diff --git a/src/HypERC20ForLSP7.sol b/src/HypERC20ForLSP7.sol
new file mode 100644
index 0000000..bcfa371
--- /dev/null
+++ b/src/HypERC20ForLSP7.sol
@@ -0,0 +1,31 @@
+// SPDX-License-Identifier: UNLICENSED
+pragma solidity >=0.8.19;
+
+// modules
+import { HypERC20 } from "@hyperlane-xyz/core/contracts/token/HypERC20.sol";
+import { TokenRouter } from "@hyperlane-xyz/core/contracts/token/libs/TokenRouter.sol";
+
+// libraries
+import { TypeCasts } from "@hyperlane-xyz/core/contracts/libs/TypeCasts.sol";
+import { TokenMessageForLSP7 } from "./TokenMessageForLSP7.sol";
+
+contract HypERC20ForLSP7 is HypERC20 {
+    constructor(uint8 __decimals, address _mailbox) HypERC20(__decimals, _mailbox) { }
+
+    /**
+     * @dev Mints tokens to recipient when router receives transfer message.
+     * @dev Emits `ReceivedTransferRemote` event on the destination chain.
+     * @param _origin The identifier of the origin chain.
+     * @param _message The encoded remote transfer message containing the recipient address and amount.
+     *
+     * @dev This function is overriden to extract the right params and calldata slices
+     * from a transfer message coming from LSP7, via the modified library `TokenMessageForLSP7`.
+     */
+    function _handle(uint32 _origin, bytes32, bytes calldata _message) internal virtual override(TokenRouter) {
+        bytes32 recipient = TokenMessageForLSP7.recipient(_message);
+        uint256 amount = TokenMessageForLSP7.amount(_message);
+        bytes calldata metadata = TokenMessageForLSP7.metadata(_message);
+        _transferTo(TypeCasts.bytes32ToAddress(recipient), amount, metadata);
+        emit ReceivedTransferRemote(_origin, recipient, amount);
+    }
+}
diff --git a/src/HypLSP7.sol b/src/HypLSP7.sol
index 3d9e6af..938dbde 100644
--- a/src/HypLSP7.sol
+++ b/src/HypLSP7.sol
@@ -6,9 +6,6 @@ import { LSP7DigitalAssetInitAbstract } from "@lukso/lsp7-contracts/contracts/LS
 import { TokenRouter } from "@hyperlane-xyz/core/contracts/token/libs/TokenRouter.sol";
 import { OwnableUpgradeable } from "@openzeppelin/contracts-upgradeable/access/OwnableUpgradeable.sol";
 
-// libraries
-import { TokenMessageForLSP7 } from "./TokenMessageForLSP7.sol";
-
 // constants
 import { _LSP4_TOKEN_TYPE_TOKEN } from "@lukso/lsp4-contracts/contracts/LSP4Constants.sol";
 
@@ -100,25 +97,4 @@ contract HypLSP7 is LSP7DigitalAssetInitAbstract, TokenRouter {
     {
         LSP7DigitalAssetInitAbstract._mint(_recipient, _amount, true, "");
     }
-
-    function _transferRemote(
-        uint32 _destination,
-        bytes32 _recipient,
-        uint256 _amountOrId,
-        uint256 _value,
-        bytes memory _hookMetadata,
-        address _hook
-    )
-        internal
-        virtual
-        override(TokenRouter)
-        returns (bytes32 messageId)
-    {
-        bytes memory _tokenMetadata = _transferFromSender(_amountOrId);
-        bytes memory _tokenMessage = TokenMessageForLSP7.format(_recipient, _amountOrId, _tokenMetadata);
-
-        messageId = _Router_dispatch(_destination, _value, _tokenMessage, _hookMetadata, _hook);
-
-        emit SentTransferRemote(_destination, _recipient, _amountOrId);
-    }
 }
diff --git a/src/HypLSP7Collateral.sol b/src/HypLSP7Collateral.sol
new file mode 100644
index 0000000..bb84d8d
--- /dev/null
+++ b/src/HypLSP7Collateral.sol
@@ -0,0 +1,53 @@
+// SPDX-License-Identifier: UNLICENSED
+pragma solidity >=0.8.19;
+
+// Interfaces
+import { ILSP7DigitalAsset as ILSP7 } from "@lukso/lsp7-contracts/contracts/ILSP7DigitalAsset.sol";
+
+// Modules
+import { TokenRouter } from "@hyperlane-xyz/core/contracts/token/libs/TokenRouter.sol";
+
+contract HypLSP7Collateral is TokenRouter {
+    ILSP7 public immutable wrappedToken;
+
+    /**
+     * @notice Constructor
+     * @param lsp7_ Address of the token to keep as collateral
+     */
+    constructor(address lsp7_, address mailbox_) TokenRouter(mailbox_) {
+        wrappedToken = ILSP7(lsp7_);
+    }
+
+    function initialize(address _hook, address _interchainSecurityModule, address _owner) public virtual initializer {
+        _MailboxClient_initialize(_hook, _interchainSecurityModule, _owner);
+    }
+
+    function balanceOf(address _account) external view override returns (uint256) {
+        return wrappedToken.balanceOf(_account);
+    }
+
+    /**
+     * @dev Transfers `_amount` of `wrappedToken` from `msg.sender` to this contract.
+     * @inheritdoc TokenRouter
+     */
+    function _transferFromSender(uint256 _amount) internal virtual override returns (bytes memory) {
+        wrappedToken.transfer(msg.sender, address(this), _amount, true, "");
+        return bytes(""); // no metadata
+    }
+
+    /**
+     * @dev Transfers `_amount` of `wrappedToken` from this contract to `_recipient`.
+     * @inheritdoc TokenRouter
+     */
+    function _transferTo(
+        address _recipient,
+        uint256 _amount,
+        bytes calldata // no metadata
+    )
+        internal
+        virtual
+        override
+    {
+        wrappedToken.transfer(address(this), _recipient, _amount, true, "");
+    }
+}
diff --git a/src/TokenMessageForLSP7.sol b/src/TokenMessageForLSP7.sol
index 5da1ebb..d4c83c2 100644
--- a/src/TokenMessageForLSP7.sol
+++ b/src/TokenMessageForLSP7.sol
@@ -4,13 +4,41 @@ pragma solidity >=0.8.0;
 /// @dev Adjusted version of the TokenMessage library from Hyperlane
 /// to extract parameters from the calldata of an LSP7 transfer
 /// according to the `transfer(address,address,uint256,bool,bytes)` signature.
+/**
+ * @title TokenMessage library for LSP7 calldatas
+ * @author CJ42
+ * @dev
+ *
+ * Example: for the following `transfer(...)` function call:
+ *
+ * from:    0x927aad446e3bf6eeb776387b3d7a89d8016fa54d (cj42)
+ * to:      0x345b918b9e06faa7b0e56bd71ba418f31f47fed4 (yamen)
+ * amount:  100000000000000000000 (= 100 tokens with 18 decimals)
+ * force:   false
+ * data:    0x
+ *
+ * The calldata will look as follow:
+ * 0x760d9bba000000000000000000000000927aad446e3bf6eeb776387b3d7a89d8016fa54d000000000000000000000000345b918b9e06faa7b0e56bd71ba418f31f47fed40000000000000000000000000000000000000000000000056bc75e2d63100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000a00000000000000000000000000000000000000000000000000000000000000000
+ *
+ * 0x760d9bba                                                         -> bytes4 selector
+ *   000000000000000000000000927aad446e3bf6eeb776387b3d7a89d8016fa54d -> address `from`
+ *   000000000000000000000000345b918b9e06faa7b0e56bd71ba418f31f47fed4 -> address `to`
+ *   0000000000000000000000000000000000000000000000056bc75e2d63100000 -> uint256 `amount`
+ *   0000000000000000000000000000000000000000000000000000000000000000 -> bool `force`
+ *   00000000000000000000000000000000000000000000000000000000000000a0 -> offset of bytes `data`
+ *   0000000000000000000000000000000000000000000000000000000000000000 -> `data.length` = 0
+ *
+ * Note: the offset of data is index starting from just after the bytes4 selector, where the data [length + value] is
+ * located in the calldata (0xa0 = 160).
+ */
 library TokenMessageForLSP7 {
     function format(bytes32 _recipient, uint256 _amount, bytes memory _metadata) internal view returns (bytes memory) {
         return abi.encodePacked(
-            msg.sender, // TODO: which sender should be specified here? Should we add an extra parameter?
+            abi.encode(msg.sender), // TODO: which sender should be specified here? Should we add an
+                // extra parameter?
             _recipient,
             _amount,
-            true, // force param set to `true` by default
+            abi.encode(true), // force param set to `true` by default
             _metadata
         );
     }
@@ -22,4 +50,16 @@ library TokenMessageForLSP7 {
     function amount(bytes calldata message) internal pure returns (uint256) {
         return uint256(bytes32(message[64:96]));
     }
+
+    function metadata(bytes calldata message) internal pure returns (bytes calldata) {
+        return message[128:];
+    }
 }
+
+// 0x44c028fe
+//   0000000000000000000000000000000000000000000000000000000000000000
+//   0000000000000000000000005b8b0e44d4719f8a328470dccd3746bfc73d6b14
+//   0000000000000000000000000000000000000000000000000000000000000000
+//   0000000000000000000000000000000000000000000000000000000000000080
+//   00000000000000000000000000000000000000000000000000000000000000c4
+//   760d9bba000000000000000000000000927aad446e3bf6eeb776387b3d7a89d8016fa54d000000000000000000000000345b918b9e06faa7b0e56bd71ba418f31f47fed40000000000000000000000000000000000000000000000056bc75e2d63100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000a0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000