diff --git a/test-foundry/integration/YieldBearingBridge.t.sol b/test-foundry/integration/YieldBearingBridge.t.sol
new file mode 100644
index 000000000..525d7c24a
--- /dev/null
+++ b/test-foundry/integration/YieldBearingBridge.t.sol
@@ -0,0 +1,202 @@
+// SPDX-License-Identifier: Apache-2.0
+
+pragma solidity ^0.8.0;
+
+import "../L1ArbitrumExtendedGateway.t.sol";
+import "contracts/tokenbridge/ethereum/gateway/L1ERC20Gateway.sol";
+import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
+import { MasterVault } from "contracts/tokenbridge/libraries/vault/MasterVault.sol";
+import { UpgradeableBeacon } from "@openzeppelin/contracts/proxy/beacon/UpgradeableBeacon.sol";
+import { BeaconProxyFactory } from "contracts/tokenbridge/libraries/ClonableBeaconProxy.sol";
+
+contract YieldBearingBridgeTest is L1ArbitrumGatewayTest {
+    // gateway params
+    address public l2BeaconProxyFactory = makeAddr("l2BeaconProxyFactory");
+    bytes32 public cloneableProxyHash =
+        0x0000000000000000000000000000000000000000000000000000000000000001;
+
+    MasterVault public masterVault;
+    TestERC20 public underlyingToken;
+    UpgradeableBeacon public beacon;
+    BeaconProxyFactory public beaconProxyFactory;
+
+    function setUp() public virtual {
+        // fund router
+        vm.deal(router, 100 ether);
+        maxSubmissionCost = 70;
+        retryableCost = maxSubmissionCost + gasPriceBid * maxGas;
+
+        inbox = address(new InboxMock());
+
+        l1Gateway = new L1ERC20Gateway();
+        L1ERC20Gateway(address(l1Gateway)).initialize(
+            l2Gateway,
+            router,
+            inbox,
+            cloneableProxyHash,
+            l2BeaconProxyFactory
+        );
+
+        // master vault setup
+        underlyingToken = new TestERC20();
+        MasterVault implementation = new MasterVault();
+        beacon = new UpgradeableBeacon(address(implementation));
+        beaconProxyFactory = new BeaconProxyFactory();
+        beaconProxyFactory.initialize(address(beacon));
+
+        bytes32 salt = keccak256("yieldBearingBridge");
+        address proxyAddress = beaconProxyFactory.createProxy(salt);
+        masterVault = MasterVault(proxyAddress);
+        masterVault.initialize(
+            IERC20(address(underlyingToken)),
+            "Master Vault Token",
+            "mvToken",
+            address(this)
+        );
+
+        // bridging master vault shares
+        token = IERC20(address(masterVault));
+
+        // deposit underlying & move some master vault shares to gateway for withdrawal tests
+        vm.startPrank(user);
+        underlyingToken.mint();
+        uint256 initialDeposit = underlyingToken.balanceOf(user);
+        underlyingToken.approve(address(masterVault), initialDeposit);
+        masterVault.deposit(initialDeposit, user, 0);
+        token.transfer(address(l1Gateway), 100);
+        vm.stopPrank();
+    }
+
+    function test_outboundTransfer() public virtual override {
+        // snapshot state before
+        uint256 userBalanceBefore = token.balanceOf(user);
+        uint256 l1GatewayBalanceBefore = token.balanceOf(address(l1Gateway));
+
+        // retryable params
+        uint256 depositAmount = 300;
+        bytes memory callHookData = "";
+        bytes memory routerEncodedData = buildRouterEncodedData(callHookData);
+
+        // approve token
+        vm.prank(user);
+        token.approve(address(l1Gateway), depositAmount);
+
+        // event checkers
+        vm.expectEmit(true, true, true, true);
+        emit TicketData(maxSubmissionCost);
+
+        vm.expectEmit(true, true, true, true);
+        emit RefundAddresses(user, user);
+
+        vm.expectEmit(true, true, true, true);
+        emit InboxRetryableTicket(
+            address(l1Gateway),
+            l2Gateway,
+            0,
+            maxGas,
+            l1Gateway.getOutboundCalldata(address(token), user, user, depositAmount, callHookData)
+        );
+
+        vm.expectEmit(true, true, true, true);
+        emit DepositInitiated(address(token), user, user, 0, depositAmount);
+
+        // trigger deposit
+        vm.prank(router);
+        l1Gateway.outboundTransfer{ value: retryableCost }(
+            address(token),
+            user,
+            depositAmount,
+            maxGas,
+            gasPriceBid,
+            routerEncodedData
+        );
+
+        // check tokens are escrowed
+        uint256 userBalanceAfter = token.balanceOf(user);
+        assertEq(userBalanceBefore - userBalanceAfter, depositAmount, "Wrong user balance");
+
+        uint256 l1GatewayBalanceAfter = token.balanceOf(address(l1Gateway));
+        assertEq(
+            l1GatewayBalanceAfter - l1GatewayBalanceBefore,
+            depositAmount,
+            "Wrong l1 gateway balance"
+        );
+    }
+
+    function test_finalizeInboundTransfer() public override {
+        // fund gateway with master vault shares (for withdrawal test)
+        // deposit more underlying tokens and mint shares to gateway
+        vm.startPrank(user);
+        underlyingToken.mint();
+        uint256 depositAmount = underlyingToken.balanceOf(user);
+        underlyingToken.approve(address(masterVault), depositAmount);
+        masterVault.deposit(depositAmount, address(l1Gateway), 0);
+        vm.stopPrank();
+
+        // snapshot state before
+        uint256 userBalanceBefore = token.balanceOf(user);
+        uint256 l1GatewayBalanceBefore = token.balanceOf(address(l1Gateway));
+
+        // withdrawal params
+        address from = address(3000);
+        uint256 withdrawalAmount = 25;
+        uint256 exitNum = 7;
+        bytes memory callHookData = "";
+        bytes memory data = abi.encode(exitNum, callHookData);
+
+        InboxMock(address(inbox)).setL2ToL1Sender(l2Gateway);
+
+        // trigger withdrawal
+        vm.prank(address(IInbox(l1Gateway.inbox()).bridge()));
+        l1Gateway.finalizeInboundTransfer(address(token), from, user, withdrawalAmount, data);
+
+        // check tokens are properly released
+        uint256 userBalanceAfter = token.balanceOf(user);
+        assertEq(userBalanceAfter - userBalanceBefore, withdrawalAmount, "Wrong user balance");
+
+        uint256 l1GatewayBalanceAfter = token.balanceOf(address(l1Gateway));
+        assertEq(
+            l1GatewayBalanceBefore - l1GatewayBalanceAfter,
+            withdrawalAmount,
+            "Wrong l1 gateway balance"
+        );
+    }
+
+    function test_getOutboundCalldata() public override {
+        bytes memory outboundCalldata = l1Gateway.getOutboundCalldata({
+            _token: address(token),
+            _from: user,
+            _to: address(800),
+            _amount: 355,
+            _data: abi.encode("doStuff()")
+        });
+
+        bytes memory expectedCalldata = abi.encodeWithSelector(
+            ITokenGateway.finalizeInboundTransfer.selector,
+            address(token),
+            user,
+            address(800),
+            355,
+            abi.encode(
+                abi.encode(abi.encode("Master Vault Token"), abi.encode("mvToken"), abi.encode(18)),
+                abi.encode("doStuff()")
+            )
+        );
+
+        assertEq(outboundCalldata, expectedCalldata, "Invalid outboundCalldata");
+    }
+
+    ////
+    // Event declarations
+    ////
+    event DepositInitiated(
+        address l1Token,
+        address indexed _from,
+        address indexed _to,
+        uint256 indexed _sequenceNumber,
+        uint256 _amount
+    );
+    event TicketData(uint256 maxSubmissionCost);
+    event RefundAddresses(address excessFeeRefundAddress, address callValueRefundAddress);
+    event InboxRetryableTicket(address from, address to, uint256 value, uint256 maxGas, bytes data);
+}