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According to the Ethereum Protocol Developer Conference on January 16, 2025, if there are no major vulnerabilities, the Ethereum Pectra upgrade will be launched on the Ethereum main network from early to mid-March 2025.The upgrade involves the implementation of a number of Ethereum Improvement Proposals (EIPs), including a series of proposals for validator operations and mainnet performance improvements.Among them, EIP-3764 has attracted a lot of attention as one of them.
About EIP-3764
EIP-3764 is a standard in the Ethereum Improvement Proposal, which proposes to wrap Ethereum native tokens (ETH) into a new token format (i.e. Wrapped ETH or similar) to improve the efficiency of on-chain interactions., reduces Gas costs and provides greater flexibility for complex interactions in specific scenarios.
△ Image source: The Block
EIP-3764 Mainly solved problems
Currently, DeFi protocols have poor interoperability in handling position management such as lending, staking, or providing liquidity.EIP-3764 proposed, can be passed“Wrapped Position Tokens, WPTs)Abstract positions into a unified token form, thereby achieving standardization and enhancing compatibility between protocols.Therefore, EIP-3764 will play a role in the following current problems, proposing improvements:
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Gas is expensive.In DeFi, many operations (such as deposits, staking, and transactions) require native tokens and smart contract interactions.This usually involves multi-step operations and is costly to the gas.
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Poor compatibility.Current packaging native tokens (such as WETH) have different interfaces, resulting in additional development and adjustments in integration between protocols, increasing complexity and time costs.
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Inadequate user experience.When users interact with complex DeFi protocols, they need to understand the specific mechanisms of each protocol.Interactions on the chain require frequent signatures and multiple approvals, and the process is complex.The different ways of computing revenue of different protocols make it difficult for users to compare.
How to implement EIP-3764?
Core mechanism:EIP-3764 proposes to implement a new smart contract standard, introduce the Wrapped Position Token standard “packaged native token” to support users to convert ETH into packaged tokens and redeem native ETH when needed.
Packaging native tokens (Wrapped Position Tokens, WPTs)
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Abstracting complex positions into a tradable ERC-4626 Token, users only need to interact with the token without caring about the specific details of the underlying protocol.
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Standardized tokens can be traded freely, thereby enhancing liquidity; at the same time, it can also support more DeFi portfolio innovations, such as being collateral, participating in aggregate income agreements, etc., to improve composability capabilities.
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Through standardized revenue tracking interfaces, a more transparent and verifiable revenue management method is provided, which facilitates users to perform unified revenue calculation and tracking.
1. Generation of packaging tokens:
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The user deposits ETH into the EIP-3764 contract.
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Contract casting packaging tokens of equivalent value, returned to the user.
2. Redemption of packaging token:
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The user will send the token back to the contract.
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The contract destroys these tokens and releases native ETH of equivalent value.
Standardized interface:EIP-3764 defines a standardized set of functions and events for the management of wrapping the token, for example:
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deposit: Save ETH and generate wrapper token.
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withdraw: destroy the packaging token and extract the ETH.
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Event Notification: Packaging and redemption operations trigger standard events.
Up to now, although EIP-3764 is still in the proposal stage and has not been officially implemented on the Ethereum main network, it can be seen that this proposal will contribute to the long-term development of the DeFi and blockchain ecosystem, especially in high-frequency interactions and complex operations.In the scenario, it is of great significance.
