> ## Documentation Index
> Fetch the complete documentation index at: https://docs.optimism.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Custom Gas Token

> Learn how utilize a Custom Gas Token for OP Stack chains.

Custom Gas Token (CGT) enables OP Stack chains to use any asset as their native fee currency instead of ETH.
This opens up new possibilities for chain operators to align their economic model with their specific use case, whether that's using a stablecoin for predictable fees, a governance token for ecosystem alignment, or creating an entirely new native asset.

This iteration of CGT is a redesign that prioritizes flexibility, minimal core protocol changes, and future-proof standardization by decoupling native asset management from core bridging infrastructure.

## Key features

* **Token flexibility**: Use any token as the native gas token - existing L1 ERC-20s, L2-native tokens, or entirely new assets
* **Application-layer bridging**: No bridge or token is enshrined in the protocol; bridges and converters live entirely at the application layer
* **Flexible supply management**: Chain governors have complete control over token supply, emission schedules, and distribution mechanisms
* **Future-proof design**: Built to support cross-chain interoperability

## How it works

CGT is configured at genesis and comes with two new predeploy contracts to manage native assets independently from ETH bridging:

### The `isCustomGasToken()` flag

When enabled:

* **On L1**: Placed in `SystemConfig`, instructs `OptimismPortal`, `L1CrossDomainMessenger`, and `L1StandardBridge` to reject transactions containing ETH value (`msg.value`)
* **On L2**: Located in `L1Block`, prevents ETH-related operations in `L2ToL1MessagePasser`, `L2CrossDomainMessenger`, `L2StandardBridge`, and `FeeVaults`

This enables native asset mints and burns to be decoupled from deposits and moved to the application layer.

### Two new predeploy contracts

**NativeAssetLiquidity**

Holds pre-minted native assets created at genesis with two core functions:

* `deposit()`: Receives native assets (callable only by LiquidityController)
* `withdraw()`: Releases native assets to the controller

**LiquidityController**

Governance-controlled contract that manages asset supply through:

* `authorizeMinter()` / `deauthorizeMinter()`: Grants or revokes minting permissions
* `mint()`: Unlocks assets from liquidity reserves for authorized parties
* `burn()`: Accepts native assets and locks them in the liquidity contract
* Stores token metadata for wrapped asset compatibility

## Use cases

* **Stablecoin fees**: Use USDC or other stablecoins for predictable transaction costs
* **Governance alignment**: Use your chain's governance token as the gas token to align incentives
* **L2-native economies**: Create entirely new native assets with custom supply mechanics
* **Simplified UX**: Reduce the number of tokens users need to hold for interacting with your chain

## Comparison with previous design

Custom Gas Token v2 was introduced in Upgrade 18 and is available in `op-contracts/v6.0.0`.

| Aspect             | Legacy CGT                            | CGT v2                              |
| ------------------ | ------------------------------------- | ----------------------------------- |
| **Token basis**    | Anchored to L1 ERC-20                 | Independent native asset at genesis |
| **Flexibility**    | Restricted to specific configurations | Supports any release mechanism      |
| **Bridging**       | Built into core contracts             | Application-layer responsibility    |
| **Supply control** | System transaction minting            | Minter authorization model          |
| **Adaptability**   | Limited post-deployment changes       | Upgradeable and flexible            |

<Warning>
  **Migration from legacy CGT**: There is currently no migration path from legacy CGT to CGT v2. A migration path is planned to be put together. Chains using the previous CGT design will need to coordinate a hard fork to adopt the new architecture.
</Warning>

## Developer impact

* **Decoupled from core components**: Since native asset management is decoupled from core components, obtaining native assets might vary chain-by-chain. That means that bridging, conversions, and features utilized would be different. It's suggested to create some library or templates that cover basic uses cases (e.g., L2-native, bridging from L1) to standardize most implementations.
  * Chain Governors are encouraged to audit their implementations.
  * Developers would need to look at the chain's docs to understand how to obtain native assets.
  * Ideally CGT Chain Operators can work together to formalize a common set of CGT patterns that don't come out of the box.
* **No unified API**: The flexibility of this implementation means each CGT chain may have different methods for obtaining native assets
* **ETH bridging**: ETH bridging routes through L1-WETH as an ERC-20 wrapper
* **Documentation**: Clear documentation becomes critical for users to understand how to acquire native assets

## Risks and considerations

### Supply management

* **Minter security**: Any address granted minter permissions requires thorough security review and auditing
* **Access control**: Misconfigurations in bridges or controllers could lead to unintended minting or burning
* **Rate limiting**: Consider implementing rate limits on minting velocity to reduce risk

### Configuration accuracy

* **Flag alignment**: `isCustomGasToken` must match between L1 and L2 to prevent protocol violations
* **Fee parameters**: `minBaseFee` and `operatorFee` must accurately account for execution and data availability costs in the native token's denomination
* **Decimal support**: CGT currently supports only 18-decimal tokens.
  ERC20s with different decimals require custom logic to handle rounding when converting between the token and the native asset.

## Next steps

* **For chain operators**: See [Deploy a Custom Gas Token chain](/chain-operators/guides/features/custom-gas-token-guide) for detailed deployment instructions