Three Layer Architecture

GHOST separates concerns across three independent trust domains. Each layer has a distinct role, distinct data access, and distinct failure modes. This separation ensures that compromising any single layer cannot break the privacy or safety guarantees of the others.

Layer 1: Custody Layer

The custody layer is responsible for holding user funds. In the current implementation, this is the Chainlink Compliant Private Transfer vault deployed on Sepolia at 0xE588a6c73933BFD66Af9b4A07d48bcE59c0D2d13.

Responsibilities:

• Accept user deposits (on chain ERC20 transfers)
• Track shielded balances off chain within the vault
• Execute private transfers between shielded addresses
• Process withdrawals back to on chain balances

Key property: Funds can only move via user initiated actions (deposits, withdrawals) or valid DON signed reports (private transfers). The GHOST server cannot move funds directly.

Tokens supported: gUSD (synthetic USD stablecoin) and gETH (synthetic ETH) on Sepolia.

Layer 2: Blind Storage Layer

The GHOST API server acts as a "dumb blob store" for encrypted intents and protocol state. It is built with Hono on Bun and stores data in MongoDB.

Responsibilities:

• Store encrypted lend intents (cannot read the encrypted rates)
• Store borrow intents and match proposals
• Track pending transfers queued by the matching engine
• Maintain user balances, credit scores, and loan records
• Serve data to the CRE via authenticated internal endpoints

Key property: The server stores encrypted rate bids but possesses no decryption key. Even if the server is fully compromised, an attacker cannot learn any plaintext lending rates. The server is authenticated via x-api-key for internal CRE endpoints and via EIP 712 signatures for user facing endpoints.

Layer 3: Confidential Settlement Engine

Chainlink's CRE runs the core protocol logic inside a trusted execution environment. It is the only entity that can decrypt sealed rate bids.

Responsibilities:

• Decrypt ECIES encrypted rate bids using the CRE private key
• Run the matching engine to pair lenders with borrowers
• Generate match proposals and submit them to the server
• Execute fund transfers by signing private transfer requests through the vault
• Monitor collateral health using Chainlink price feeds
• Trigger liquidations for undercollateralized positions

Key property: The CRE private key exists only within the TEE and is protected by threshold signing across the DON (Decentralized Oracle Network). Rate bids are decrypted, processed, and discarded within a single execution cycle. No plaintext rate data persists after the matching epoch completes.

Data Flow

The typical lifecycle of a lending operation flows through all three layers:

1. User deposits tokens into the custody layer (on chain transaction)
2. User private transfers tokens to the GHOST pool shielded address (vault API)
3. Server records the deposit slot and associates it with the user's encrypted rate bid
4. CRE fetches pending intents from the server via ConfidentialHTTPClient
5. CRE decrypts rates inside the TEE, runs matching, and posts proposals back to the server
6. User accepts a proposal via EIP 712 signed request to the server
7. Server queues a transfer for the matched principal amount
8. CRE polls for pending transfers, signs them with the pool wallet, and submits to the vault
9. Vault executes the private transfer from pool to borrower's shielded address

Environment Configuration

Variable	Description	Default
MONGODB_URI	MongoDB connection string	mongodb://localhost:27017/ghost
POOL_PRIVATE_KEY	Pool wallet private key for signing transfers	Required
TOKEN_ADDRESS	gUSD token contract address	Required
CRE_PUBLIC_KEY	secp256k1 public key for ECIES encryption	Required
EXTERNAL_API_URL	Chainlink vault API base URL	convergence2026-token-api.cldev.cloud
EXTERNAL_VAULT_ADDRESS	Vault contract address	0xE588...
CHAIN_ID	Target chain ID	11155111 (Sepolia)
PORT	Server port	8080
INTERNAL_API_KEY	Authentication key for CRE internal endpoints	Required
ARBITRUM_RPC_URL	Arbitrum RPC for price feed reads	Required
ETH_USD_FEED	Chainlink ETH/USD feed address	Required
GETH_ADDRESS	Synthetic gETH token address	Required