Vellum | Atomic Privacy Middleware for Real World Assets

Elevator Pitch

Vellum is a non custodial privacy middleware that enables issuers to tokenize Real World Assets on Mantle with zero knowledge compliance. It unlocks a privacy premium market where assets settle atomically via Mantle logs and earn yield through composable liquidity.

Problem Statement

The tokenized asset market faces a critical deadlock known as the RWA Trilemma. Public blockchains expose sensitive financial data, inviting hacks and competitive front running, while privacy solutions often fail compliance standards required by institutions. Consequently, trillions in capital remain off chain because issuers cannot reconcile the need for privacy with the requirement for regulatory enforceability.

Our Solution

We built Vellum, an atomic privacy engine that creates a programmable compliance layer for RWAs. Issuers upload documents which are encrypted client side and pinned to IPFS, generating a ZK proof that authenticates the asset without revealing its contents. The system enables a Selective Disclosure model where data remains private during good standing but becomes readable to auditors upon default, unlocking institutional liquidity without compromising user anonymity.

How It Works (Technical Overview)

The architecture functions as a ZK Rollup for Compliance built natively on the Mantle Network.

Client Side ZK
We utilize SnarkJS with custom Circom circuits implementing EdDSA signature verification and Nullifier generation. This ensures that assets are mathematically unique and authentically signed by issuers without revealing the underlying data to the network.

Atomic Data Availability
Instead of relying on asynchronous external DA layers, Vellum leverages Mantle L2 Event Logs. By emitting encrypted ciphertext and IPFS hashes as logs within the mint transaction, we achieve atomic settlement and immediate availability at a fraction of the cost of storage.

Composability and Yield
The smart contract layer, written in Solidity, integrates with Mantle Staked ETH (mETH). This allows blinded private assets to be paired with liquid staking tokens, generating yield while maintaining privacy.

Encryption Pipeline
We use Pinata IPFS for heavy asset storage, utilizing HKDF key derivation to bind the encryption key directly to the ZK witness. This guarantees that only the prover can decrypt the data unless a default event triggers the smart contract to release the keys.

What Makes It Unique

Atomic Settlement on Mantle
We replaced asynchronous DA layers with Mantle Event Logs, achieving immediate finality and 99% cost reduction compared to L1 execution. This makes privacy commercially viable for high volume assets like invoices.

Privacy Premium Market
We introduced a novel economic model where privacy is treated as a value add service. Borrowers pay a fee for anonymity, which is distributed to lenders as a boosted APY, turning privacy from a cost center into a yield generator.

ZK Enforced Compliance
Unlike simple wrappers, our circuits enforce logic constraints like unique nullifiers and solvent timestamps directly within the proof. This creates a trustless environment where compliance is guaranteed by math rather than a central intermediary.

Challenges Faced

Implementing heavy cryptography in the browser presented significant performance hurdles, specifically freezing the UI during proof generation. We solved this by offloading SnarkJS operations to Web Workers to maintain a responsive user experience. Additionally, optimizing data availability was a challenge; we initially targeted external DA layers but pivoted to Mantle native Event Logs to ensure atomic transaction finality and deeper ecosystem integration.

Future Scope

We plan to launch a production SDK pilot with RWA issuers like Centrifuge to enable private invoice factoring. Technical roadmap includes upgrading from AES GCM to threshold Fully Homomorphic Encryption (FHE) for multi party computation and implementing an automated auditor indexer subgraph for real time compliance monitoring.

Team & Roles

Solo Developer
alienworld1 - Responsible for full stack development including Circom circuit design, Solidity smart contract engineering, Next.js frontend implementation, and SDK architecture.