Shied-Lend

Privacy-Preserving Lending Protocol on Stellar
Borrow against Real-World Assets without revealing your collateral position

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🎯 Overview

ShieldLend enables institutions and users to borrow stablecoins (USDC) against Real-World Asset (RWA) collateral—like tokenized US Treasuries—without revealing their exact collateral amounts on-chain. Using zero-knowledge proofs with Soroban's X-Ray feature, ShieldLend maintains cryptographic privacy while ensuring trustless verification.

Key Features

• 🔐 Private Collateral: Deposit amounts hidden via zero-knowledge proofs
• 🏦 RWA Integration: Borrow against tokenized treasuries (BENJI, USDY)
• ⚡ Soroban X-Ray: Efficient BN254 proof verification on-chain
• 🛡️ Over-Collateralized: 150% collateralization ratio with automated liquidations
• 🌐 Institutional-Grade: KYC compliance layer with selective disclosure

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🏗️ Architecture

ShieldLend consists of three Soroban smart contracts:

Contracts (Stellar Testnet)

Contract	Address	Purpose
Vault	CBTJ6Q...SL26	Manages private collateral deposits
Lending Pool	CBIDOQ...2S7E	Issues loans with ZK proof verification
Liquidator	CBGKOA...X33U	Executes liquidations on unhealthy loans

View Full Addresses

Vault: CBTJ6QUVOJNWPEGDPL4ZILRUZIE5D53OKO3RLIW5CTADGVNT2LXWSL26 Lending Pool: CBIDOQW3L3BL5YOBJY3HFNXLJ4E5U6GDELBCUV7KTTTMAPDUCOGY2S7E Liquidator: CBGKOAR2W5SQYKKJLKFGO7GFHPVK5S3KRQ7CSSXECDYPDBLUW3XBX33U

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🚀 Quick Start

Prerequisites

• Node.js v18+
• Rust 1.75+
• Stellar CLI
• Freighter Wallet (Testnet mode)

Installation

# Clone repository
git clone https://github.com/yourusername/shieldlend.git
cd shieldlend

# Install frontend dependencies
cd frontend
npm install

# Install proving service dependencies
cd ../proving-service
npm install

# Build smart contracts (optional)
cd ../contracts
cargo install --locked stellar-cli --features opt
stellar contract build
Run Locally
bash
# Terminal 1: Start proving service
cd proving-service
node server.js
# Runs on http://localhost:3001

# Terminal 2: Start frontend
cd frontend
npm run dev
# Runs on http://localhost:5173
Access the App
Open browser: http://localhost:5173
Connect Freighter wallet (Testnet)
Start depositing and borrowing!


💡 How It Works
1. Deposit Collateral (Private)
User deposits 1000 BENJI tokens
         ↓
Generate secret key
         ↓
Compute commitment: Hash(amount, secret)
         ↓
Generate ZK proof
         ↓
Submit to Vault contract
         ↓
✅ Amount hidden, deposit recorded
Privacy: Only the commitment hash is stored on-chain, not the amount.


2. Borrow Against Collateral

User requests 500 USDC loan
         ↓
Generate ZK proof: "collateral ≥ loan × 1.5"
         ↓
Submit to Lending Pool contract
         ↓
Contract verifies proof (never sees amount)
         ↓
✅ Loan approved, USDC transferred
Privacy: Borrower proves sufficient collateral without revealing exact amount.

3. Manage & Repay
Monitor loan health factor (150% = healthy, <100% = liquidatable)
Repay anytime to release collateral
Automated liquidations protect protocol

🔐 Privacy Model
Hidden (Zero-Knowledge)
✅ Exact collateral amounts
✅ Deposit secrets/keys
✅ Position sizes

Public (On-Chain)
✅ Commitment hashes
✅ Loan amounts (USDC)
✅ Asset types (BENJI, USDY)
✅ Health factors
✅ Liquidation events
Result: Cryptographically private positions with public risk metrics.

🛠️ Technology Stack
Frontend
React 18 + TypeScript
Vite (build tool)
Stellar SDK (@stellar/stellar-sdk)
Freighter (wallet integration)
Backend (Proving Service)
Node.js + Express
SnarkJS (Groth16 proof generation)
Circom (ZK circuits)
Smart Contracts
Rust (Soroban SDK)
X-Ray (BN254 cryptography)
Groth16 (zero-knowledge proofs)

Blockchain
Stellar Testnet
Soroban smart contracts
Horizon API (balance queries)

📊 Supported Assets
Collateral (RWAs)
BENJI: Franklin Templeton tokenized US Treasury fund ($98.50)
USDY: Ondo Finance tokenized dollar yield ($1.00)

Loan Asset
USDC: USD stablecoin

Collateralization
Minimum ratio: 150% (e.g., $150 collateral for $100 loan)
Liquidation threshold: <100%
Liquidation bonus: 5%

📖 User Guide
Deposit Workflow
Navigate to Deposit page
Select asset (BENJI/USDY)
Enter amount
Click "Generate Secret" → SAVE THIS KEY!
Click "Deposit Privately"
Sign transaction in Freighter
Receive deposit ID

Borrow Workflow
Navigate to Borrow page
Select your deposit
Enter loan amount (max shown)
Click "Request Loan"
Wait for proof generation (~15s)
Sign transaction
Receive USDC

Manage Loans
Navigate to Manage page
View active loans & health factors
Click "Repay" to close loan
Collateral released automatically

🔬 Technical Details
Zero-Knowledge Proof System
Proof Type: Groth16 SNARK
Curve: BN254 (alt_bn128)
Verification: On-chain via Soroban X-Ray

Deposit Circuit:

template DepositProof() {
    signal input amount;
    signal input secret;
    signal output commitment;
    
    commitment <== Hash(amount, secret);
}
Loan Circuit:

template LoanProof() {
    signal input collateral;
    signal input price;
    signal input loan;
    
    // Verify: collateral * price >= loan * 1.5
    signal collateralValue <== collateral * price;
    signal minRequired <== loan * 150 / 100;
    
    assert(collateralValue >= minRequired);
}
Smart Contract Functions
Vault Contract:

rust
pub fn deposit_collateral(user: Address, proof: BytesN<256>) -> u64;
pub fn withdraw(user: Address, deposit_id: u64, proof: BytesN<256>);
pub fn get_commitment(deposit_id: u64) -> BytesN<32>;
Lending Pool Contract:

rust
pub fn request_loan(borrower: Address, deposit_id: u64, amount: i128, proof: BytesN<256>) -> u64;
pub fn repay_loan(borrower: Address, loan_id: u64);
pub fn get_loan_status(loan_id: u64) -> LoanStatus;
Liquidator Contract:

rust
pub fn liquidate(liquidator: Address, loan_id: u64) -> LiquidationResult;
pub fn get_health_factor(loan_id: u64) -> u32;

🎯 Use Cases
Institutional Lending
Hedge funds borrow without exposing strategies
Market makers access liquidity privately
Family offices leverage holdings discretely

DeFi Privacy
Private collateral management
Hidden position sizes
Competitive privacy in transparent DeFi

RWA Integration
Borrow against tokenized treasuries
Bridge TradFi and DeFi with privacy
Regulatory-compliant private lending

🛡️ Security
Cryptographic Security
✅ Industry-standard Groth16 proofs
✅ BN254 elliptic curve (256-bit security)
✅ SHA-256 commitment schemes

Smart Contract Security
✅ Soroban safety guarantees
✅ Over-collateralization (150% minimum)
✅ Automated liquidations
✅ No admin keys or upgradability

Economic Security
✅ Oracle price feeds (5-min updates)
✅ Liquidation incentives (5% bonus)
✅ Health monitoring
✅ DEX integration for liquidations