solutionSpec.md

hook-pkg/cofhe-haas: CoFHE IP Protection Solution Specification

Problem Description

Hook developers face IP theft risk because:

• Deployed bytecode is publicly readable
• Decompilation reveals algorithmic logic
• Competitors can copy and redeploy without compensation
• Premium algorithms (MEV protection, IL mitigation) lose competitive advantage

Solution Overview

The CoFHE (Confidential FHE) subsystem provides IP protection through Fhenix encryption:

flowchart TB
    subgraph Context["CoFHE HaaS Context"]
        CoFHEHook["CoFHEHook<br/>(IHooks Wrapper)"]
        CoFHEHookMod["CoFHEHookMod<br/>(Encrypted Logic)"]
        EncryptedState["Encrypted State<br/>(euint256, eaddress, etc.)"]
    end

    PoolManager["Uniswap V4 PoolManager"] -->|"plaintext params"| CoFHEHook
    CoFHEHook -->|"encrypted params"| CoFHEHookMod
    CoFHEHookMod -->|"encrypted state"| EncryptedState
    CoFHEHookMod -->|"encrypted result"| CoFHEHook
    CoFHEHook -->|"decrypted result"| PoolManager

    Developer["Hook Developer"] -->|"setHookMod"| CoFHEHook
    Developer -->|"setVerifierAuthorization"| CoFHEHook
    AVSVerifier["AVS Verifier"] -->|"authorized access"| CoFHEHook

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Component Responsibilities

Contract	Source	Responsibility
CoFHEHook	src/hook-pkg/CoFHEHook.sol	IHooks interface, encryption/decryption boundary
ICoFHEHookMod	src/hook-pkg/interfaces/ICoFHEHookMod.sol	Encrypted callback interface
ICoFHETypes	src/hook-pkg/interfaces/ICoFHETypes.sol	Encrypted type definitions

Encryption Architecture

flowchart LR
    subgraph Plaintext["Plaintext Layer"]
        PoolKey["PoolKey"]
        SwapParams["SwapParams"]
        BalanceDelta["BalanceDelta"]
    end

    subgraph Encrypted["Encrypted Layer (Fhenix)"]
        EPoolKey["EPoolKey"]
        ESwapParams["ESwapParams"]
        EBalanceDelta["EBalanceDelta"]
    end

    subgraph FHETypes["Fhenix Types"]
        euint32["euint32"]
        euint128["euint128"]
        euint256["euint256"]
        eaddress["eaddress"]
        ebool["ebool"]
    end

    PoolKey -->|"_encryptPoolKey"| EPoolKey
    SwapParams -->|"_encryptSwapParams"| ESwapParams
    BalanceDelta -->|"_encryptBalanceDelta"| EBalanceDelta

    EPoolKey --> euint32 & eaddress
    ESwapParams --> ebool & euint256
    EBalanceDelta --> euint128

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Encrypted Type Definitions

// Encrypted PoolKey
struct EPoolKey {
    eaddress currency0;
    eaddress currency1;
    euint32 fee;         // uint24 -> euint32
    euint32 tickSpacing; // int24 -> euint32
    eaddress hooks;
}

// Encrypted SwapParams
struct ESwapParams {
    ebool zeroForOne;
    euint256 amountSpecified; // int256 stored as magnitude
    euint256 sqrtPriceLimitX96;
}

// Encrypted ModifyLiquidityParams
struct EModifyLiquidityParams {
    euint32 tickLower;
    euint32 tickUpper;
    euint256 liquidityDelta;
    euint256 salt;
}

// Encrypted BalanceDelta
struct EBalanceDelta {
    euint128 amount0;
    euint128 amount1;
}

// Encrypted BeforeSwapDelta
struct EBeforeSwapDelta {
    euint128 deltaSpecified;
    euint128 deltaUnspecified;
}

Callback Flow

sequenceDiagram
    participant PM as PoolManager
    participant Hook as CoFHEHook
    participant Mod as CoFHEHookMod
    participant FHE as Fhenix FHE

    PM->>Hook: beforeSwap(sender, key, params, data)

    Note over Hook: Encryption Phase
    Hook->>FHE: FHE.asEaddress(sender)
    FHE-->>Hook: eaddress sender
    Hook->>FHE: _encryptPoolKey(key)
    FHE-->>Hook: EPoolKey
    Hook->>FHE: _encryptSwapParams(params)
    FHE-->>Hook: ESwapParams

    Hook->>Mod: beforeSwap(eSender, eKey, eParams, data)
    Note over Mod: Encrypted computation<br/>(logic hidden)
    Mod-->>Hook: (selector, EBeforeSwapDelta, euint32 fee)

    Note over Hook: Decryption Phase
    Hook->>FHE: FHE.decrypt(eDelta)
    FHE-->>Hook: BeforeSwapDelta
    Hook->>FHE: FHE.decrypt(eFee)
    FHE-->>Hook: uint24 fee

    Hook-->>PM: (selector, delta, fee)

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Authorization Model

flowchart TB
    subgraph Access["Access Control"]
        Developer["developer<br/>(immutable)"]
        Verifiers["authorizedVerifiers<br/>(mapping)"]
    end

    subgraph Actions["Authorized Actions"]
        SetMod["setHookMod()"]
        SetAuth["setVerifierAuthorization()"]
        StateAccess["Decrypt state access"]
    end

    Developer -->|"onlyDeveloper"| SetMod
    Developer -->|"onlyDeveloper"| SetAuth
    Developer -->|"onlyAuthorized"| StateAccess
    Verifiers -->|"onlyAuthorized"| StateAccess

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State Transition Diagram

stateDiagram-v2
    [*] --> Deployed: constructor(poolManager, developer)

    Deployed --> ModSet: setHookMod(mod)
    ModSet --> Ready: hookMod != address(0)

    Ready --> Processing: PoolManager callback
    Processing --> Encrypting: receive plaintext
    Encrypting --> Computing: call hookMod
    Computing --> Decrypting: receive encrypted result
    Decrypting --> Ready: return plaintext

    Ready --> ModSet: setHookMod(newMod)

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Security Considerations

Consideration	Mitigation
Developer key compromise	Immutable developer address
Verifier collusion	Limited verifier set, slashing via AVS
Decryption oracle attacks	onlyAuthorized modifier
Gas cost overhead	Batch operations where possible
Fhenix availability	Fallback to non-encrypted mode (future)

Integration with AVS Verification

flowchart TB
    subgraph Verification["AVS Verification Layer"]
        Operator["AVS Operator"]
        TaskManager["HookAttestationTaskManager"]
    end

    subgraph CoFHE["CoFHE Hook"]
        Hook["CoFHEHook"]
        Auth["authorizedVerifiers"]
    end

    Developer["Developer"] -->|"setVerifierAuthorization"| Auth
    Operator -->|"authorized"| Auth
    Auth -->|"allows"| Hook
    Operator -->|"sample encrypted state"| Hook
    Operator -->|"verify against spec"| TaskManager

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Gas Considerations

Operation	Estimated Overhead
Encryption (per param)	~10-50k gas
Decryption (per return)	~10-50k gas
Encrypted computation	~2-10x plaintext
beforeSwap total	~100-300k gas (vs ~20-50k plaintext)

Note: Gas costs depend on Fhenix network conditions and encryption complexity.