Architecture

System Overview

┌──────────────────┐                    ┌──────────────────────────────────┐
│   Public Wallet   │──── Deposit ─────→│        Private Reserve           │
│  (on-chain addr)  │←─── Withdraw ─────│     (Shared Privacy Layer)       │
└──────────────────┘                    │                                  │
                                        │  • Aggregates all deposits       │
                                        │  • Encrypted stealth addresses   │
                                        │  • ZK proof verification         │
                                        │  • Balance ledger                │
                                        └──────────┬───────────────────────┘
                                                   │
                                        Make Spendable / Move to Reserve
                                                   │
                                        ┌──────────▼───────────────────────┐
                                        │    Spendable (Private Balance)    │
                                        │                                  │
                                        │  • Isolated execution env        │
                                        │  • Private DeFi interactions     │
                                        │  • Fee deduction (15 bps)        │
                                        │  • Cannot call Reserve           │
                                        └──────────┬───────────────────────┘
                                                   │
                                          Execute / Interact
                                                   │
                                        ┌──────────▼───────────────────────┐
                                        │     Rujira Applications           │
                                        │                                  │
                                        │  Trade • Perps • Liquidations    │
                                        │  Index • Borrow • Launchpad     │
                                        │  Strategies • Staking            │
                                        └──────────────────────────────────┘

                    ┌──────────────────────────────────────┐
                    │          Gas Tank (RUNE)              │
                    │  • ~0.02 RUNE per swap                │
                    │  • Funded from Public Account         │
                    │  • Only needed for swaps/sends        │
                    └──────────────────────────────────────┘

Smart Contract Architecture

Redacted is built with CosmWasm on Rujira and consists of three components:

Component	Role
Private Reserve (Proxy Contract)	Central privacy pool. Handles deposits, withdrawals, balance tracking, stealth address encryption, and ZK proof verification
Spendable (Sub-Wallet Contract)	Isolated execution environment for each user. Handles DeFi interactions, fee collection, and private transaction execution
Protocol Package	Shared cryptographic library containing Groth16 ZK verification, elliptic curve operations, and common types

Security Properties

• Spendable accounts can only be called by the Private Reserve — No external contract can trigger your Spendable account

• Spendable accounts cannot call the Reserve — Prevents reentrancy attacks

• Spendable accounts cannot call other Spendable accounts — Full isolation between users

• Every sensitive operation requires a ZK proof — Creating a Spendable account, funding it, executing trades, withdrawing

Zero-Knowledge Proofs

Redacted uses Groth16 zk-SNARKs (on the BN254 elliptic curve) to let you prove you're authorized to perform an action — without revealing who you are.

Every sensitive action requires a proof:

Action	What the Proof Validates
Create Spendable account	You own the stealth address
Fund Spendable	You own the Reserve balance and are authorized to move it
Execute trade/swap	You own the Spendable account and authorize this specific transaction
Withdraw	You own the Reserve balance and authorize withdrawal to this address

What ZK Proofs Do NOT Hide

• Pool balances — Total Reserve balances are visible on-chain

• Trade execution — Swaps execute through THORChain with standard visibility

• Transaction timing — All operations have visible timestamps

• Transaction amounts — Deposit and withdrawal amounts are public

ZK proofs enforce authorization without revealing identity. They prove "I am allowed to do this" without revealing "I am the person who deposited X at time Y."

Technical Specifications

Parameter	Value
Stealth address length	64 hex characters (32 bytes)
Encryption algorithm	AES-256-CBC
Hash function	SHA-256
ZK proof system	Groth16 (BN254 curve)
Protocol fee	15 bps (0.15%) per interaction
Gas Tank denomination	RUNE only
Swap fee	~0.02 RUNE per transaction

Built With

• CosmWasm — Smart contract framework for Cosmos-based chains

• Rust — Systems programming language for contract development

• Rujira — THORChain's omnichain application layer

• Groth16 — Zero-knowledge proof system for efficient on-chain verification

• BN254 — Elliptic curve for pairing-based cryptography

Security Audits

Audit	Auditor	Date	Scope
Rujira Smart Contract Audit	FailSafe	January–February 2026	Proxy contract, Sub-Wallet contracts, Protocol Package on Rujira
Terra Mixer Contract Audit	SCV-Security	September 2022	Original mixer contracts on Terra

The FailSafe audit covered the full Redacted smart contract suite deployed on Rujira — including the Private Reserve (Proxy), Spendable (Sub-Wallet), and shared Protocol Package. 9 findings were identified (1 High, 1 Low, 7 Informational), with all critical issues resolved.

• FailSafe Audit Report (PDF)

• FailSafe Audit Overview