# Reserve Transfer Assets

XCM allows us to transfer assets from one chain to another in several ways. In this chapter we'll see how to use reserve transfers.

Suppose we want Shibuya SBY tokens to be present on Shiden as a wrapped asset wSBY.

• Shibuya chain will need to have Shiden's sovereign account. This account is controlled by Shiden and would represent funds that were sent to the remote chain (Shiden from Shibuya's perspective)
• Shiden should create wSBY asset and configure it to act as a cross-chain asset
• HRMP channels should also be configured for chains to communicate and exchange XCM messages
• To pay for execution time wSBY should be configured as a payment asset on Shiden

During the actual transfer the following happens:

1. Some SBYs are moved from source account to the sovereign account of Shiden on Shibuya
2. An XCM containing ReserveTransferAssets instruction is sent to Shiden
3. That message is processed by the assets pallet on Shiden, the corresponding amount of wSBYs is minted on Shiden
4. Minted wSBY tokens are deposited to the destination account
5. Some amount is deducted as a payment for execution time

Note: Please keep in mind that everything above is just an example specific to the implementation of two particular parachains. XCM does not dictate or impose any restrictions on how to interpret incoming messages, or how to manage derivative assets. Other parachains may or may not use assets pallet and technically the only thing we can say for sure is that assets_reserve_transfer will form an XCM that would be sent to a remote chain specified by its parachain_id. Everything else is dependent on the remote chain and its logic.

# EVM precompile

This functionality is exposed to EVM smart contracts via precompiles. Interface can be found here under the XCM precompiles.

    function assets_reserve_transfer(        address[] calldata asset_id,        uint256[] calldata asset_amount,        bytes32   recipient_account_id,        bool      is_relay,        uint256   parachain_id,        uint256   fee_index    ) external payable returns (bool);
• asset_id is a list of assets to transfer; for transferring native assets see the next section.
• asset_amount - the corresponding amounts of assets
• recipient_account_id - recepient account id on the destination chain (or a relay chain)
• is_relay is true if destination account is on the relay chain
• parachain_id - destination parachain id
• fee_index - which asset from asset_id to use for paying XCM fee

Note: there is another version of assets_reserve_transfer precompile that accepts address instead of bytes32 for recipient_account_id.

# Transferring native assets

Current API identifes assets being transferred by specifying an H160 style address (XC20). This prevents us from sending native token since there's no representation for it. However, there is a workaround for that which uses special zeroed H160 address 0x0000000000000000000000000000000000000000 and by convention interprets it as a command to send native token (MultiLocation { parents: 0, interior: Here }).

For example, if we have an EVM call like

reserve_transfer:    asset_id = [ "0x00...0" ]    asset_amount = [ "333333333" ]    ...    fee_index = 0

…then precompile internals will transform call args into something like this:

assets = [{ parents: 0, interior: Here }]asset_amounts = [ 333333333 ]

Native assets can be used for paying transaction fees as any other assets. In that case fee_index should point to the asset_id entry containing 0x00...0.

# Transaction fees

Every transaction must be paid. This is done to prevent transaction floods by creating economical pressure to sender. So, technically only those tokens that have some real value can be used to pay for transactions.

Usually we pay for transactions using chain's native token. It's expected that its emission was controlled and will not cause any problems. But in some cases we may want to allow users pay for transactions using foreign assets only.

To do that remote chain should be configured to allow XCM execution payment using that asset.