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🏗️ FheForge — Private, Encrypted DeFi on Arbitrum Sepolia

Solidity 0.8.28 Next.js 14 NestJS 11 FHE Arbitrum Sepolia MIT License Build Status Tests: 102 PASS Akindo Wave Hacks 2026

🏆 Akindo "Private By Design" dApp Buildathon — Wave 4 Submission
Track: RWA & Compliance · DeFi & Lending · Privacy Infrastructure

FheForge brings fully homomorphic encryption (FHE) to DeFi, letting you build, manage, and automate encrypted financial strategies — without exposing your positions to the world. Supply, borrow, swap, and liquidate with amounts that stay encrypted on-chain. Only you control who can decrypt and verify your position.

🔗 Live app: ui-chi-ashy.vercel.app
🔗 API: fheforge-api-production.up.railway.app
🔗 Source: github.com/symulacr/FheForge
🔗 Release: v1.2.0 — Buildathon submission

📺 Demo

Demo Script Demo Video

[Screenshots pending — record with Loom/OBS at 1440×900 per the demo script in docs/demo-video-script.md]

🚀 Quick Start

Try the live demo — no install required:

  1. Open ui-chi-ashy.vercel.app with MetaMask on Arbitrum Sepolia
  2. Connect your wallet and deposit collateral (faucet tokens available)
  3. Build a strategy using the visual ReactFlow canvas or describe it to the AI
  4. Deploy and watch your encrypted position execute

To run locally:

git clone https://github.com/symulacr/FheForge.git
cd contracts && npm install && node scripts/test-hardened.js
cd ../ui && bun install && bun dev
cd ../backend/apps && bun install && bun start:dev

Problem

Today's DeFi is a glass house. Every position, swap, and liquidation is public on-chain. Anyone can see:

  • Your wallet balance and all your trades — no privacy, no discretion
  • Your liquidation risk in real time — bots front-run your healthy positions
  • Your strategy's every move — MEV searchers extract value from your transactions

This isn't just an inconvenience. It's a structural barrier to institutional adoption. Funds, banks, and regulated entities cannot operate with full public visibility.

Why FHE?

Fully Homomorphic Encryption (FHE) lets smart contracts compute on encrypted data without ever decrypting it. Users deposit encrypted amounts; the contract runs supply, borrow, and swap logic on ciphertexts; only the user can reveal their own position.

Problem ZK MPC TEE FHE (FheForge)
Private input to contract ✓ (proof) ✓ (multi-party) ✓ (hardware) ✓ (direct)
On-chain compute on private data ✗ ✗ ✓ (trusted hw) ✓ (native)
No trusted setup or hardware ✓ ✓ ✗ ✓
Selective disclosure ✓ ✓ ✓ ✓ (signed permit)
Composability with existing DeFi Partial Partial Partial ✓ (CoFHE)
No latency overhead ✗ (off-chain) ✗ (rounds) ✓ ∼ (CoFHE ~1 block)

FHE is the only technology that allows private, on-chain computation without trusted hardware, trusted parties, or moving execution off-chain.

📋 Submission Details

This project is submitted to the Akindo "Private By Design" dApp Buildathon (Wave 4):

Field Value
Project Name FheForge
Track RWA & Compliance · DeFi & Lending · Privacy Infrastructure
Category DeFi, RWA Tokenization, Privacy Infrastructure
Tags FHE, CoFHE, Fhenix, Encrypted-DeFi, Privacy, RWA, Lending, Liquidations, Strategy-Vault
Demo URL ui-chi-ashy.vercel.app
Repo github.com/symulacr/FheForge

Judges — Quick Links

Use Case: Tokenized Real-World Assets (RWA)

FheForge is purpose-built for Track 1: RWA & Compliance. Here's how encrypted DeFi unlocks real-world asset markets:

  • Private credit scores — Borrow against RWA collateral without publishing your creditworthiness to the world
  • Confidential RWA ownership — Tokenized real estate, private credit, and invoice financing remain private
  • Selective auditor disclosure — Reveal position details to regulators or auditors only via signed permits
  • Encrypted strategy automation — Auto-manage RWA portfolios (rebalance, roll, harvest) without exposing positions

Example: A real estate tokenization fund manages 1,000+ investor positions. Using FheForge, each investor's holdings, yield, and liquidation risk are encrypted. The fund can still compute total collateral and manage liquidations — but no one sees individual positions except the owner.

Architecture

graph TB
    subgraph "USER"
        BROWSER["Browser / Wallet<br/>(MetaMask, Rabby)"]
    end

    subgraph "UI — Next.js 14"
        WAGMI["Wagmi + Viem<br/>Wallet + Chain"]
        COFHE["@cofhe/react SDK<br/>Encrypt/Decrypt"]
        BUILDER["ReactFlow<br/>Strategy Canvas"]
        NEXT["Next.js App Router"]
    end

    subgraph "BACKEND — NestJS"
        API["REST API"]
        AI["Gemini AI Builder"]
        STRAT["Simulation Engine"]
        SUPA["Supabase / PostgreSQL"]
    end

    subgraph "BLOCKCHAIN — Arbitrum Sepolia"
        COMPOSER["FheForgeComposer"]
        VAULT["StrategyVault"]
        LENDING["LendingPool"]
        SWAP["SwapRouter"]
        ORACLE["PriceOracle"]
        REG["StrategyRegistry"]
    end

    BROWSER --> NEXT
    BROWSER --> WAGMI
    WAGMI --> COFHE
    NEXT --> BUILDER
    NEXT --> API
    API --> AI
    API --> STRAT
    API --> SUPA
    WAGMI --> COMPOSER
    WAGMI --> VAULT
    WAGMI --> LENDING
    WAGMI --> SWAP
    COFHE --> COMPOSER
    COMPOSER --> VAULT
    COMPOSER --> LENDING
    COMPOSER --> SWAP
    COMPOSER --> ORACLE
Loading

Data flow: User builds a strategy in ReactFlow → Backend parses and simulates it → User confirms → Frontend calls FheForgeComposer → Composer orchestrates Vault/LendingPool/SwapRouter with encrypted amounts.

Infrastructure: Grafana + Prometheus (planned for production deployment).

Contracts — Arbitrum Sepolia (421614)

Contract Address
StrategyVault 0x75c7D581d9c408B93Bf6FB43aF3ECbe6FF5EEB1A
LendingPool 0x4F0508ca71a5Dae2C49FD9307a507f74DE90DD72
SwapRouter 0x56d08512c95562Ea3F70Bc16E0a0379E3632221B
StrategyRegistry 0x4e0414204972C9127E7eef2aeA5493e6E4D44914
PriceOracle 0xfA7B1f68c66AEf1BDC0981465ee5E29E456Da12C
FheForgeComposer 0x9892D8CaEB4a2ab4Dba10126a2f49D2aD5807b2C
ExecutorContract 0x133Fd65cB314f7FD6de1A6c9b5ad41324e231aD9
TokenRegistry 0x70F4EF1606dEa8d504C136166A20d079ffb33eDA
StrategyExecutor 0xf7C9f931CAC1658e60003eFbbE840d74e312529c
WETH (mock) 0x84BddCAfaccbBDBc0e3F1CAcCDd352EBf5e40A32
USDC (mock) 0x150376EdEbc5AC48771655a61a795d828BeC8Df6

Features

  • StrategyVault — Open, add to, and close positions with encrypted euint128 collateral
  • LendingPool — Supply, borrow, repay, withdraw — all amounts encrypted
  • Smart liquidations — Liquidate undercollateralized positions, borrow with oracle price checks
  • SwapRouter — Intent-based AMM with encrypted amountIn / minOut
  • StrategyRegistry — Register and discover strategies with encrypted TVL tracking
  • DeFi Builder — Visual ReactFlow canvas to compose strategies (SWAP → SUPPLY → BORROW)
  • AI Strategy Generator — Describe your goal in plain English; Gemini produces a structured strategy
  • Event Indexing — Real-time on-chain event monitoring for Vault and Pool
  • Wallet — wagmi v2 + CoFHE SDK, Arbitrum Sepolia, MetaMask

Privacy Model

  • Amounts → euint128 via CoFHE/Fhenix runtime
  • ZkVerifier rejects unsigned input — no dummy ciphertexts
  • decryptForView requires a signed permit — only you can read your own position
  • Cross-user isolation verified: user B cannot decrypt user A's ciphertext handles

📺 Demo Script (2-Minute Walkthrough)

Presenter A (User with encrypted position):

"I have USDC I want to use as collateral in DeFi — but I don't want the world to see my positions, my liquidation risk, or my trading strategy. With FheForge, I encrypt my deposit client-side using CoFHE. The contract only sees ciphertext. I can supply, borrow, and swap — all with encrypted amounts."

Presenter B (Demonstrating privacy):

"Now, let's verify privacy is real. Here's my encrypted position in the dashboard — the UI shows zero plaintext balances. Here's the block explorer — you can see the transaction but the amounts are garble. And here's the permit system: I can generate a signed cryptographic permit that lets a specific address (like an auditor or liquidator) decrypt just this one position — nothing else."

Presenter A (Showing the Builder):

"This is the DeFi Builder — a visual ReactFlow canvas. I drag a SWAP node, connect it to a SUPPLY node, describe the strategy to the AI in plain English, and deploy it. The backend simulates the strategy first, then the Composer contract orchestrates Vault → SwapRouter → LendingPool in a single atomic transaction."

Tests

forge      90 PASS | 0 FAIL
hardhat    12 PASS | 0 FAIL
brutal     T1–T12 live breaker (all pass)

Run full suite: node contracts/scripts/test-hardened.js · node contracts/scripts/test-sharp.js

Known Issues

Severity Issue Status
MED Dual plain+encrypted input skew — functions accept both a plaintext amount and an encrypted InEuint128 encAmount. While _verifyEquality checks FHE.eq(incoming, claimedPlain), this verification itself operates on the same plaintext provided by the caller. A malicious caller could provide a valid plaintext for the equality check while the real encrypted value differs — the on-chain equality check is consistent within the transaction but does not prove that the user's intent matches the plaintext. Full trustless enforcement requires a CoFHE ZK proof of equality linking the two inputs, planned for post-MVP. Mitigation: the encrypted value is what persists in state, so any skew only affects the current transaction's plaintext flow. Known — documented in @dev
LOW 2 solhint warnings (struct packing). Cosmetic only. Deferred
INFO Webpack build warnings (ox/viem dynamic imports, circular dependencies). Third-party — does not affect functionality. Monitored — library updates

Additional protocol-level limitations are tracked internally and will be addressed in future waves.

Resolved

Severity Issue Resolution
HIGH LendingPool.borrow() — no collateral check Resolved — only checkLtvAndBorrow + borrowWithOracle exist, both guarded
HIGH StrategyVault.positionStrategyIds never written Fixed (Wave 5)
LOW Router.executor EOA Fixed — ExecutorContract deployed (Wave 6)
LOW 96 solhint prettier warnings Fixed — prettier format applied, 0 errors, 2 cosmetic warnings remain
HIGH StrategyVault.closePosition() — no ownership check Fixed (v1.1.0) — added positionOwner mapping
MEDIUM PriceOracle.updatePriceFeeds() — broken address loop Fixed (v1.1.0) — registeredTokens array
LOW StrategyRegistry.broadcastStrategy() — off-by-one boundary check Fixed (v1.1.0)
LOW LendingPool.liquidateWithProof() — self-liquidation guard missing Fixed (v1.1.0)
MEDIUM SwapRouter deploy.ts missing 5th constructor arg Fixed (v1.1.0)
HIGH Duplicate interface files (IStrategyVault, ISwapRouter) Fixed (v1.1.0) — consolidated
MEDIUM hardhat.config.ts reads TESTER_PRIVATE_KEY (singular) Fixed (v1.1.0) — TESTER1+TESTER2
MEDIUM 15 stale deployment artifacts + conflicting .solhint.js Fixed (v1.1.0)
MEDIUM Frontend 3 ABI mismatches (openPosition, borrowWithOracle, getPlainBalance) Fixed (v1.1.0)
LOW Dead code (InterestIndex, RESERVE_FACTOR_BPS, BalanceRevealed, Position.debt) Fixed (v1.1.0)
MEDIUM TokenRegistry triple copy-paste Fixed (v1.1.0)
MEDIUM Missing natspec on public functions Fixed (v1.1.0)
MEDIUM FheForgeTestHelper fragile storage copy Fixed (v1.1.0)
HIGH ZK verifier mock absent (liquidateWithProof untested) Fixed (v1.1.0)
MEDIUM Mock ACL boilerplate (impersonation) Fixed (v1.1.0) — shared helper
LOW Scripts env var names mismatch Fixed (v1.1.0)

Tech Stack

Layer Technology
Smart Contracts Solidity 0.8.28, CoFHE SDK, OpenZeppelin, Hardhat + Foundry
Frontend Next.js 14, React 18, wagmi v2, viem, @cofhe/react, ReactFlow, Tailwind CSS, shadcn/ui, TanStack Query, Zustand
Backend NestJS 11, Supabase (PostgreSQL), @nestjs/swagger, Google Gemini AI
Blockchain Arbitrum Sepolia (CoFHE TaskManager)
Deployment Vercel (frontend), Railway (API)

Team

Name Role GitHub
symulacr Smart Contracts, Backend, Frontend, Infrastructure @symulacr

Setup

# 1. Contracts
cd contracts && npm install && node scripts/test-hardened.js

# 2. Frontend
cd ui && bun install && bun dev

# 3. Backend
cd backend/apps && bun install && bun start:dev

Copy ui/.env.example → ui/.env.local and backend/apps/.env.development.example → backend/apps/.env.development. Fill in API keys.

⭐ Show Your Support

If FheForge demonstrates that private DeFi is possible today, give us a star on GitHub — it helps buildathon judges see the community values this work!

Built with ❤️ for the Akindo "Private By Design" dApp Buildathon
Privacy isn't a feature. It's the foundation.

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FHE-powered DeFi strategy platform on Arbitrum Sepolia — encrypted lending, automated vaults, AI strategy builder

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ethereum smart-contracts solidity zero-knowledge fhe defi fully-homomorphic-encryption arbitrum fhenix

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