Backed Minting

Backed paths back every token 1:1 with an existing IBC coin through a protocol-controlled special address. Invariant setup, conversion, Mint rules, approvals.

A backed path lets a collection issue tokens against an existing IBC coin (a standard Cosmos SDK coin). A special address escrows the IBC coins and converts in both directions. This is how you reverse-wrap an ICS-20 asset such as USDC or ATOM with added compliance.

Back tokens: send tokens to the special address and receive IBC coins.
Unback tokens: send IBC coins to the special address and receive tokens.

Shape

The path is a collection invariant under invariants.cosmosCoinBackedPath.

A complete MsgCreateCollection for a collection backed by USDC. The invariant is open; collectionApprovals is empty because Mint is never a valid sender here (see below):

json

{
  "creator": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "defaultBalances": {
    "autoApproveSelfInitiatedOutgoingTransfers": true,
    "autoApproveSelfInitiatedIncomingTransfers": true,
    "autoApproveAllIncomingTransfers": true
  },
  "validTokenIds": [
    { "start": "1", "end": "1" }
  ],
  "manager": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "collectionMetadata": {
    "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/collection.json"
  },
  "tokenMetadata": [
    {
      "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/{id}.json",
      "tokenIds": [
        { "start": "1", "end": "1" }
      ]
    }
  ],
  "standards": [
    "Smart Token"
  ],
  "invariants": {
    "cosmosCoinBackedPath": {
      "conversion": {
        "sideA": {
          "amount": "1000000",
          "denom": "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8"
        },
        "sideB": [
          {
            "amount": "1",
            "tokenIds": [
              { "start": "1", "end": "1" }
            ],
            "ownershipTimes": [
              { "start": "1", "end": "18446744073709551615" }
            ]
          }
        ]
      }
    }
  }
}

{
  "creator": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "defaultBalances": {
    "balances": [],
    "outgoingApprovals": [],
    "incomingApprovals": [],
    "autoApproveSelfInitiatedOutgoingTransfers": true,
    "autoApproveSelfInitiatedIncomingTransfers": true,
    "autoApproveAllIncomingTransfers": true,
    "userPermissions": {
      "canUpdateOutgoingApprovals": [],
      "canUpdateIncomingApprovals": [],
      "canUpdateAutoApproveSelfInitiatedOutgoingTransfers": [],
      "canUpdateAutoApproveSelfInitiatedIncomingTransfers": [],
      "canUpdateAutoApproveAllIncomingTransfers": []
    }
  },
  "validTokenIds": [
    { "start": "1", "end": "1" }
  ],
  "collectionPermissions": {
    "canDeleteCollection": [],
    "canArchiveCollection": [],
    "canUpdateStandards": [],
    "canUpdateCustomData": [],
    "canUpdateManager": [],
    "canUpdateCollectionMetadata": [],
    "canUpdateValidTokenIds": [],
    "canUpdateTokenMetadata": [],
    "canUpdateCollectionApprovals": [],
    "canAddMoreAliasPaths": [],
    "canAddMoreCosmosCoinWrapperPaths": []
  },
  "manager": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "collectionMetadata": {
    "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/collection.json",
    "customData": ""
  },
  "tokenMetadata": [
    {
      "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/{id}.json",
      "customData": "",
      "tokenIds": [
        { "start": "1", "end": "1" }
      ]
    }
  ],
  "customData": "",
  "collectionApprovals": [],
  "standards": [
    "Smart Token"
  ],
  "isArchived": false,
  "mintEscrowCoinsToTransfer": [],
  "cosmosCoinWrapperPathsToAdd": [],
  "invariants": {
    "noCustomOwnershipTimes": false,
    "maxSupplyPerId": "0",
    "cosmosCoinBackedPath": {
      "conversion": {
        "sideA": {
          "amount": "1000000",
          "denom": "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8"
        },
        "sideB": [
          {
            "amount": "1",
            "tokenIds": [
              { "start": "1", "end": "1" }
            ],
            "ownershipTimes": [
              { "start": "1", "end": "18446744073709551615" }
            ]
          }
        ]
      }
    },
    "noForcefulPostMintTransfers": false,
    "disablePoolCreation": false,
    "evmQueryChallenges": []
  },
  "aliasPathsToAdd": []
}

Proto definition:

proto

message CosmosCoinBackedPath {
  string address = 1;              // Auto-generated special address (from conversion.sideA.denom)
  Conversion conversion = 2;       // Conversion structure with sideA (amount+denom) and sideB (balances)
}

message Conversion {
  ConversionSideAWithDenom sideA = 1;  // Contains amount + denom (from old ibcAmount + ibcDenom)
  repeated Balance sideB = 2;          // Token balances (from old balances field)
}

message ConversionSideAWithDenom {
  string amount = 1;  // IBC coin amount (from old ibcAmount)
  string denom = 2;   // IBC denomination (from old ibcDenom)
}

Raw JSON form:

The complete invariants object in raw JSON:

json

{
  "cosmosCoinBackedPath": {
    "conversion": {
      "sideA": {
        "amount": "1000000",
        "denom": "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8"
      },
      "sideB": [
        {
          "amount": "1",
          "tokenIds": [
            { "start": "1", "end": "1" }
          ],
          "ownershipTimes": [
            { "start": "1", "end": "18446744073709551615" }
          ]
        }
      ]
    }
  }
}

{
  "noCustomOwnershipTimes": false,
  "maxSupplyPerId": "0",
  "cosmosCoinBackedPath": {
    "conversion": {
      "sideA": {
        "amount": "1000000",
        "denom": "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8"
      },
      "sideB": [
        {
          "amount": "1",
          "tokenIds": [
            { "start": "1", "end": "1" }
          ],
          "ownershipTimes": [
            { "start": "1", "end": "18446744073709551615" }
          ]
        }
      ]
    }
  },
  "noForcefulPostMintTransfers": false,
  "disablePoolCreation": false,
  "evmQueryChallenges": []
}

Field	Type	Required	Description
`address`	string	derived	Special address, generated from `conversion.sideA.denom`
`conversion.sideA.amount`	string	yes	IBC coin amount on side A
`conversion.sideA.denom`	string	yes	Existing IBC denom with the `ibc/` prefix
`conversion.sideB`	`Balance[]`	yes	Tokens that side A backs

Ask your agent:

text

Create a smart token backed 1:1 by USDC (ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8) where each address can unback at most 10 times per day.

The MCP builder tools (generate_backing_address, set_invariants, add_approval) produce the objects on this page.

Special Address

Each backed path has one special address derived from conversion.sideA.denom.

ts

import { generateAliasAddressForIBCBackedDenom } from 'bitbadges';

const ibcDenom = 'ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8';
const specialAddress = generateAliasAddressForIBCBackedDenom(ibcDenom);
console.log('Special Address:', specialAddress);

Properties:

Deterministic hash of the IBC denom.
The intermediary for every conversion.
Marked as a reserved protocol address, which prevents accidental use elsewhere and keeps the chain's handling consistent.
Holds the IBC coins that back the tokens.

The special address technically has unlimited token balances, but it only allows transfers when adequate IBC coins are present and sent or received. Think of it as an external contract that updates its own approvals. Conversions are initiated by the user and approved by the address itself.

Conversion Mechanism

The conversion is Conversion (with denom), because the denom is part of the conversion, unlike wrapper paths. The rate is:

text

conversion.sideA (amount, denom) = conversion.sideB[] (x/tokenization)
Ex: { amount: "1000000", denom: "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8" } = [{ amount: 1n, tokenIds: [{ start: 1n, end: 1n }], ownershipTimes: UintRangeArray.FullRanges() }]

ts

// Configuration
const backedPath = {
    conversion: {
        sideA: {
            amount: '1000000', // IBC coin amount (from old ibcAmount)
            denom: 'ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8', // IBC denomination (from old ibcDenom)
        },
        sideB: [
            {
                amount: 1n,
                tokenIds: [{ start: 1n, end: 1n }],
                ownershipTimes: [{ start: 1n, end: 18446744073709551615n }],
            },
        ],
    },
};

sideA holds amount and denom (the old ibcAmount and ibcDenom fields).
sideB is the Balance[] for the tokens (the old balances field).
Rate: conversion.sideA.amount of conversion.sideA.denom = conversion.sideB[] tokens.

You cannot fractionalize a conversion. Make the units as small as needed to get the granularity you want.

Configuration Rules

Backed paths are collection invariants:

Set only at collection creation.
Cannot be modified afterward.
Exactly one backed path per collection.

A fuller creation example with 100 token IDs:

json

{
  "creator": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "defaultBalances": {
    "autoApproveSelfInitiatedOutgoingTransfers": true,
    "autoApproveSelfInitiatedIncomingTransfers": true,
    "autoApproveAllIncomingTransfers": true
  },
  "validTokenIds": [
    { "start": "1", "end": "100" }
  ],
  "manager": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "collectionMetadata": {
    "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/collection.json"
  },
  "tokenMetadata": [
    {
      "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/{id}.json",
      "tokenIds": [
        { "start": "1", "end": "100" }
      ]
    }
  ],
  "standards": [
    "Smart Token"
  ],
  "invariants": {
    "cosmosCoinBackedPath": {
      "conversion": {
        "sideA": {
          "amount": "1000000",
          "denom": "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8"
        },
        "sideB": [
          {
            "amount": "1",
            "tokenIds": [
              { "start": "1", "end": "100" }
            ],
            "ownershipTimes": [
              { "start": "1", "end": "18446744073709551615" }
            ]
          }
        ]
      }
    }
  }
}

{
  "creator": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "defaultBalances": {
    "balances": [],
    "outgoingApprovals": [],
    "incomingApprovals": [],
    "autoApproveSelfInitiatedOutgoingTransfers": true,
    "autoApproveSelfInitiatedIncomingTransfers": true,
    "autoApproveAllIncomingTransfers": true,
    "userPermissions": {
      "canUpdateOutgoingApprovals": [],
      "canUpdateIncomingApprovals": [],
      "canUpdateAutoApproveSelfInitiatedOutgoingTransfers": [],
      "canUpdateAutoApproveSelfInitiatedIncomingTransfers": [],
      "canUpdateAutoApproveAllIncomingTransfers": []
    }
  },
  "validTokenIds": [
    { "start": "1", "end": "100" }
  ],
  "collectionPermissions": {
    "canDeleteCollection": [],
    "canArchiveCollection": [],
    "canUpdateStandards": [],
    "canUpdateCustomData": [],
    "canUpdateManager": [],
    "canUpdateCollectionMetadata": [],
    "canUpdateValidTokenIds": [],
    "canUpdateTokenMetadata": [],
    "canUpdateCollectionApprovals": [],
    "canAddMoreAliasPaths": [],
    "canAddMoreCosmosCoinWrapperPaths": []
  },
  "manager": "bb1p0rrel3365scadq5k9pv0x0zp9j22js6dnw70d",
  "collectionMetadata": {
    "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/collection.json",
    "customData": ""
  },
  "tokenMetadata": [
    {
      "uri": "ipfs://bafybeigdyrzt5sfp7udm7hu76uh7y26nf3efuylqabf3oclgtqy55fbzdi/{id}.json",
      "customData": "",
      "tokenIds": [
        { "start": "1", "end": "100" }
      ]
    }
  ],
  "customData": "",
  "collectionApprovals": [],
  "standards": [
    "Smart Token"
  ],
  "isArchived": false,
  "mintEscrowCoinsToTransfer": [],
  "cosmosCoinWrapperPathsToAdd": [],
  "invariants": {
    "noCustomOwnershipTimes": false,
    "maxSupplyPerId": "0",
    "cosmosCoinBackedPath": {
      "conversion": {
        "sideA": {
          "amount": "1000000",
          "denom": "ibc/E1116484B327AEE59CDC3DA73D319834781A13DB2A7DFC1F38A30CD45ABF58B8"
        },
        "sideB": [
          {
            "amount": "1",
            "tokenIds": [
              { "start": "1", "end": "100" }
            ],
            "ownershipTimes": [
              { "start": "1", "end": "18446744073709551615" }
            ]
          }
        ]
      }
    },
    "noForcefulPostMintTransfers": false,
    "disablePoolCreation": false,
    "evmQueryChallenges": []
  },
  "aliasPathsToAdd": []
}

The escrow address derives from the denom string. A backed collection cannot be repointed to another denom later. Pick the canonical denom at creation. See Supported Denoms.

Mint Address Restrictions

When a backed path is set:

Transfers from the Mint address are never allowed.
Every mint goes through the backed path.
Collection approvals cannot list Mint in fromListId.

This stops mints that bypass the backing and desync supply. For a hybrid design, skip the invariant and build the logic with custom transferability instead.

ts

// Invalid: Mint cannot be a sender when cosmosCoinBackedPath is set
const invalidApproval: CollectionApproval<bigint> = {
  fromListId: 'Mint',
  toListId: 'All',
  initiatedByListId: 'All',
  transferTimes: [{ start: 1n, end: 18446744073709551615n }],
  tokenIds: [{ start: 1n, end: 100n }],
  ownershipTimes: [{ start: 1n, end: 18446744073709551615n }],
  approvalId: 'mint',
  version: 0n,
  approvalCriteria: {
    overridesFromOutgoingApprovals: true,
  },
};

// Valid: the special address is the only source of new tokens
const validApproval: CollectionApproval<bigint> = {
  fromListId: specialAddress,
  toListId: 'All',
  initiatedByListId: 'All',
  transferTimes: [{ start: 1n, end: 18446744073709551615n }],
  tokenIds: [{ start: 1n, end: 100n }],
  ownershipTimes: [{ start: 1n, end: 18446744073709551615n }],
  approvalId: 'backing-approval',
  version: 0n,
  approvalCriteria: {
    allowBackedMinting: true,
    mustPrioritize: true,
  },
};

Transferability Requirements

The special address follows the same approval rules as any other address. You can gate by user, rate-limit, require KYC on the way out (for example a $2500 per day withdrawal limit), or apply any other criteria. Every approval used for a backed operation must set allowBackedMinting: true in approvalCriteria. See Special Address Flags.

ts

// Example: Rate-limited backing
const collectionApprovals = [
    {
        fromListId: specialAddress,
        toListId: 'All',
        initiatedByListId: 'All',
        transferTimes: [{ start: 1n, end: 18446744073709551615n }],
        tokenIds: [{ start: 1n, end: 100n }],
        ownershipTimes: [{ start: 1n, end: 18446744073709551615n }],
        approvalId: 'backing-approval',
        version: 0n,
        approvalCriteria: {
            allowBackedMinting: true, // Required for IBC backed path operations
            // overridesFromOutgoingApprovals is irrelevant: backing addresses are protocol-controlled with auto-set approvals
            mustPrioritize: true, // Required for IBC backed operations
            maxNumTransfers: {
                overallMaxNumTransfers: 0n,
                perToAddressMaxNumTransfers: 0n,
                perFromAddressMaxNumTransfers: 0n,
                perInitiatedByAddressMaxNumTransfers: 10n, // 10 backs per day
                amountTrackerId: 'backing-daily',
                resetTimeIntervals: { startTime: 1788739200000n, intervalLength: 86400000n },
            },
        },
    },
];

How the Chain Detects a Conversion

MsgTransferTokens is the entry point. The chain checks:

to equals the backed path address: backing.
from equals the backed path address: unbacking.

The bank module alone cannot trigger a conversion because it does not know about backed paths. To back or unback, send a MsgTransferTokens to or from the special address. The chain manages the special address's own approvals. The approval must be prioritized because this is a special context.

State:

Token balances are managed normally.
IBC coin balances are managed by the bank module.
The special address holds the escrowed IBC coins.

Every conversion is atomic. It succeeds completely or fails completely, with no partial state.

Example: Backing Tokens

ts

// User sends tokens to special address
// IBC backed path operations require prioritized approvals (not compatible with auto-scan mode)
// The initiator must equal the sender/recipient - no doing this on behalf of another user
const backTokens: MsgTransferTokens = {
    creator: 'bb1py4mfpg6uf59qkyzg0nmau322c5873eeysp5ue', // Must equal from address
    collectionId: '1',
    transfers: [
        {
            from: 'bb1py4mfpg6uf59qkyzg0nmau322c5873eeysp5ue', // Must equal creator
            toAddresses: [specialAddress], // Special IBC backed path address
            balances: [
                {
                    amount: 5n,
                    tokenIds: [{ start: 1n, end: 1n }],
                    ownershipTimes: [{ start: 1n, end: 18446744073709551615n }],
                },
            ],
            prioritizedApprovals: [
                {
                    approvalId: 'backing-approval',
                    approvalLevel: 'collection',
                    approverAddress: '',
                    version: 0n,
                },
            ],
            onlyCheckPrioritizedCollectionApprovals: true,
        },
    ],
};

// Result: User receives corresponding IBC coins automatically based on the conversion rate

Example: Unbacking Tokens

The chain handles the special address's approvals. The user only needs enough IBC coins to unback.

ts

// User initiates transfer on behalf of special address to receive tokens
// IBC backed path operations require prioritized approvals (not compatible with auto-scan mode)
// The initiator must equal the recipient - no doing this on behalf of another user
const unbackTokens: MsgTransferTokens = {
    creator: 'bb1py4mfpg6uf59qkyzg0nmau322c5873eeysp5ue', // Must equal toAddress
    collectionId: '1',
    transfers: [
        {
            from: specialAddress, // Transfer from special IBC backed path address
            toAddresses: ['bb1py4mfpg6uf59qkyzg0nmau322c5873eeysp5ue'], // Must equal creator
            balances: [
                {
                    amount: 5n,
                    tokenIds: [{ start: 1n, end: 1n }],
                    ownershipTimes: [{ start: 1n, end: 18446744073709551615n }],
                },
            ],
            prioritizedApprovals: [
                {
                    approvalId: 'unbacking-approval',
                    approvalLevel: 'collection',
                    approverAddress: '',
                    version: 0n,
                },
            ],
            onlyCheckPrioritizedCollectionApprovals: true,
        },
    ],
};

// Result: User receives 5 tokens
// Corresponding IBC coins are deducted from special address

Differences from Wrapper Paths

The main difference is which denom is used for minting.

Feature	Backed path	Wrapper path
Minting	No mint or burn; uses the existing IBC denom	Mints and burns a generated denom
Denom source	Existing IBC denom	Generated denom
Configuration	Collection invariant	Paths can be added, never edited
Standard minting	Disabled	Enabled

Edit this page on GitHub

Shape#

Special Address#

Conversion Mechanism#

Configuration Rules#

Mint Address Restrictions#

Transferability Requirements#

How the Chain Detects a Conversion#

Example: Backing Tokens#

Example: Unbacking Tokens#

Differences from Wrapper Paths#

Related#

Shape

Special Address

Conversion Mechanism

Configuration Rules

Mint Address Restrictions

Transferability Requirements

How the Chain Detects a Conversion

Example: Backing Tokens

Example: Unbacking Tokens

Differences from Wrapper Paths

Related