Swap confidential tokens

Three atomic-swap flows between public ERC-20 and Zama FHEVM confidential tokens (ERC-7984), all signed by DFNS-managed wallets. On the confidential leg, amounts are fully encrypted on-chain using Fully Homomorphic Encryption (FHE): only the balance holder can decrypt their own balance, and only the authorised counterparty sees what it needs to settle.

Get the code

dfns/dfns-solutions: confidential-swap

Three swap flows

#	Flow	Mechanics
1	ERC-20 → ERC-7984	Synchronous, single transaction. The swap contract pulls plainEUR from the sender, encrypts the amount in-contract, and credits confSGD to the sender.
2	ERC-7984 → ERC-20	Asynchronous, two transactions. The sender escrows an encrypted confSGD amount; the contract marks the handle for KMS decryption; a second transaction submits the cleartext + decryption proof to release the matching plainEUR.
3	ERC-7984 ↔ ERC-7984	Atomic two-party. The sender escrows encrypted confSGD and pins an encrypted confEUR price. The receiver fills in one transaction, paying confEUR and receiving confSGD. Neither amount is ever visible on-chain.

Rate is 1:1 across all three flows.

Contracts

Contract	Description
`PlainToken.sol`	Standard ERC-20 (OpenZeppelin) with owner-controlled minting
`ConfidentialToken.sol`	ERC-7984 via OpenZeppelin confidential-contracts; all balances FHE-encrypted
`ConfidentialSwap.sol`	The three-flow swap contract; holds plainEUR and confToken reserves

The swap contract follows a reserves pattern: it holds a pre-funded reserve of each token type to settle incoming swaps without needing to mint on-demand. Reserves are minted by the bank role at setup time.

What you’ll need

A DFNS account
A service account with these permissions:
- Wallets:BroadcastTransaction on the bank, sender, and receiver wallets
- Wallets:Read on all three
Three DFNS wallets on Ethereum Sepolia:
- bank: deploys contracts and mints reserves
- sender: initiates swaps
- receiver: fills Flow 3 orders
Testnet ETH on all three wallets (Sepolia faucet)
Node.js v22+

Setup

Clone and install

git clone https://github.com/dfns/dfns-solutions.git
cd dfns-solutions/confidential-swap
npm install

Configure environment variables

cp .env.example .env

.env

# DFNS API credentials: find these in app.dfns.io under Settings > Developers > Service Accounts
DFNS_API_URL=https://api.dfns.io
DFNS_ORG_ID=or-xxx-xxx
DFNS_AUTH_TOKEN=eyJ...
DFNS_CRED_ID=cred-xxx
DFNS_PRIVATE_KEY="-----BEGIN EC PRIVATE KEY-----\n...\n-----END EC PRIVATE KEY-----"

# Wallet IDs: create three EVM wallets on Sepolia in app.dfns.io
BANK_WALLET_ID=wa-xxx-xxx
SENDER_WALLET_ID=wa-yyy-yyy
RECEIVER_WALLET_ID=wa-zzz-zzz

# RPC URL (optional, defaults to a public Sepolia node)
BLOCKCHAIN_RPC_URL=

Variable	Description
`DFNS_API_URL`	DFNS API base URL
`DFNS_ORG_ID`	Your organization ID. See how to find it.
`DFNS_AUTH_TOKEN`	Service account auth token
`DFNS_CRED_ID`	Service account credential ID
`DFNS_PRIVATE_KEY`	Service account private key (PEM format)
`BANK_WALLET_ID`	Deploys contracts, mints tokens, funds reserves
`SENDER_WALLET_ID`	Initiates all three swap flows
`RECEIVER_WALLET_ID`	Fills the Flow 3 two-party order

Compile contracts

npm run compile

Running the demo

Deploy

npm run deploy:plain          # Deploy plainEUR (ERC-20)
npm run deploy:confTokens     # Deploy confSGD and confEUR (ERC-7984)
npm run deploy:swap           # Deploy ConfidentialSwap

Contract addresses are written to deployment.json and read automatically by subsequent scripts.

Mint and fund reserves

# Mint tokens to the three wallets
npm run mint:plain -- sender 2000
npm run mint:confToken -- confSGD sender 2000
npm run mint:confToken -- confEUR receiver 1000

# Fund the swap contract's reserves
npm run mint:plain -- swap 5000
npm run mint:confToken -- confSGD swap 5000

Set approvals

npm run approve -- sender plainToken   # ERC-20 approve for Flow 1
npm run approve -- sender confSGD      # ERC-7984 operator for Flow 2 and 3
npm run approve -- receiver confEUR    # ERC-7984 operator for Flow 3

Run the swaps

Flow 1: ERC-20 to confidential token

npm run swap:erc20-to-confToken -- 100
# sender pays 100 plainEUR, receives 100 confSGD

Flow 2: confidential token to ERC-20 (async)

npm run swap:confToken-to-erc20 -- 50
# sender pays 50 confSGD, receives 50 plainEUR
# script polls until the KMS produces a decryption proof, then finalises

Flow 3: confidential token to confidential token

npm run swap:confToken-to-confToken -- 100 80
# sender escrows 100 confSGD, names 80 confEUR as the price
# receiver fills atomically, both transfers occur in one transaction

Check balances

npm run reveal -- sender confSGD    # sender's encrypted confSGD balance
npm run reveal:all                  # all balances for sender and receiver in a table

FHE notes

Access grants and transaction boundaries. The Zama FHEVM tracks which addresses may use an encrypted handle. Flow 2 and Flow 3 each span multiple transactions. The contracts use FHE.allowTransient() and FHE.allowThis() to pass handles between calls. If you add extra steps between transactions (querying balance handles in between, for example), access grants may no longer be valid. Input binding. When encrypting an amount off-chain with the Zama relayer SDK, the ciphertext is bound to a specific (contractAddress, callerAddress) pair. A ciphertext encrypted for the swap contract cannot be replayed against the token contract directly. Flow 2 KMS latency. After the first transaction, the script polls until the Zama KMS produces a cleartext + signature. This typically takes 10–30 seconds on Sepolia. The script retries automatically. 1:1 rate and 6 decimals. All tokens use 6 decimals. The swap contract does no scaling. Mixing tokens with different decimal counts requires adjusting the reserve maths.

Issue tokenized bonds

ERC-20 bond lifecycle with DFNS signing

Build programmable approval policies

Service accounts that decode ABI call data

Cross-border payments on Solana

Atomic stablecoin swaps with DFNS KMS

Wallets API

broadcastTransaction reference

Introduction

Core Concepts

Platform Features

Networks

Solutions

Guides

Advanced

Get the code

Three swap flows

Contracts

What you’ll need

Setup

Running the demo

Deploy

Mint and fund reserves

Set approvals

Run the swaps

Check balances

FHE notes

Issue tokenized bonds

Build programmable approval policies

Cross-border payments on Solana

Wallets API

Get the code

​Three swap flows

​Contracts

​What you’ll need

​Setup

​Running the demo

​Deploy

​Mint and fund reserves

​Set approvals

​Run the swaps

​Check balances

​FHE notes

​Related

Issue tokenized bonds

Build programmable approval policies

Cross-border payments on Solana

Wallets API

Three swap flows

Contracts

What you’ll need

Setup

Running the demo

Deploy

Mint and fund reserves

Set approvals

Run the swaps

Check balances

FHE notes

Related