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Encrypted ERC-20 Protocol

The Encrypted ERC-20 (eERC) standard enables secure and confidential token transfers on Avalanche blockchains. Leveraging zk-SNARKs and partially homomorphic encryption, the eERC protocol offers robust privacy without requiring protocol-level modifications or off-chain intermediaries.

AvaCloud API documentation can be found here.

Key features

• Confidential Transactions: User balances and transaction amounts remain completely hidden, ensuring financial privacy.
• Large Integers: Efficiently handles token amounts up to 128 bits (2^128), accommodating substantial financial transactions.
• Client-Side Operations: Users retain control, performing encryption, decryption, and zk-proof generation directly on their own devices.
• Fully On-chain Nature: Operates entirely on-chain without the need for relayers or off-chain actors.
• Built-in Compliance: Supports external auditors, ensuring regulatory compliance.

File structure

• contracts Smart contract source files
• scripts Utility and deployment scripts
• src Encryption utilities for TypeScript
• tests Test scripts and helpers
• zk Gnark-based implementations of zero-knowledge proof components

Getting Started

Prerequisites

You need following dependencies for setup:

• NodeJS >= v16.x
• Golang >= 1.23.x

Installation

1. Clone the repo

   git clone https://github.com/ava-labs/EncryptedERC.git

2. Install NPM packages

   npm install

   Note: This command will run a bash script to compile gnark's circuits, if this does not work: In zk directory run the following command to build manually:

   make

   or

   go build -o ./build/encryptedERC ./cmd/

3. Compile the contracts

   npx hardhat compile

Deployment (Local)

Standalone

The Standalone version lets users create entirely new private ERC-20 tokens with built-in privacy, supporting confidential minting and burning.

1. Start the local node

npx hardhat node

2. Deploy the contract

npx hardhat run scripts/deploy-standalone.ts --network localhost

Refer to the scripts/deploy-standalone.ts script for deployment examples.

Converter

The Converter version adds privacy features to existing ERC-20 tokens, enabling users to convert standard ERC-20 tokens to private ones and switch between public and private states through deposit and withdrawal functions.

1. Start the local node

npx hardhat node

2. Deploy the contract

npx hardhat run scripts/deploy-converter.ts --network localhost

Refer to the scripts/deploy-converter.ts script for deployment examples.

Run Tests/Coverage

Contract tests:

npx hardhat coverage

📊 Performance Overview

⛽ Avg. On-Chain Gas Costs (C-Chain Mainnet)

·················································································································
|  Solidity and Network Configuration                                                                           │
····························|·················|···············|·················|································
|  Solidity: 0.8.27         ·  Optim: true    ·  Runs: 200    ·  viaIR: false   ·     Block: 30,000,000 gas     │
····························|·················|···············|·················|································
|  Network: AVALANCHE       ·  L1: 1 gwei                     ·                 ·        21.91 usd/avax         │
····························|·················|···············|·················|················|···············
|  Contracts / Methods      ·  Min            ·  Max          ·  Avg            ·  # calls       ·  usd (avg)   │
····························|·················|···············|·················|················|···············
|  EncryptedERC             ·                                                                                   │
····························|·················|···············|·················|················|···············
|      deposit              ·         71,842  ·      841,926  ·        565,079  ·            16  ·        0.01  │
····························|·················|···············|·················|················|···············
|      privateBurn          ·        872,327  ·    1,209,788  ·      1,010,477  ·             4  ·        0.02  │
····························|·················|···············|·················|················|···············
|      privateMint          ·        704,167  ·      752,463  ·        713,839  ·            10  ·        0.02  │
····························|·················|···············|·················|················|···············
|      setAuditorPublicKey  ·              -  ·            -  ·        103,800  ·             4  ·           -  │
····························|·················|···············|·················|················|···············
|      setTokenBlacklist    ·              -  ·            -  ·         46,443  ·             1  ·           -  │
····························|·················|···············|·················|················|···············
|      transfer             ·        929,453  ·      929,477  ·        929,469  ·             6  ·        0.02  │
····························|·················|···············|·················|················|···············
|      withdraw             ·        764,964  ·      820,100  ·        786,662  ·             6  ·        0.02  │
····························|·················|···············|·················|················|···············
|      register             ·        315,948  ·      316,008  ·        315,985  ·            20  ·        0.01  │
····························|·················|···············|·················|················|···············

⏱️ Circuit Benchmarks for Proof Generation

Tested on M3 Pro CPU:

Operation	Proving Time
Registration	71 ms
Private Mint	359 ms
Private Burn	360 ms
Private Transfer	606 ms