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pattern-private-vaults.md

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title Pattern: Private Intent-Based Vaults
status draft
maturity PoC
works-best-when
Institutions or funds need private strategy execution while assets remain transparently custodied.
Strategies are automated or intent-driven and should not leak parameters to competitors.
avoid-when
Full on-chain transparency of strategy or yield composition is a regulatory requirement.
Low gas environments or limited privacy infra availability.
dependencies
ERC-20
ERC-7573
EAS
Zama FHE SDK
Oracles

Intent

Enable institutional or DeFi actors to express trading or allocation intents that are executed by a vault privately — hiding strategy parameters, order flow, and risk exposure while keeping deposited assets auditable and redeemable.

Ingredients

  • Standards: ERC-20 (underlying asset), optional ERC-7573 (atomic execution), EAS (attestations / audit proofs).
  • Infra: Private L2 or FHE-enabled chain (e.g., Zama, Fhenix).
  • Off-chain Services: Intent relayers / solvers, strategy engine, compliance oracles, and KMS for encrypted strategy data.

Protocol

  1. Deposit: User or institution deposits assets into an intent-based vault (ERC-20 wrapper).
  2. Intent submission: Depositor submits an encrypted intent (target allocation, yield strategy, or hedging goal).
  3. Solver/engine: Off-chain or enclave executor decrypts or partially computes the intent to generate an execution plan.
  4. Execution: Vault executes trades or allocations privately on a privacy L2 or FHE runtime.
  5. Settlement: Results (profits/losses) are reflected on-chain; only aggregate state is public.
  6. Audit: Regulator or auditor can verify correctness via viewing key or EAS-logged disclosure.

Guarantees

  • Privacy: Strategy logic and parameters remain hidden; vault asset balances visible.
  • Integrity: Intents are cryptographically signed and cannot be altered by solvers.
  • Auditability: Regulator or LP can verify execution authenticity without revealing details.

Trade-offs

  • Performance: FHE or privacy L2 introduces latency and higher gas cost.
  • Complexity: Requires secure off-chain computation and intent relayer coordination.
  • Risk: Misconfigured access control or key leakage may expose strategy data.

Example

  • A fund deposits USDC into a private intent-based vault.
  • It submits an encrypted intent: “allocate 60% to ETH yield strategy, 40% to staked T-Bills.”
  • The vault solver computes trades privately via Zama FHE and executes them.
  • On-chain, only total AUM and performance metrics are visible.
  • Auditor verifies correctness via an EAS-logged proof without seeing strategy composition.

See also