# \[Proposal\] Mento Upgrade MU04: Phase out V1, fully transition to V2 and update StableToken

**URL:** <https://forum.celo.org/t/proposal-mento-upgrade-mu04-phase-out-v1-fully-transition-to-v2-and-update-stabletoken/7034>\
**Category:** Governance Proposals\
**Created:** [December 7, 2023, 4:19pm UTC](https://forum.celo.org/t/proposal-mento-upgrade-mu04-phase-out-v1-fully-transition-to-v2-and-update-stabletoken/7034 "2023-12-07T16:19:51Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![bowd](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/bowd/32/368_2.png) [@bowd](https://forum.celo.org/u/bowd)\
**Post date:** [December 7, 2023, 4:19pm UTC](https://forum.celo.org/t/proposal-mento-upgrade-mu04-phase-out-v1-fully-transition-to-v2-and-update-stabletoken/7034/1 "2023-12-07T16:19:51Z")

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# Overview

Hello everyone!

For the last year, the Mento Labs Team has been working on rolling out Mento V2 (Multi-Collateral-Mento). The updated version of the Mento protocol was rolled out slowly in multiple steps and in parallel with Mento V1, which is still active. After extensive testing, it is time to deprecate V1 and fully move to Mento V2.

This post outlines the transactions that will be part of the deprecation of V1 as well as the transition to Mento V2. We also updated the StableToken implementation to a more modern ERC20 implementation with reduced gas costs.

As with previous proposals, the Celo community can verify them. In preparation for the upcoming CGP, we have done the following:

- Tested the proposal on Baklava and Alfajores
- Simulated the proposal on top of a fork of Celo Mainnet, in addition to running tests against the fork

The transactions in the upcoming CGP will be broken down into the following sections, noted here with transaction indices in brackets:

1. **Update StableToken implementations (0-7)**
2. **Deprecate Mento V1 Exchange contracts (8-14)**
3. **Configure Reserve (15-28)**
4. **Configure trading limits (29-37)**

Before we dive deep into each section and transaction, we recommend you have `celocli` set up to follow along. For the tech-savvy, you can find everything we are describing here in our [deployment tooling repository](https://github.com/mento-protocol/mento-deployment/blob/main/script/upgrades/eXOF/eXOF.sol) as code. To verify the addresses in the proposal are correct, please refer to the Appendix at the bottom for some handy tips.

## 1. Update StableToken implementations

This includes the transactions to point the existing StableTokenProxies for cUSD, cEUR, cBRL, and eXOF to the newly updated StableToken implementation and setting new StableTokenV2-specific parameters.

**TX#0** update the implementation for the **cUSD** Proxy `_setImplementation()`

- Verify **StableTokenProxy** address
- Verify the **StableTokenV2** implementation address

**TX#1** update the implementation for the **cEUR** Proxy `_setImplementation()`

- Verify **StableTokenEURProxy** address
- Verify the **StableTokenV2** implementation address

**TX#2** update the implementation for the **cBRL** Proxy `_setImplementation()`

- Verify **StableTokenBRLProxy** address
- Verify the **StableTokenV2** implementation address

**TX#3** update the implementation for the **eXOF** Proxy `_setImplementation()`

- Verify **StableTokenXOFProxy** address
- Verify the **StableTokenV2** implementation address

**TX#4** configure new **StableTokenV2** parameters for **cUSD** `initializeV2()`

- Verify **StableTokenProxy** address
- Verify **BrokerProxy** address
- Verify **Validators** address
- Verify **Exchange** address is the zero address

**TX#5** configure new **StableTokenV2** parameters for **cEUR** `initializeV2()`

- Verify **StableTokenEURProxy** address
- Verify **BrokerProxy** address
- Verify **Validators** address
- Verify **Exchange** address is the zero address

**TX#6** configure new **StableTokenV2** parameters for **cBRL** `initializeV2()`

- Verify **StableTokenBRLProxy** address
- Verify **BrokerProxy** address
- Verify **Validators** address
- Verify **Exchange** address is the zero address

**TX#7** configure new **StableTokenV2** parameters for **eXOF** `initializeV2()`

- Verify **StableTokenXOFProxy** address
- Verify **BrokerProxy** address
- Verify **Validators** address
- Verify **Exchange** address is the zero address

## 2. Deprecate Mento V1 Exchange contracts

This includes freezing the Exchange, ExchangeEUR, ExchangeBRL, and GrandaMento contracts and updating their Celo registry entries.

**TX#8** freeze **Exchange** contract `freeze()`

- Verify **FreezerProxy** address
- Verify **ExchangeProxy** address

**TX#9** freeze **ExchangeEUR** contract `freeze()`

- Verify **FreezerProxy** address
- Verify **ExchangeEURProxy** address

**TX#10** freeze **ExchangeBRL** contract `freeze()`

- Verify **FreezerProxy** address
- Verify **ExchangeBRLProxy** address

**TX#11** update **Exchange** registry entry `setAddressFor()`

- Verify **Registry** address
- Verify string is **“Exchange”**
- Verify address is zero address

**TX#12** update **ExchangeEUR** registry entry `setAddressFor()`

- Verify **Registry** address
- Verify string is **“ExchangeEUR”**
- Verify address is zero address

**TX#13** update **ExchangeBRL** registry entry `setAddressFor()`

- Verify **Registry** address
- Verify string is **“ExchangeBRL”**
- Verify address is zero address

**TX#14** update **GrandaMento** registry entry `setAddressFor()`

- Verify **Registry** address
- Verify string is **“GrandaMento”**
- Verify address is zero address

## 3. Configure Reserve

As part of the Mento V2 upgrade, the Mento team introduced an updated reserve implementation. This new implementation was used for the partial reserve introduced to initially limit the reserve funds that Mento V2 had control over. Meanwhile, the main reserve was still using the old reserve implementation. Since we are now fully transitioning to MentoV2, we are deprecating the partial reserve and updating the implementation of the main reserve.

Spending rights of old Exchange contracts will also be removed from the Reserve as part of the V1 deprecation.

**TX#15** update reserve implementation in the **ReserveProxy** `_setImplementation()`

- Verify **ReserveProxy** address
- Verify the new **Reserve** implementation address

**TX#16** remove **ExchangeBRL** from reserve exchange spender list `removeExchangeSpender()`

- Verify **ReserveProxy** address
- Verify **ExchangeBRLProxy** address
- Verify index in the exchange spender list is 2

**TX#17** remove **GrandaMento** from reserve exchange spender list `removeExchangeSpender()`

- Verify **ReserveProxy** address
- Verify **GrandaMentoProxy** address
- Verify index in the exchange spender list is 1

**TX#18** remove **ExchangeEUR** from reserve exchange spender list `removeExchangeSpender()`

- Verify **ReserveProxy** address
- Verify **ExchangeEURProxy** address
- Verify index in the exchange spender list is 0

**TX#19** add **Broker** to reserve exchange spender list `addExchangeSpender()`

- Verify **ReserveProxy** address
- Verify **BrokerProxy** address

**TX#20** add **CELO** to the new reserve collateral asset list `addCollateralAsset()`

- Verify **ReserveProxy** address
- Verify the **CELO** token address

**TX#21** add **axlUSDC** to the new reserve collateral asset list `addCollateralAsset()`

- Verify **ReserveProxy** address
- Verify the **axlUSDC** token address

**TX#22** add **axlEUROC** to the new reserve collateral asset list `addCollateralAsset()`

- Verify **ReserveProxy** address
- Verify the **axlEUROC** token address

**TX#23** configure daily spending ratio for collateral assets \*\*\*\*`setDailySpendingRatioForCollateralAssets**()**`

- Verify **ReserveProxy** address
- Verify collateral assets: [**Celo, axlUSDC, axlEUROC**]
- Verify spending ratios: [`2e23 = 20%, 100% = 1e24, 100% = 1e24`]

**TX#24** add **eXOF** to reserve token list `addToken()`

- Verify **ReserveProxy** address
- Verify **StableTokenXOFProxy address**

**TX#25** Remove old \*\*\*\*reserve multi-sig from reserve spender list `removeSpender()`

- Verify **ReserveProxy** address
- Verify old reserve multi-sig address

**TX#26** add new \*\*\*\*reserve multi-sig to reserve spender list `addSpender()` also used for the partial reserve ([Proposal: MU01-Phase1 MultiCollateral Mento](https://forum.celo.org/t/proposal-mu01-phase1-multicollateral-mento/5245))

- Verify **ReserveProxy** address
- Verify new reserve multi-sig address

**TX#27** update reserve in **Broker** to use main reserve `setReserve()`

- Verify **BrokerProxy** address
- Verify **ReserveProxy** address

**TX#28** update reserve in **BiPoolManager** to use main reserve `setReserve()`

- Verify **BiPoolManagerProxy** address
- Verify **ReserveProxy** address

## 3. Configure trading limits

As part of fully transitioning to Mento V2, we are increasing the **TradingLimits** to support larger trading volumes.

In this section, the output of **celocli** can be too verbose when dealing with arguments and structs, so it’s recommended to ignore args and numbered fields and to focus instead on **params** and **named fields**.

The **TradingLimit.Config** structure is documented here: [https://docs.mento.org/mento/developers/smart-contracts/tradinglimits](https://docs.mento.org/mento/developers/smart-contracts/tradinglimits)

**TX#29** - configure trading limits on **cUSD** for the **cUSD/CELO** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cUSD/CELO** exchange
  - **token:** which asset in the pair to target, in this case, the **cUSD** token address
  - **config:** the trading limit configuration

**TX#30** - configure trading limits on **cEUR** for the **cEUR/CELO** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cEUR/CELO** exchange
  - **token:** which asset in the pair to target, in this case, the **cEUR** token address
  - **config:** the trading limit configuration

**TX#31** - configure trading limits on **cBRL** for the **cBRL/CELO** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cBRL/CELO** exchange
  - **token:** which asset in the pair to target, in this case, the **cBRL** token address
  - **config:** the trading limit configuration

**TX#32** - configure trading limits on **cUSD** for the **cUSD/USDC** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cUSD/USDC** exchange
  - **token:** which asset in the pair to target, in this case, the **cUSD** token address
  - **config:** the trading limit configuration

**TX#33** - configure trading limits on **cEUR** for the **cEUR/USDC** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cEUR/USDC** exchange
  - **token:** which asset in the pair to target, in this case, the **cEUR** token address
  - **config:** the trading limit configuration

**TX#34** - configure trading limits on **cBRL** for the **cBRL/USDC** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cBRL/USDC** exchange
  - **token:** which asset in the pair to target, in this case, the **cBRL** token address
  - **config:** the trading limit configuration

**TX#35** - configure trading limits on **cEUR** for the **cEUR/EUROC** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **cEUR/EUROC** exchange
  - **token:** which asset in the pair to target, in this case, the **cEUR** token address
  - **config:** the trading limit configuration

**TX#36** - Configure trading limits on **eXOF** for the **eXOF/EUROC** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **eXOF/EUROC** exchange
  - **token:** which asset in the pair to target, in this case, the **eXOF** token address
  - **config:** the trading limit configuration

**TX#37** - Configure trading limits on **EUROC** for the **eXOF/EUROC** exchange `configureTradingLimit()`

- Verify **BrokerProxy** address
- Verify the arguments:
  - **exchangeId:** the deterministic id of the **eXOF/EUROC** exchange
  - **token:** which asset in the pair to target, in this case, the **EUROC** token address
  - **config:** the trading limit configuration

## Appendix: Verifying an address

Verifying that an address in the CGP is correct requires a few different strategies depending on what that address is (see the [mento docs](https://docs.mento.org/mento/protocol-concepts/governance/verification) for some additional information). Here are common situations:

- Is it a rate feed identifier like: `address(uint160(keccack256(”USDCEUR”)))`
  - Use [Keccak-256 Online 2](https://emn178.github.io/online-tools/keccak_256.html) to compute the keccak
  - Take the last 40 characters (20 bytes) of the keccak and compare with the value

- Is it a Mento contract?
  - Did it exist before MU01? (e.g. SortedOracles, StableToken, etc)
    - Yes:
      - It’s probably a proxy so you can check the addresses in the docs: [Addresses - Mento Protocol 1](https://docs.mento.org/mento/developers/deployments/addresses)
      - You can also query the Registry contract on the target network

    - No:
      - New contracts can also be checked in the docs: [Addresses - Mento Protocol 1](https://docs.mento.org/mento/developers/deployments/addresses)
      - Bytecode verification can be done by following the instructions here: [Verification | Mento Protocol](https://docs.mento.org/mento/developers/deployments/verification)

- Is it a Core Celo contract?
  - Yes:
    - It’s probably **GoldToken** which can be verified in the Celo Registry

  - No:
    - It’s probably **axlUSDC or axlEUROC,** which can be both verified here: [Axelar Documentation 1](https://docs.axelar.dev/resources/mainnet)

---

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**Author:** ![philbow61](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/philbow61/32/9308_2.png) [@philbow61](https://forum.celo.org/u/philbow61)\
**Post date:** [December 11, 2023, 2:02pm UTC](https://forum.celo.org/t/proposal-mento-upgrade-mu04-phase-out-v1-fully-transition-to-v2-and-update-stabletoken/7034/2 "2023-12-11T14:02:35Z")

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Hi everyone!

The MU04 proposal is out and can be seen by running `celocli governance:show --proposalID 144 --node https://forno.celo.org`

Please note that due to a bug in the current stable version of celocli, `3.1.2-beta.1` is required to be able to decode this proposal [@celo/celocli - npm](https://www.npmjs.com/package/@celo/celocli/v/3.1.2-beta.1). The new beta version can be installed by running `npm i @celo/celocli@3.1.2-beta.1`

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**Author:** ![0xj4an-work](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/0xj4an-work/32/9565_2.png) [@0xj4an-work](https://forum.celo.org/u/0xj4an-work)\
**Post date:** [December 20, 2023, 5:40pm UTC](https://forum.celo.org/t/proposal-mento-upgrade-mu04-phase-out-v1-fully-transition-to-v2-and-update-stabletoken/7034/3 "2023-12-20T17:40:22Z")

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Congrats about the approved proposal 🙌

- **Link to Celo.Stake.id:**  
[Celo Governance by Staking Fund](https://celo.stake.id/#/proposal/144)

- **Screenshot of the results:**