, one of the first tokens bridged to Arbitrum.

Key terms USDS – Stablecoin

sUSDS – Savings USDS (Stablecoin + Yield)

Specifications Current Status The Sky Custom Bridge, along with USDS and sUSDS tokens, is currently live on Arbitrum and available for end-user access. Additionally, Spark is set to deploy significant stablecoins liquidity (USDC, USDS and sUSDS) through the Spark Liquidity Layer and will launch Spark Savings, allowing Arbitrum stablecoin holders to access the Sky Saving Rate (available at https://app.spark.fi/)

USDS address on Ethereum - https://etherscan.io/address/0xdC035D45d973E3EC169d2276DDab16f1e407384F sUSDS address on Ethereum - https://etherscan.io/address/0xa3931d71877C0E7a3148CB7Eb4463524FEc27fbD Sky Custom Gateway on Ethereum - https://etherscan.io/address/0x84b9700e28b23f873b82c1beb23d86c091b6079e Sky Custom Gateway on Arbitrum - https://arbiscan.io/address/0x13f7f24ca959359a4d710d32c715d4bce273c793 Official USDS address on Arbitrum - https://arbiscan.io/token/0x6491c05a82219b8d1479057361ff1654749b876b Official sUSDS address on Arbitrum - https://arbiscan.io/token/0xdDb46999F8891663a8F2828d25298f70416d7610 The code for the Sky custom gateways been audited by ChainSecurity and Cantina, more details can be found on the following links https://github.com/makerdao/arbitrum-token-bridge/blob/master/audit/20241009-ChainSecurity_MakerDAO_Arbitrum_Token_Bridge_audit.pdf https://github.com/makerdao/arbitrum-token-bridge/blob/master/audit/20241023-cantina-report-maker-arbitrum-token-bridge.pdf

Additionally, Certora was used to formally verify the code, all the formal verification specifications can be found here https://github.com/makerdao/arbitrum-token-bridge/tree/master/certora

Sky Ecosystem maintains a set of general emergency response procedures to handle urgent situations like exploits. While this document isn’t gateway-specific, you can view the Sky Atlas Emergency Response System, maintained by Powerhouse, here: https://sky-atlas.powerhouse.io/A.1.8_Emergency_Response_System/a1c2d773-f5f9-4e17-9da4-edd82ea4140b%7C0db3

**Deployment Details **We propose the execution of the setGateways method [1] on the L1GatewayRouter contract [2] on Ethereum for both USDS and sUSDS tokens. This action will register the official USDS and sUSDS tokens along with the Sky Custom Gateway contracts on the Router. Upon approval, the Sky team will collaborate with Offchain Labs to develop and submit an executable proposal for a DAO vote.

[1] https://github.com/OffchainLabs/token-bridge-contracts/blob/5bdf33259d2d9ae52ddc69bc5a9cbc558c4c40c7/contracts/tokenbridge/ethereum/gateway/L1GatewayRouter.sol#L208

[2] https://etherscan.io/address/0x72Ce9c846789fdB6fC1f34aC4AD25Dd9ef7031ef

**Overall Costs **There are no direct additional costs associated with this proposal. However it requires technical work being done by Offchain Labs and the Sky team. Both entities are aware of this proposal and ready to execute it.