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By Confidential Transfers and Balances

Private & compliant payments on Stellar

SCF #40
$150.0K
Build
Test Transaction
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Stellar builders can add confidential amounts/balances with selective disclosure for compliance without reinventing encryption

Products & Services

1. Confidential Stablecoins: Transfer amounts and balances are encrypted. Addresses stay transparent for composability. Selective disclosure for compliance. Result: bank-like privacy, institutional-grade compliance, and better execution.

2. Developer kit for Soroban: contracts and lightweight client SDK to encrypt on the frontend and verify onchain (no new wallet required).

We’ve shipped multiple confidential apps (cApps) already: fixed-rate lending powered by leaderless sealed-bid auctions called Fairates, encrypted limit orders with CowSwap, and “Time Machine” encrypted bid predictions to name a few. We build developer tooling so teams don’t have to reinvent cryptography and they can focus on what they do best.

Soroban

Maybe in the future, but not in this submission

Requested Budget

$150.0K

Success Criteria

MVP: Goal is to prove the full confidential transfer flow works on Stellar through a working demo:

  • Create test accounts with confidential amounts stored in a Soroban contract

  • Run the deposit-transfer-withdrawal flow (the full product loop)

  • Perform one selective disclosure for a single transaction

Testnet: Goal is to prove builders can use it 

  • Adoption by builders: 5+ teams integrate our solution

  • User activity: 1000+ unique wallets execute 1 or more confidential transfers

Mainnet: Goal is to prove utility across payments, institutional, and retail flows

  • Live partners: 3 production integrations

  • Usage: 100k confidential transfers (number to be determined in consultation with SDF)

  • Compliance in practice: 1 public case study of selective disclosure performed by an auditor

Go-To-Market Plan

Who we are targeting for design partners and why: 

  • 1-2 wallets (e.g. Freighter, LOBSTR): fastest path to daily payments MAUs

  • 1 payments processor (e.g. MoneyGram): concentrates cross-border volume and merchant flows

  • 1 RWA issuer (e.g. Ondo). Institutional, compliance-friendly usage that unlocks large transaction volumes 

What we are offering: confidential payments and transfers with selective disclosure, starting with the co-processor path (fast, low lift), then executing a fully onchain integration.

Why this fits SDF: Payments and RWAs first which directly aligns with SDF OKRs.

How our GTM drives SDF’s OKRs:

  1. 5M MAU for payments (primary): make confidential transfers opt-in and configurable for wallets/processors so users and merchants stop leaking pricing, salaries, and invoices. Privacy becomes a reason to use Stellar payments daily.

  2. $3B RWAs (secondary): confidentiality unlocks institutional flows who need selective disclosure and can’t leak deal sizes and balances publicly. Our per-transaction audit model maps to their policies.

  3. Top-10 DeFi TVL (adjacent): once payments and RWAs are live, confidential balances let market makers and LPs quote tighter, reduce leakage, and improve capital efficiency across Stellar DeFi. This supports primitive parity and differentiation.

Distribution:

  1. Work with wallets, payment processors, and RWA issuers active in the Stellar ecosystem to integrate confidential payments and balances. Prioritize builders with whom SDF already engages.

  2. Publish open-source templates (sample Soroban contracts and demos) so new projects can easily build a working confidential transfer flow

Traction Evidence

  1. Shipped confidential applications (cApps) on our chain, FairyRing, and EVM. See here: https://www.fairblock.network/cApps

    • MVP: Confidential Stablecoins

    • Testnet: Fairates (fixed rate lending), Time Machine (predictions/nano-options app), FairyCow (encrypted swaps on top of CowSwap), Verified Randomness, Onchain Time Bomb (gaming)

  2. Network usage: 66M+ cumulative transactions (including encrypted tx, plaintext transfers, faucet tx, key gen/shares, decryptions) and 2.8M+ encrypted transactions across public testnets

    • Highest weekly active users (WAU): 32,772

    • Power users (defined as WAU with 5+ tx): 43%

Link to dashboard: https://docs.google.com/spreadsheets/d/e/2PACX-1vQNzqdy-mp67RWCr_4lE6cbMg6EaF5EUjcqY97fBKEJCkTKLR2L6cSnS6bnAoJQNT1zeV3_t3LFVULc/pubhtml?gid=1715037745&single=true

Tranche 1 (Deliverable Roadmap) - MVP

Tranche 1 - MVP Budget: $80k Completion: 12 weeks

1. Coprocessor ($30k)

  • Implement additively homomorphic ElGamal for amounts/balances; define ciphertext/keys; range + conservation + non-negative proofs; threshold IBE with policy-gated decryption.
  • Define roles (user/auditor/emergency), relayer keys, and audit request flow (onchain request; off-chain share aggregation).

2. Cross-chain communication: FairyRing <-> FairyPort <-> Stellar ($20k)

  • Specify “ConfidentialTransferEnvelope” (ids, payload, asset, nonce, integrity).
  • Build FairyPort relayer (event subscribe, envelope build, idempotent submit, replay checks, logging); add msg verification hooks.

3. Soroban smart contract deployment ($20k)

  • Escrow contract: lock asset; map Stellar <-> confidential acct; deposit/transfer/withdraw and response handlers; emit indexable events.
  • Entrypoints for FairyPort submission (deposit/transfer/withdraw_envelope).

4. End-to-end flow ($10k)

  • Working pipeline: Stellar action -> FairyPort -> FairyRing -> FairyPort -> Soroban; demo deposit, confidential transfer, withdraw back to visible Stellar balance

Tranche 2 (Deliverable Roadmap) - Testnet

Tranche 2 - Testnet Budget: $40k Completion 7 weeks

1. End-to-end testnet deployment ($10k)

  • Deploy FairyRing (testnet configuration), Soroban escrow, public RPCs. Implement rate limits, circuit breakers, and monitoring for relayer

2. Functional end-to-end demo ($10k)

  • Build a “happy path” (deposit -> transfer -> withdraw -> reconcile) and edge cases (invalid proof, insufficient balance, replay, stale nonce, wrong asset)
  • Provide demo scripts and CLI: Keygen, encrypt, prove, submit tx to Stellar

3. Technical/developer documentation and user guides ($10k)

  • Architecture diagrams; threat model & trust; what’s onchain vs. trusted; data format schemas
  • APIs for create/deposit/transfer/withdraw/query; wallet integration guides
  • Steps for account link, deposit, private transfer, withdraw; screenshots/CLI examples

4. Test coverage, QA, and security scanning ($10k)

  • Unit tests (Soroban, FairyRing), integration tests (local instances), property-based/fuzz (ranges/serialization); performance baselines
  • Run static analysis (contracts, coprocessor, relayer), fix critical/high security issues, document findings/mitigations/residual risks

5. Frontend/client tooling for ZK/HE Minimal web/client library for encrypt/prove, wallet/RPC hookup, reference TypeScript/Rust helper functions.

Tranche 3 (Deliverable Roadmap) - Mainnet

Tranche 3 - Mainnet Budget: $30k Completion: 5 weeks (timeline depends on the security audit)

1. Security & audit preparation

  • Code freeze and hardening, reproducible builds, audited scope locked

2. Formal security review preparation

  • Audit-ready spec (protocol, state diagrams, invariants), test harnesses, example attacks, in/out-of-scope list.

3. Security audit (credits via LaunchKit)

  • Audit Soroban, cross-chain validation/relayer, and crypto integration, remediate and document residual risks.

4. Post-audit docs & guides

  • Publish final technical spec, updated threat model, audit summary, and developer docs.

5. Mainnet deployment

  • Deploy audited escrow, initialize parameters via multisig/gov; FairyRing/FairyPort production setup with monitoring/failover; public demo (deposit, confidential transfer, withdraw) and verification instructions

Team

  1. Peyman Momeni, Founder and CEO

https://www.linkedin.com/in/peyman-m-b0681b128/

Prev: Cryptography and DeFi @ UWaterloo, ZK Engineer ZKM, privacy-preserving ML HKUST, Snap

  1. James Bae, Head of Business 

https://www.linkedin.com/in/baejames/

Prev: Led BD at Eigen Labs and Component, and Sales/Partnerships Leader at Oracle, Nielsen, startups.

  1. Setareh Ghorshi,  Cryptography and DeFi Engineer

https://www.linkedin.com/in/setareh-ghorshi/

Prev: Security @ QuantStamp, UWaterloo

  1. Nibir Pal, Lead Engineer

https://www.linkedin.com/in/nibir-pal-188344b2/

Prev: Osmosis, Six Sigma Sports

  1. Martin Cheuk, Blockchain and Infra Engineer

https://www.linkedin.com/in/chung-kiu-martin-cheuk-355a0b185/

Prev: Gin Finance, Genesis Node Ltd

  1. Suman Das, Frontend Engineer

https://github.com/orgs/Fairblock/people/suman-saurabh-das

  1. Crispz, Community Lead

https://x.com/crispzlegion

Prev: The Dapp List

  1. Darshita, Designer

https://x.com/darshitap07

Peyman graduated with a Master’s of Computer Science in Cryptography, Security, and Privacy from the University of Waterloo. During his thesis under the supervision of Sergey Gorbunov (Founder and CEO of Axelar), he completed extensive research on applied cryptography, privacy, and blockchain Maximal Extractable Value (MEV). He has surveyed the trade-offs of harmful MEV prevention methods and published his thesis and two academic papers (one accepted and one under review) on using identity-based encryption and threshold cryptography to protect user transactions in various blockchain architectures. He also leads the R&D team of the  UWaterloo Blockchain Club, and has previous industry experience in advanced cryptography, specifically Zero-Knowledge Virtual Machines (zkVMs). 

Peyman has published numerous papers on cryptography, which can be viewed here: 

https://scholar.google.com/citations?user=5DeL1bUAAAAJ&hl=en 

James is a seasoned GTM veteran. He recently led Business Development at Eigen Labs, partnering with founders and driving growth for the EigenLayer AVS ecosystem. He previously built GTM functions at Component, a DeFi R&D startup. Before pivoting into web3, James spent 10+ years in tech running enterprise SaaS/data sales and partnerships at startups and large enterprises, including as a founding member of the Partner Development team at Oracle's CX Division. With roots in academic research, James is a published co-author of 11 original papers in neuroscience, anesthesiology, and orthopedics <https://pubmed.ncbi.nlm.nih.gov/?term=james+j+bae>

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James-Fairblock

James - Fairblock

Project Stats

Team Size
8
Project Type
Payments
Category
Developer Tooling
Total awarded
$150.0K*
Awarded Submissions
0

Other Submissions

No other submissions.