The Transfer Gate

The Transfer Gate contract manages the rules of ROOT and kETH. All token transfers must pass through the Gate.

The Gate takes and distributes the transfer fees for farming rewards, and performs the ongoing token burns. It can be used to add liquidity quickly and safely without getting front-run, only requiring an ETH contribution from the buyer. Most importantly, it will block any attempts to withdraw liquidity from Uniswap.

The Transfer Gate:

• Takes fees for farming rewards
• Performs a burn on every transfer
• Blocks Uniswap liquidity withdrawals
• Ensures all available kETH is backed 1:1 by wETH
• Sends excess wETH to the Rootkit Vault

kETH: Wrapped wETH

The ROOT/Uniswap pair uses kETH, a wrapped version of wETH. Anyone can create kETH and redeem anytime at a 1:1 rate for wETH and there are no fees other than gas. All available kETH can be redeemed for wETH at any time.

As the price floor rises over time, the Transfer Gate has a function to calculate the floor and remove the backing from the kETH below it. This ETH will then be used in incentivizing strategies that revolve around removing ROOT from circulation, with bonuses for LP creation and burns.

Using proxy tokens in pools unlocks a whole new range of possibilities without ever putting the market or traders at risk. It won’t be long before all DeFi projects use a Transfer Gate of their own.