> 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/using-redacted/how-it-works.md). # How It Works Redacted gives you a **Private Wallet** with two components — a **Private Reserve** (shielded reserve) and a **Spendable** balance (usable private funds). Together with a **Gas Tank** for swap fees, this creates a clean, simple structure for private DeFi. ## 1. Private Reserve (Shielded Reserve) The **Private Reserve** is the shared privacy pool where all user deposits are aggregated. When you deposit assets from your public wallet, they enter the Reserve alongside deposits from every other user. This co-mingling of funds creates your **privacy set** — the larger the pool and the more active users, the stronger your privacy. **What the Private Reserve does:** * Receives deposits from public wallets * Tracks balances using encrypted stealth addresses * Validates zero-knowledge proofs for all operations * Serves as the single entry and exit point for all funds > Think of it like a private vault at a bank — many people store funds in the same institution, and an outside observer cannot tell which safe deposit box belongs to whom. ## 2. Spendable (Private Balance) The **Spendable** balance is your personal, private execution account. When you're ready to interact with DeFi, you move funds from your Private Reserve to Spendable. From here, you can trade, swap, borrow, enter liquidity pools, bid on liquidations, and use any Rujira application — all without revealing your identity. **What the Spendable balance does:** * Holds funds ready for DeFi interactions * Executes transactions privately on your behalf * Interacts with any Rujira application (Trade, Perps, Liquidations, Index, Launchpad, Strategies) * Collects results (swap outputs, yields) back into your private balance **Important:** There is no direct path from Spendable to your Public Wallet. Funds must always return through the Private Reserve first. This enforces the privacy model and ensures compliance. ## 3. Gas Tank The **Gas Tank** is a dedicated RUNE reserve that pays for swap fees on transactions that route through THORChain's base layer. Other actions within Redacted are gasless. * **RUNE only** — Only accepts RUNE denomination * **Swaps only** — Covers the \~0.02 RUNE swap fee per transaction * **Other actions don't require gas** — Deposits, moving to Spendable, moving back to Reserve are gasless * **Funded from your Public Account** — Deposit RUNE into your Gas Tank directly > Fund your Gas Tank with RUNE to enable private swaps. Non-swap actions like deposits and internal transfers don't require gas. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.redacted.money/using-redacted/how-it-works.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.