How It Works
Private eligibility trading with verifiable enforcement
Overview
CloakSwap enables compliant trading of tokenized RWAs (Real-World Assets) like gGOLD on Uniswap v4, with privacy-preserving eligibility checks. Users prove eligibility through encrypted credentials without exposing sensitive data onchain.
1. User Onboarding
- User enters non-PII attributes: region, accredited status, max trade bucket, expiry
- Browser encrypts attributes into a bitmap using Zama fhevmjs (client-side)
- Encrypted ciphertext + expiry stored onchain in UserRegistry
- No plaintext attributes are ever stored onchain
2. Compliance Enforcement
- Uniswap v4 Hook intercepts swap attempts in
beforeSwap - Hook reads encrypted profile from UserRegistry
- FHEVerifier checks:
(userBitmap & ruleMask) == ruleMask - If eligible: swap proceeds ✅
- If not eligible: swap reverts with reason code ❌
- Hook emits
ComplianceCheckevent for audit trail
3. Cross-Chain Funding
- Users can deposit funds from any EVM chain via LI.FI Composer
- Route: swap (if needed) → bridge → optional contract call
- Step-by-step execution with receipts for each transaction
- Handles slippage, errors, and gas estimation
4. ENS Identity & Preferences
- ENS names displayed for users and issuers
- Trading preferences stored as ENS text records:
cloakswap:preferredChain,cloakswap:preferredToken - Preferences prefill deposit flows and personalize UX
Privacy Model
✅ Onchain (Public)
- • Encrypted ciphertext (bytes)
- • Expiry timestamp (uint64)
- • Pool rule mask (uint256)
- • ComplianceCheck events (pass/fail + reason)
✅ Not Onchain (Private)
- • Region (plaintext)
- • Accredited status (plaintext)
- • Max trade bucket (plaintext)
- • User bitmap (plaintext)
Reason Codes
Threat Model
What we protect: User's compliance attributes (region, accredited status, limits) are never exposed onchain. Only encrypted ciphertext is stored.
What we reveal: Pass/fail result and reason codes are public for auditability. This is necessary for transparent compliance enforcement.
Verifiability: All hook decisions are recorded in ComplianceCheck events, making the system auditable without revealing private data.
Bounty Alignment
✅ Uniswap v4 Privacy DeFi
Hook-based privacy-enhancing market structure. Eligibility stored as ciphertext only. Hook enforces compliance deterministically. All decisions verifiable via events.
✅ LI.FI Integration
"Deposit from anywhere" flow supporting 2+ EVM chains. Route execution with step receipts. Error handling and slippage management.
✅ ENS
ENS name resolution for users and issuers. Creative use: trading preferences stored as ENS text records for portable UX across dApps.