How to set up an AEP fee router

Quick start

You can adopt the AEP Fee Router by using the AEP Router deployment scripts provided in the Orbit SDK

The AEP fee router contract system

This section describes the different fee distribution and router contracts that are available. You can find their source code here.

RewardDistributor

The AEP fee router system relies on configuring an escrow contract as the intended reward address for protocol fee components. This intermediary contract is known as the RewardDistributor.

The RewardDistributor is configured to separate the AEP portion of the fees from fees intended for the chain owner. The RewardDistributor can be permissionlessly called to perform a withdrawal which simultaneously transfers 90% of accrued fees to the chain’s fee collector and 10% of accrued fees to a target address on the parent chain. From here, the chain owner has complete control over their earned fees, and the routing contracts can direct AEP fees to a collecting address for the Arbitrum DAO.

ChildToParentRouter

AEP fees from the RewardDistributor must first be sent to Ethereum before they can be deposited to the DAO-controlled address on Arbitrum One. To facilitate this transfer to Ethereum, AEP fees are sent through a series of contracts known as ChildToParentRouters.

The ChildToParentRouter is configured to withdraw a single token (immutable and specified at deployment) from the child chain to a specific target address on the parent chain: either another ChildToParentRouter or an address controlled by the Arbitrum Foundation on Ethereum.

Deploying your AEP fee router contracts

An Orbit chain is responsible for deploying all ChildToParentRouters necessary for their AEP funds to arrive at the address controlled by the Arbitrum Foundation on Ethereum.

This includes:

• Deploying a ChildToParentRouter on their Orbit chain configured for their gas token and configured to send funds to either:
  • An address controlled by the Arbitrum Foundation on Ethereum (assuming the network is a Layer-2)
  • Another ChildToParentRouter configured to the same gas token and configured to send funds to a successive parent chain (this is the case for a Layer-3 network or higher)
• Deploying a RewardDistributor contract configured to forward 10% of fees to the ChildToParentRouter and 90% to the chain owner’s preferred reward-receiving address.

In the event that a ChildToParentRouter does not connect to the address controlled by the Arbitrum Foundation on Ethereum, an Orbit chain must deploy successive ChildToParentRouter contracts until a connection to such address is established.

Optionally, an Orbit chain can decide to deduct assertion costs by following the instructions in the Deducting Assertion Costs section:

🚨 Layer-3 chains with custom gas tokens with L2-based token contracts cannot send their custom gas tokens to Ethereum. A future version of the AEP Fee Router may allow Orbit chains with L2-based tokens to distribute fees using the routing system.

In the absence of these, please send ETH through the AEP Fee Router to fulfill your AEP license obligations.

Deployment scripts

The Orbit SDK provides a configurable script that allows a chain operator to deploy quickly and set up the AEP fee router contracts.

The script performs the following operations:

1. Obtain the rollup and inbox contract of the chain. These are needed to execute the next steps.
2. Obtain the current fee collectors of the chain: Orbit base fee collector, Orbit surplus fee collector, and Parent chain surplus fee collector.
3. Deploy the ChildToParentRouter contract, configured to send the amounts received to the appropriate target address on the parent chain.
4. Deploy a RewardDistributor contract for each different fee collector account, configured to distribute 90% of the amounts received to the current fee collector, and 10% to the ChildToParentRouter contract deployed in the previous step.
5. Set each of the fee collectors to the RewardDistributor contracts

info

Note that if the same address collects all three fee types, only one RewardDistributor contract will be deployed, which will collect all those fees.

To configure the script, you need to specify the following environment variables:

• ROLLUP_ADDRESS: address of the rollup contract
• CHAIN_OWNER_PRIVATE_KEY: private key of the account with executor privileges in the UpgradeExecutor admin contract for the chain
• ORBIT_CHAIN_ID: chain id of the Orbit chain
• ORBIT_CHAIN_RPC: RPC of the Orbit chain
• PARENT_CHAIN_ID: chain id of the parent chain, which shouldn't be an Arbitrum chain
• PARENT_CHAIN_TARGET_ADDRESS: address on the parent chain where 10% of the revenue will be sent to. Please, contact the Arbitrum Foundation to obtain the specific target address for your chain.

Finally, follow these steps to execute the script (from the examples/setup-aep-fee-router folder):

1. Install dependencies

yarn install

2. Create .env file and add the env vars

cp .env.example .env

3. Run the script

yarn dev