Confidential Tokens

Beta on SKALE Base Sepolia — Confidential Tokens are available for testing and development on testnet. Mainnet deployment coming soon. API is stable but may see refinements.

Why Confidential Tokens?

Standard ERC20 tokens store balances as plaintext onchain — anyone can see who holds what. For payroll, lending, gaming, or any application where financial privacy matters, this is a non-starter. Confidential Tokens solve this by encrypting every balance using a dual-layer model: threshold encryption for onchain processing (transfers, sufficiency checks) and ECIES encryption for private off-chain viewing.

What Are Confidential Tokens?

Confidential Tokens are ERC20 tokens where balances are encrypted onchain. No plaintext balance is ever stored. They use a dual-encryption model — threshold encryption for on-chain logic and ECIES encryption for off-chain viewing.

Quick Start

Foundry
Hardhat

forge install skalenetwork/confidential-token

import "@skalenetwork/confidential-token/ConfidentialToken.sol";

// Balances are encrypted automatically — no manual encryption needed
// Transfers use CTX under the hood for secure processing
confidentialToken.transfer(recipient, amount);

// Balance is readable only by the holder via their viewer key
uint256 balance = confidentialToken.balanceOf(msg.sender);

npm install @skalenetwork/confidential-token

import { ConfidentialToken } from "@skalenetwork/confidential-token";

// Balances are encrypted automatically — no manual encryption needed
await confidentialToken.transfer(recipient, amount);

// Balance is readable only by the holder via their viewer key
const balance = await confidentialToken.balanceOf(sender);

Dual-Encryption Model

Layer	Key	Purpose	Who Can Decrypt
TE (Threshold Encryption)	Network BLS key	On-chain logic (transfers, sufficiency checks)	Consensus via CTX callback
ECIES	Recipient’s secp256k1 key	Off-chain balance viewing	Token holder’s private key

Both layers encrypt every balance. The TE layer allows the network to verify and process transfers without seeing amounts. The ECIES layer allows the token holder to read their balance privately off-chain.

Architecture

A confidential token transfer works like this — encryption of new balances happens inside the CTX callback, not upfront:

transfer(from, to, amount)
  → SubmitCTX(0x1B, from_encBalance, to_encBalance, amount, [plaintext metadata])
    → Validators decrypt encrypted args
      → onDecrypt() callback called via ephemeral wallet
        → Validate from_balance >= amount
        → Compute new_balance_from, new_balance_to
        → EncryptTE(0x1D, new_balance_from) → store in _thresholdBalances
        → EncryptTE(0x1D, new_balance_to)   → store in _thresholdBalances
        → EncryptECIES(0x1C, new_balance_from, from_viewerKey) → _userBalances
        → EncryptECIES(0x1C, new_balance_to, to_viewerKey)     → _userBalances

Key Contracts

Contract	Purpose
`ConfidentialToken`	Core confidential ERC20 token (encrypted balances, dual-layer encryption, etc.)
`ConfidentialWrapper`	Wraps an existing ERC20 into a confidential token
`MintableConfidentialToken`	ConfidentialToken + controlled minting (access-managed)
`ConfidentialEIP3009`	EIP-3009 (`TransferWithAuthorization`) extended with encrypted values (supports encrypted `transferWithAuthorization` and `receiveWithAuthorization`).

Roles

Role	Can Do	Can See Balance
Holder	Transfer, approve, register a viewer key, authorize historic decryption	Only via registered viewer key
Viewer	Decrypt ECIES balance off-chain (if authorized)	Yes (if granted access)
Anyone	View encrypted cipher-text onchain	Encrypted only

Delegating a Viewer role

A holder registers their viewer public key via setViewerPublicKey(). The holder can also authorize other addresses to decrypt specific past transfers. This is done by calling functions such as authorizeHistoricViewTimeRange(viewer, fromTimestamp, toTimestamp) or authorizeHistoricViewTransferId(viewer, transferId). The setViewerAddress() function allows a token holder to assign an account with a previously registered public key as the authorized viewer of their confidential balance information.

Learn More

Re-encryption — The encryption precompiles that power confidential tokens
Conditional Transactions — How CTX enables on-chain processing of encrypted data

Integrate SKALE

Resources

Programmable Privacy

SDKs

SKALE Bridge

Cryptography

Why Confidential Tokens?

What Are Confidential Tokens?

Quick Start

Dual-Encryption Model

Architecture

Key Contracts

Roles

Delegating a Viewer role

Learn More

​Why Confidential Tokens?

​What Are Confidential Tokens?

​Quick Start

​Dual-Encryption Model

​Architecture

​Key Contracts

​Roles

​Delegating a Viewer role

​Learn More

Why Confidential Tokens?

What Are Confidential Tokens?

Quick Start

Dual-Encryption Model

Architecture

Key Contracts

Roles

Delegating a Viewer role

Learn More