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EVM hooks, implemented as IBC middleware, play a critical role in facilitating cross-chain contract calls that involve token transfers. This capability is particularly crucial for cross-chain swaps, providing a robust mechanism for decentralized trading across different blockchain networks. The key to this functionality is the memo field in the ICS20 and ICS721 transfer packets, as introduced in IBC v3.4.0.

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EVM Contract Execution Format

Before diving into the IBC metadata format, take a look at the hook data format and the fields that need to be set. The EVM MsgCall is defined here and other types are defined here. 
// HookData defines a wrapper for evm execute message
// and async callback.
type HookData struct {
 // Message is an evm execute message which will be executed
 // at `OnRecvPacket` of receiver chain.
 Message evmtypes.MsgCall `json:"message"`

 // AsyncCallback is a callback message which will be executed
 // at `OnTimeoutPacket` and `OnAcknowledgementPacket` of
 // sender chain.
 AsyncCallback *AsyncCallback `json:"async_callback,omitempty"`
}

// AsyncCallback is data wrapper which is required
// when we implement async callback.
type AsyncCallback struct {
 // callback id should be issued from the executor contract
 Id            uint64 `json:"id"`
 ContractAddr  string `json:"contract_addr"`
}

// MsgCall is a message to call an Ethereum contract.
type MsgCall struct {
 // Sender is the actor that signed the messages
 Sender string `protobuf:"bytes,1,opt,name=sender,proto3" json:"sender,omitempty"`
 // ContractAddr is the contract address to be executed.
 // It can be cosmos address or hex encoded address.
 ContractAddr string `protobuf:"bytes,2,opt,name=contract_addr,json=contractAddr,proto3" json:"contract_addr,omitempty"`
 // Hex encoded execution input bytes.
 Input string `protobuf:"bytes,3,opt,name=input,proto3" json:"input,omitempty"`
}
Here is where each of these fields comes from:
  • Sender: The sender of an IBC packet cannot be trusted, as the counter-party chain has full ability to lie about it. This sender must not be confused for a particular user or module address on Initia. So we replace the sender with an account to represent the sender prefixed by the channel and an evm module prefix. This is done by setting the sender to Bech32(Hash(Hash("ibc-evm-hook-intermediary") + channelID/sender)), where the channelId is the channel id on the local chain.
  • ContractAddr: This field should be directly obtained from the ICS-20 packet metadata
  • Input: This field should be directly obtained from the ICS-20 packet metadata.
The constructed EVM call message looks like: 
msg := MsgCall{
 // Sender is the actor that signed the messages
 Sender: "init1-hash-of-channel-and-sender",
 // ContractAddr is the contract address to be executed.
 // It can be cosmos address or hex encoded address.
 ContractAddr: packet.data.memo["evm"]["message"]["contract_addr"],
 // Hex encoded execution input bytes.
 Input: packet.data.memo["evm"]["message"]["input"],
}

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ICS20 packet structure

Given the details above, here is the implied ICS20 packet data structure. ICS20 is JSON native, so we use JSON for the memo format. 
{
  //... other ibc fields that we don't care about
  "data": {
    "denom": "denom on counterparty chain (e.g. uatom)", // will be transformed to the local denom (ibc/...)
    "amount": "1000",
    "sender": "addr on counterparty chain", // will be transformed
    "receiver": "ModuleAddr::ModuleName::FunctionName",
    "memo": {
      "evm": {
        // execute message on receive packet
        "message": {
          "contract_addr": "0x1",
          "input": "hex encoded byte string"
        },
        // optional field to get async callback (ack and timeout)
        "async_callback": {
          "id": 1,
          "contract_addr": "0x1"
        }
      }
    }
  }
}
An ICS20 packet is formatted correctly for evmhooks iff the following all hold:
  • memo is not blank
  • memo is valid JSON
  • memo has at least one key, with value "evm"
  • memo["evm"]["message"] has exactly two entries, "contract_addr" and "input"
  • receiver == "" || receiver == "module_address::module_name::function_name"
An ICS20 packet is considered directed towards evmhooks iff all of the following hold:
  • memo is not blank
  • memo is valid JSON
  • memo has at least one key, with name "evm"
If an ICS20 packet is not directed towards evmhooks, evmhooks doesn’t do anything. If an ICS20 packet is directed towards evmhooks, and is formatted incorrectly, then evmhooks returns an error.

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Execution flow

Pre evm hooks:
  • Ensure the incoming IBC packet is cryptographically valid
  • Ensure the incoming IBC packet is not timed out.
In evm hooks, pre packet execution:
  • Ensure the packet is correctly formatted (as defined above)
  • Edit the receiver to be the hardcoded IBC module account
In evm hooks, post packet execution:
  • Construct evm message as defined before
  • Execute evm message
  • if evm message has error, return ErrAck
  • otherwise continue through middleware

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Async Callback

A contract that sends an IBC transfer, may need to listen for the ACK from that packet. To allow contracts to listen on the ack of specific packets, the framework provides Ack callbacks. The contract that wants to receive ack callbacks must implement two functions.
  • ibc_ack
  • ibc_timeout
interface IIBCAsyncCallback {
    function ibc_ack(uint64 callback_id, bool success) external;
    function ibc_timeout(uint64 callback_id) external;
}
Also when a contract makes an IBC transfer request, it should provide async callback data through memo field.
  • memo['evm']['async_callback']['id']: the async callback id is assigned from the contract. so later it will be passed as argument of ibc_ack and ibc_timeout.
  • memo['evm']['async_callback']['contract_addr']: The address of module which defines the callback function.

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Tutorials

This tutorial will guide you through the process of deploying an EVM contract and calling it from another chain using IBC hooks. We will use IBC hook from Initia chain to call an EVM contract on MiniEVM chain in this example.

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Step 1. Deploy a contract on MiniEVM chain

Write and deploy a simple counter contract to Initia. 
contract Counter is IIBCAsyncCallback {
    uint256 public count;
    event increased(uint256 oldCount, uint256 newCount);
    constructor() payable {}
    function increase() external payable {
        count++;
        emit increased(count - 1, count);
    }
    function ibc_ack(uint64 callback_id, bool success) external {
        if (success) {
            count += callback_id;
        } else {
            count++;
        }
    }
    function ibc_timeout(uint64 callback_id) external {
        count += callback_id;
    }
    function query_cosmos(
        string memory path,
        string memory req
    ) external returns (string memory result) {
        return COSMOS_CONTRACT.query_cosmos(path, req);
    }
}

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Step 2. Update IBC Hook ACL for the Contract

IBC hooks have the power to execute any functions on the counterparty chain and this can be used for phishing easily. So, you need to set the ACL for the contract to prevent unauthorized access. To update MiniEVM ACL, use MsgExecuteMessages in OPchild module. 
const config = {
  authority: 'init10d07y265gmmuvt4z0w9aw880jnsr700j55nka3',
  contractAddress:
    'init1436kxs0w2es6xlqpp9rd35e3d0cjnw4sv8j3a7483sgks29jqwgs9nxzw8',
}

const aclMsg = new MsgUpdateACL(config.authority, config.contractAddress, true)

const msgs = [new MsgExecuteMessages(proposer.key.accAddress, [aclMsg])]
const signedTx = await proposer.createAndSignTx({ msgs })
try {
  const result = await proposer.rest.tx.broadcast(signedTx)
  console.log('Transaction successful:', result)
} catch (error) {
  console.error('Transaction failed:', error)
  throw error
}

curl -X GET "https://rest-evm-1.anvil.asia-southeast.initia.xyz/initia/ibchooks/v1/acls" -H "accept: application/json"
Response: 
{
  "acls": [
    {
      "address": "init10lfct45epqj8gdh5nh32rtlkgwxhts7qd9z5v5",
      "allowed": true
    }
  ],
  "pagination": {
    "next_key": null,
    "total": "1"
  }
}

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Step 3. Execute IBC Hooks Message

After the contract is deployed and the ACL is set, we can execute the IBC hooks message to call the contract. 
import {
  Coin,
  Height,
  RESTClient,
  MnemonicKey,
  MsgTransfer,
  Wallet,
} from '@initia/initia.js'
import { ethers } from 'ethers'
import * as fs from 'fs'

function createHook(params: object) {
  const hook = { evm: { message: params } }
  return JSON.stringify(hook)
}

async function main() {
  const restClient = new RESTClient('https://rest.testnet.initia.xyz', {
    gasAdjustment: '1.75',
    gasPrices: '0.015uinit',
  })

  const sender = new Wallet(
    restClient,
    new MnemonicKey({
      mnemonic: '<your-mnemonic-here>',
    }),
  )

  const amount = '1000'

  const contractInfo = JSON.parse(
    fs.readFileSync('./bin/Counter.json').toString(),
  )
  const abi = contractInfo.abi

  const contractAddress = '0x4cb5cE12e3bB85348791A3cDd4dc3A5b7836270e'
  const contract = new ethers.Contract(contractAddress, abi)
  const methodName = 'increase'
  const args: any[] = []

  const encodedData = contract.interface.encodeFunctionData(methodName, args)
  const msgs = [
    new MsgTransfer(
      'transfer',
      'channel-10',
      new Coin('uinit', amount),
      sender.key.accAddress,
      contractAddress,
      new Height(0, 0),
      ((new Date().valueOf() + 100000) * 1000000).toString(),
      createHook({
        contract_addr: contractAddress,
        input: encodedData,
      }),
    ),
  ]

  const signedTx = await sender.createAndSignTx({ msgs })
  await restClient.tx.broadcastSync(signedTx).then((res) => console.log(res))
}

main()