diff --git a/src/ape/managers/project.py b/src/ape/managers/project.py
index e4ea3b0b85..a437743970 100644
--- a/src/ape/managers/project.py
+++ b/src/ape/managers/project.py
@@ -774,12 +774,19 @@ def _unpack(self, path: Path, tracked: set[str]) -> Iterator["Dependency"]:
 
         if not folder.is_dir():
             # Not yet unpacked.
-            contracts_folder_id = get_relative_path(
-                self.project.contracts_folder, self.project.path
-            )
-            destination = folder / contracts_folder_id
-            destination.parent.mkdir(parents=True, exist_ok=True)
-            shutil.copytree(self.project.contracts_folder, destination)
+            if isinstance(self.project, LocalProject):
+                contracts_folder_id = get_relative_path(
+                    self.project.contracts_folder, self.project.path
+                )
+                destination = folder / contracts_folder_id
+                destination.parent.mkdir(parents=True, exist_ok=True)
+                if self.project.contracts_folder.is_dir():
+                    shutil.copytree(self.project.contracts_folder, destination)
+
+            else:
+                # Will create contracts folder from source IDs.
+                folder.parent.mkdir(parents=True, exist_ok=True)
+                self.project.manifest.unpack_sources(folder)
 
         # self is done!
         yield self
diff --git a/src/ape_pm/projects.py b/src/ape_pm/projects.py
index 3159235c37..9c6dd652e8 100644
--- a/src/ape_pm/projects.py
+++ b/src/ape_pm/projects.py
@@ -149,7 +149,7 @@ def extract_config(self, **overrides) -> "ApeConfig":
         # Handle root project configuration.
         # NOTE: The default contracts folder name is `src` in foundry
         #  instead of `contracts`, hence the default.
-        ape_cfg["contracts_folder"] = root_data.get("src", "src")
+        ape_cfg["contracts_folder"] = root_data.get("src")
 
         # Used for seeing which remappings are comings from dependencies.
         lib_paths = root_data.get("libs", ("lib",))
@@ -173,6 +173,9 @@ def extract_config(self, **overrides) -> "ApeConfig":
             solidity_data["optimize"] = root_data["optimizer"]
         if runs := solidity_data.get("optimizer_runs"):
             solidity_data["optimization_runs"] = runs
+        if evm_version := root_data.get("evm_version"):
+            solidity_data["evm_version"] = evm_version
+
         if soldata := solidity_data:
             ape_cfg["solidity"] = soldata
 
diff --git a/tests/functional/test_dependencies.py b/tests/functional/test_dependencies.py
index 036010b1ee..f9bcd1ed92 100644
--- a/tests/functional/test_dependencies.py
+++ b/tests/functional/test_dependencies.py
@@ -262,9 +262,17 @@ def test_unpack(project_with_downloaded_dependencies):
 def test_unpack_dependencies_of_dependencies(project, with_dependencies_project_path):
     dep = project.dependencies.install(local=with_dependencies_project_path, name="wdep")
     with create_tempdir() as tempdir:
-        dep.unpack(tempdir)
+        list(dep.unpack(tempdir))
+        subdirs = [x.name for x in tempdir.iterdir() if x.is_dir()]
+        assert "sub-dependency" in subdirs
 
-        # TODO: Check for dependency of dependency!
+
+def test_unpack_no_contracts_folder(project, with_dependencies_project_path):
+    dep = project.dependencies.install(local=with_dependencies_project_path, name="wdep")
+    with create_tempdir() as tempdir:
+        list(dep.unpack(tempdir))
+        subdirs = [x.name for x in tempdir.iterdir() if x.is_dir()]
+        assert "empty-dependency" in subdirs
 
 
 class TestPackagesCache:
diff --git a/tests/functional/test_project.py b/tests/functional/test_project.py
index a891d8eb5e..731163fbd8 100644
--- a/tests/functional/test_project.py
+++ b/tests/functional/test_project.py
@@ -582,6 +582,7 @@ def toml(self):
 out = 'out'
 libs = ['lib']
 solc = "0.8.18"
+evm_version = 'cancun'
 
 remappings = [
     'forge-std/=lib/forge-std/src/',
@@ -630,6 +631,7 @@ def test_extract_config(self, toml, gitmodules, mock_github):
                 "@openzeppelin/=openzeppelin-contracts/",
             ]
             assert actual_sol["version"] == "0.8.18"
+            assert actual_sol["evm_version"] == "cancun"
 
             # Ensure dependencies migrated from .gitmodules.
             assert "dependencies" in actual, "Dependencies failed to migrate"
diff --git a/tests/integration/cli/projects/with-dependencies/ape-config.yaml b/tests/integration/cli/projects/with-dependencies/ape-config.yaml
index 98aa93ea92..3e597fe8c4 100644
--- a/tests/integration/cli/projects/with-dependencies/ape-config.yaml
+++ b/tests/integration/cli/projects/with-dependencies/ape-config.yaml
@@ -20,3 +20,6 @@ dependencies:
 
   - name: manifest-dependency
     local: ./manifest_dependency.json
+
+  - name: empty-dependency
+    local: ./empty_dependency
diff --git a/tests/integration/cli/projects/with-dependencies/empty_dependency/README.md b/tests/integration/cli/projects/with-dependencies/empty_dependency/README.md
new file mode 100644
index 0000000000..5df0bb166d
--- /dev/null
+++ b/tests/integration/cli/projects/with-dependencies/empty_dependency/README.md
@@ -0,0 +1 @@
+# For testing anything with a dependency with no contracts.