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Privacy Model

Shadow Vault delivers working privacy TODAY — not promises for tomorrow.

What's Working Right Now​

  • ✅ Deposit amounts hidden via SHA-256 commitment scheme
  • ✅ Withdrawals unlinkable to deposits via nullifier bitmap
  • ✅ Order details encrypted — only hashes visible on-chain
  • ✅ Policy limits stored as commitments (hidden values)
  • ✅ Double-spend prevention via nullifier tracking
  • ✅ Commitment accumulator for future membership proofs

What's Planned​

  • 🔲 FHE integration via Inco Network Lightning FHE SDK
  • 🔲 ZK proofs for policy compliance
  • 🔲 Merkle tree nullifier scaling (current: 1024 per vault)
  • 🔲 SPL token confidential transfers

The key insight: most "privacy" projects announce FHE and ZK as their core value prop — then deliver nothing working. Shadow Vault inverts this: ship real privacy primitives first, upgrade the crypto later.

The Privacy Spectrum​

No Privacy ◀─────────────────────────────────────▶ Full FHE
LevelAmount PrivacyLinkabilityOn-chain ComputationWorking Now?
Plaintext❌ None❌ Fully linkable✅ Full✅
Basic Mixers⚠️ Pooled⚠️ Timing attacks✅ Full⚠️ Fragile
Shadow Vault v0.2✅ Hidden✅ Unlinkable❌ Limited✅ YES
ZK + Commitments✅ Hidden✅ Unlinkable⚠️ Proof generation🔲 Future
Full FHE✅ Hidden✅ Unlinkable✅ On encrypted data❌ Not deployed

Shadow Vault sits in the pragmatic middle: proven crypto, honest about limits, clear upgrade path.

Honesty vs. Hype​

What Other Projects Claim​

ProjectClaimsReality
Shadow BookFHE infrastructure layerNo agent-focused privacy. Infrastructure without application.
LatticAFHE coprocessorNot deployed. Concept-stage only.
Generic "Privacy" ProjectsZK proofs, FHE, cutting-edge cryptoMost ship nothing working. Vaporware with whitepapers.

What Shadow Vault Delivers​

  • SHA-256 commitments — battle-tested, auditable, efficient
  • Nullifier bitmaps — simple, correct, upgradeable
  • No FHE pretense — honest about what works today
  • Real hiding of amounts, unlinking of withdrawals, encryption of order data

The honest path wins. A project that delivers real privacy with proven primitives beats a project that promises FHE and delivers nothing.

Technical Primitives​

SHA-256 Commitments​

commitment = SHA256(amount || secret)

The vault stores only the commitment hash. The actual amount and secret never hit the chain. The owner retains the secret for later proof of deposit.

Nullifier Bitmap​

Each withdrawal consumes a nullifier — a deterministic hash derived from the vault and a nonce. Once spent, the nullifier is marked in a bitmap. This prevents:

  • Double-withdrawal
  • Linking deposits to withdrawals
  • Transaction graph analysis

Current capacity: 1024 nullifiers per vault (expandable to Merkle trees in v0.3).

Policy Commitments​

Policy parameters (max order size, allowed tokens, spend limits) are stored as commitments rather than plaintext. The agent proves compliance without revealing the actual limits.

Future Upgrades​

v0.3 — ZK Policy Compliance​

Replace nullifier bitmaps with Merkle trees. Add ZK proofs that an order satisfies policy without revealing order details.

v0.4 — FHE Integration​

Integrate Inco Network's Lightning FHE SDK for encrypted computation on-chain. This enables:

  • Encrypted balance math
  • Private order matching
  • Hidden position sizing

v0.5 — Cross-Protocol Privacy​

Extend beyond single-vault privacy to private routing across DEXs, lending protocols, and perp markets.