> For the complete documentation index, see [llms.txt](https://docs.redacted.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.redacted.money/protocol/architecture.md).

# 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)](https://getfailsafe.com/pdfs/Redacted%20-%20FailSafe%20Security%20Report%20-%20Final.pdf)
* [FailSafe Audit Overview](https://getfailsafe.com/redacted-smart-contract-audit)