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The Wasm hook is an IBC middleware which is used to allow ICS20 token transfers to initiate contract calls. This allows cross-chain contract calls, that involve token movement. This is useful for a variety of use cases. One of primary importance is cross-chain swaps, which is an extremely powerful primitive. The mechanism enabling this is a memo field on every ICS20 or ICS721 transfer packet as of IBC v3.4.0. Wasm hooks is an IBC middleware that parses an ICS20 transfer, and if the memo field is of a particular form, executes a wasm contract call. This section details the memo format for wasm contract calls, and the execution guarantees provided.

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Cosmwasm Contract Execution Format

Before diving into the IBC metadata format, here is the CosmWasm execute message format, showing the fields that need to be set. The CosmWasm MsgExecuteContract is defined here as the following type: 
// HookData defines a wrapper for wasm execute message
// and async callback.
type HookData struct {
 // Message is a wasm execute message which will be executed
 // at `OnRecvPacket` of receiver chain.
 Message *wasmtypes.MsgExecuteContract `json:"message,omitempty"`

 // AsyncCallback is a contract address
 AsyncCallback string `json:"async_callback,omitempty"`
}

type MsgExecuteContract struct {
 // Sender is the actor that committed the message in the sender chain
 Sender string
 // Contract is the address of the smart contract
 Contract string
 // Msg json encoded message to be passed to the contract
 Msg RawContractMessage
 // Funds coins that are transferred to the contract on execution
 Funds sdk.Coins
}
Here is where each of these fields comes from:
  • Sender: The sender of an IBC packet cannot be trusted, as the counterparty chain has full ability to lie about it. This sender must not be confused for a particular user or module address on Initia. So the sender is replaced with an account to represent the sender prefixed by the channel and a wasm module prefix. This is done by setting the sender to Bech32(Hash(“ibc-wasm-hook-intermediary” || channelID || sender)), where the channelId is the channel id on the local chain.
  • Contract: This field should be directly obtained from the ICS-20 packet metadata
  • Msg: This field should be directly obtained from the ICS-20 packet metadata.
  • Funds: This field is set to the amount of funds being sent over in the ICS 20 packet. One detail is that the denom in the packet is the counterparty chain’s representation of the denom, so it must be translated to Initia’s representation.
Due to a bug in the packet forward middleware, the sender from chains that use PFM cannot be trusted. Until that is fixed, chains should not trust the sender on contracts executed via IBC hooks.
msg := MsgExecuteContract{
  // Sender is the actor that signed the messages
 Sender: "init1-hash-of-channel-and-sender",
 // Contract is the address of the smart contract
 Contract: packet.data.memo["wasm"]["contract"],
 // Msg json encoded message to be passed to the contract
 Msg: packet.data.memo["wasm"]["msg"],
 // Funds coins that are transferred to the contract on execution
 Funds: sdk.NewCoin{Denom: ibc.ConvertSenderDenomToLocalDenom(packet.data.Denom), Amount: packet.data.Amount}
}

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ICS20 packet structure

Given the details above, here is the implied ICS20 packet data structure. ICS20 is JSON native, so JSON is used 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": "contract addr or blank",
    "memo": {
      "wasm": {
        "contract": "init1contractAddr",
        "msg": {
          "raw_message_fields": "raw_message_data"
        },
        "funds": [{ "denom": "ibc/denom", "amount": "100" }]
      }
    }
  }
}
An ICS20 packet is formatted correctly for wasmhooks iff the following all hold:
  • memo is not blank
  • memo is valid JSON
  • memo has at least one key, with value "wasm"
  • memo["wasm"]["message"] has exactly three entries, "contract", "msg" and "funds"
  • memo["wasm"]["message"]["msg"] is a valid JSON object
  • receiver == "" || receiver == memo["wasm"]["contract"]
An ICS20 packet is considered directed towards wasmhooks iff all of the following hold:
  • memo is not blank
  • memo is valid JSON
  • memo has at least one key, with name "wasm"
If an ICS20 packet is not directed towards wasmhooks, wasmhooks doesn’t do anything. If an ICS20 packet is directed towards wasmhooks, and is formatted incorrectly, then wasmhooks returns an error.

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Execution flow

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

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Ack callbacks

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.

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Design

The sender of an IBC transfer packet may specify a callback for when the ack of that packet is received in the memo field of the transfer packet. Crucially, only the IBC packet sender can set the callback.

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Use Case

The crosschain swaps implementation sends an IBC transfer. If the transfer were to fail, the sender needs to be able to retrieve their funds (which would otherwise be stuck in the contract). To do this, users can retrieve the funds after the timeout has passed, but without the ack information, there is no guarantee that the send hasn’t failed (i.e.: returned an error ack notifying that the receiving chain didn’t accept it)

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Implementation

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Callback Information in Memo

For the callback to be processed, the transfer packet’s memo should contain the following in its JSON: 
{
  "wasm": {
    "async_callback": "init1contractAddr"
  }
}
When an ack is received, it will notify the specified contract via a sudo message.

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Interface for receiving the Acks and Timeouts

The contract that awaits the callback should implement the following interface for a sudo message: 
#[cw_serde]
pub enum IBCLifecycleComplete {
    #[serde(rename = "ibc_ack")]
    IBCAck {
        /// The source channel (miniwasm side) of the IBC packet
        channel: String,
        /// The sequence number that the packet was sent with
        sequence: u64,
        /// String encoded version of the ack as seen by OnAcknowledgementPacket(..)
        ack: String,
        /// Whether an ack is a success or failure according to the transfer spec
        success: bool,
    },
    #[serde(rename = "ibc_timeout")]
    IBCTimeout {
        /// The source channel (miniwasm side) of the IBC packet
        channel: String,
        /// The sequence number that the packet was sent with
        sequence: u64,
    },
}

/// Message type for `sudo` entry_point
#[cw_serde]
pub enum SudoMsg {
    #[serde(rename = "ibc_lifecycle_complete")]
    IBCLifecycleComplete(IBCLifecycleComplete),
}

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Tutorials

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

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Step 1. Deploy a Wasm contract

// ...
#[entry_point]
pub fn execute(deps: DepsMut, env: Env, info: MessageInfo, msg: ExecuteMsg) -> StdResult<Response> {
    match msg {
        ExecuteMsg::SimpleTransfer { amount, denom, receiver } => simple_transfer(deps, env, info, amount, denom, receiver),
    }
}

pub fn simple_transfer(
    _deps: DepsMut,
    _env: Env,
    _info: MessageInfo,
    amount: u128,
    denom: String,
    receiver: String,
  ) -> StdResult<Response> {
    let mut messages: Vec<CosmosMsg> = vec![];
    messages.push(CosmosMsg::Bank(BankMsg::Send {
        to_address: receiver,
        amount: coins(amount, denom)
    }));

    Ok(Response::new().add_messages(messages))
}
// ...

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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 MiniWasm ACL, use MsgExecuteMessages in OPchild module. 
const aclMsg = new MsgUpdateACL(
  'init10d07y265gmmuvt4z0w9aw880jnsr700j55nka3', // authority
  'init1436kxs0w2es6xlqpp9rd35e3d0cjnw4sv8j3a7483sgks29jqwgs9nxzw8', // contract address
  true, // allow
)

const msgs = [new MsgExecuteMessages(proposer.key.accAddress, [aclMsg])]
const signedTx = await proposer.createAndSignTx({ msgs })
await proposer.rest.tx.broadcast(signedTx).then((res) => console.log(res))

curl -X GET "https://rest-wasm-1.anvil.asia-southeast.initia.xyz/initia/ibchooks/v1/acls" -H "accept: application/json"
Response: 
{
  "acls": [],
  "pagination": {
    "next_key": null,
    "total": "0"
  }
}

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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,
  sha256,
  Wallet,
} from '@initia/initia.js'

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

function ibcDenom(channelId: string, denom: string) {
  const fullTrace = `transfer/${channelId}/${denom}`
  const shaSum = sha256(Buffer.from(fullTrace))
  const hash = Buffer.from(shaSum).toString('hex').toUpperCase()
  return `ibc/${hash}`
}

async function main() {
  const l1RestClient = new RESTClient('https://rest.testnet.initia.xyz', {
    gasAdjustment: '1.75',
    gasPrices: '0.015uinit', // set l1 gas price
  })

  const sender = new Wallet(
    l1RestClient,
    new MnemonicKey({
      mnemonic: 'power elder gather acoustic ...',
    }),
  )

  const recipientAddress = 'init1wgl839zxdh5c89mvc4ps97wyx6ejjygxs4qmcx'
  const tokenPair = await l1RestClient.ophost.tokenPairByL1Denom(1457, 'uinit') // { l1_denom: 'uinit', l2_denom: 'l2/8b3e1fc559b327a35335e3f26ff657eaee5ff8486ccd3c1bc59007a93cf23156' }
  const denom = ibcDenom('channel-0', tokenPair.l1_denom) // use IBC channel on MiniWasm side
  const amount = '1000'

  const msgs = [
    new MsgTransfer(
      'transfer',
      'channel-2',
      new Coin(tokenPair.l1_denom, amount),
      sender.key.accAddress,
      'init1436kxs0w2es6xlqpp9rd35e3d0cjnw4sv8j3a7483sgks29jqwgs9nxzw8', // IBC hook receiver = `ModuleAddress::ModuleName::FunctionName`
      new Height(0, 0),
      ((new Date().valueOf() + 100000) * 1000000).toString(),
      createHook({
        contract:
          'init1436kxs0w2es6xlqpp9rd35e3d0cjnw4sv8j3a7483sgks29jqwgs9nxzw8',
        msg: {
          simple_transfer: {
            amount: Number(amount),
            denom: denom,
            receiver: recipientAddress,
          },
        },
        funds: [{ denom: denom, amount: amount }],
      }),
    ),
  ]

  const signedTx = await sender.createAndSignTx({ msgs })
  await l1RestClient.tx.broadcastSync(signedTx).then((res) => console.log(res))
}

main()