Cryptographic Proof-of-Reserve Verification Module for Cross-Chain Asset Backing

[elizabetheonoja-art]

Problem Statement / Feature Objective

Operators must verify that on-chain asset reserves (e.g., tokenized utility credits) are fully backed by off-chain physical resources. A cryptographic Proof-of-Reserve (PoR) module must run client-side, fetching Merkle-summary commitments from Soroban contract storage, querying the operator's own audited resource inventory via REST, and computing a non-interactive zero-knowledge range proof that the off-chain total exceeds the on-chain liability. The resulting proof is submitted as a Soroban transaction for on-chain attestation, providing a cryptographically verifiable audit trail without revealing individual meter readings.

Technical Invariants & Bounds

• Merkle tree depth: 20 levels for up to 1,048,576 meter endpoints. Each leaf is SHA-256( meterId || consumption || salt ).
• Proof type: Bulletproofs-style range proof using the dalek-cryptography/bulletproofs library compiled to WASM. Range: [0, 2^64) with 64-bit commitment.
• Off-chain inventory aggregation: REST endpoint GET /api/resources/audit?from={ts}&to={ts} returns cumulative consumption per resource class with a signed server timestamp.
• On-chain commitment: Soroban contract stores the Merkle root (bytes32), total liability (i128), and last audit ledger number.
• Computation budget: WASM proof generation must complete within 5 seconds on a mid-range field tablet (Snapdragon 7c). WASM binary size must not exceed 2 MB gzipped.

Codebase Navigation Guide

• src/services/proofOfReserve.ts - Orchestrator: fetches on-chain commitment, off-chain inventory, invokes WASM prover.
• src/workers/proofWorker.worker.ts - Dedicated Web Worker loading the WASM module; receives JSON input, runs proof generation, returns proof bytes.
• src/utils/merkleTree.ts - Merkle tree construction: building leaf nodes, computing root, generating Merkle proof paths.
• src/utils/wasmLoader.ts - Helper to fetch, instantiate, and cache WASM module from public/wasm/ directory.
• src/hooks/useProofOfReserve.ts - React hook providing proof generation status, progress (0-100%), and result state.
• src/components/panels/ReserveAttestationPanel.tsx - UI panel showing latest attestation, proof hash, and verification status.

Implementation Blueprint

1. Compile bulletproofs WASM binary using wasm-pack with target bundler. Place output in public/wasm/bulletproofs.wasm with a versioned integrity hash.
2. Write src/utils/merkleTree.ts: buildTree(leaves) returns root; generateProof(leafIndex) returns sibling path. Use incremental SHA-256 via SubtleCrypto API to keep the main thread responsive.
3. In src/services/proofOfReserve.ts: (a) call Soroban contract to fetch on-chain Merkle root and totalLiability; (b) call REST audit endpoint to get off-chain aggregated consumption; (c) if off-chain total < on-chain liability, abort with insolvency warning; (d) otherwise, format inputs and post to the worker.
4. In proofWorker.worker.ts: instantiate WASM module, accept { merkleRoot, totalLiability, auditTotal, randomness }, invoke the prover, return { proof, commitment, challenge }.
5. Back on the main thread, assemble a Soroban transaction that calls attestReserve(proof, commitment) and submit via src/services/soroban.ts.
6. The hook useProofOfReserve wraps this flow with progress events (25% fetch, 50% proving, 75% submitting, 100% confirmed).
7. Display the attestation result in ReserveAttestationPanel: attestation hash, block number, time since last proof, and a red banner if insolvency detected.

[real-venus]

Hey, I've read through the issue and I understand it.

Could you assign it to me? I can finish this within 24 hrs.

[grantfox-oss]

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Next steps:

1. Open a Pull Request referencing this issue (e.g., Closes #52)
2. Your PR will be reviewed by the Utility-Protocol maintainers

Good luck! Track your progress on GrantFox.

[grantfox-oss]

🎉 This issue has been marked as completed on GrantFox as part of the Official Campaign campaign!

@real-venus's PR #85 was approved and merged by @elizabetheonoja-art.

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👏 Great work, @real-venus! Keep contributing to Utility-Protocol.