Audit & Selective Disclosure
Audit & Selective Disclosure defines how ZKFund remains auditable and compliant without sacrificing privacy. It allows funds to prove correctness, solvency, and rule adherence without exposing identities, balances, or strategies.
This section addresses a core concern:
How can a private fund be trusted without becoming transparent?
Purpose
In traditional systems, auditability relies on disclosure:
Full transaction history
Wallet addresses
Counterparty details
Internal accounting records
On-chain, this level of disclosure is permanent and exploitable.
ZKFund replaces disclosure-based audits with proof-based audits.
Proof-Based Audit Model
ZKFund uses cryptographic proofs to demonstrate that:
Governance rules were followed
Execution thresholds were respected
Treasury constraints were enforced
Assets were not misused
Accounting remained consistent
Auditors verify validity, not raw data.
What Can Be Proven
Without revealing sensitive information, ZKFund can prove:
A proposal was validly approved
Required quorum and thresholds were met
No unauthorized execution occurred
Withdrawals stayed within limits
NAV calculations were correct
Assets were not double-spent or misallocated
These proofs are:
Deterministic
Verifiable on-chain or off-chain
Non-interactive
Selective Disclosure Mechanism
Selective disclosure allows limited information to be revealed only when explicitly approved by governance.
Disclosure may include:
Aggregated NAV metrics
Time-bounded performance reports
Specific execution proofs
Compliance attestations
Disclosure never includes:
Full transaction history
Wallet addresses
LP lists
Strategy logic
Who Can Receive Disclosures
Selective disclosure can be granted to:
Auditors
Regulators
Institutional partners
LPs (limited to their own scope)
Recipients are:
Explicitly authorized
Scope-limited
Time-bound
Access cannot be escalated silently.
Governance Control Over Disclosure
All disclosure actions require:
A governance proposal
Explicit approval thresholds
Defined disclosure scope
Governance controls:
What is disclosed
To whom
For how long
This ensures that privacy is not eroded incrementally.
Auditor View
Auditors interacting with ZKFund receive:
Proof receipts
Verification tools
Defined verification scope
They do not receive:
Raw financial data
Identity mappings
Execution paths
Audits focus on rule compliance and system integrity, not surveillance.
Compliance Without Identity Exposure
ZKFund supports compliance requirements such as:
Proof of funds legitimacy
Proof of non-sanctioned interaction
Jurisdictional constraints
All compliance checks are:
Proof-based
Non-identifying
Minimally sufficient
This avoids identity honeypots and data leakage risk.
Security & Privacy Guarantees
Audit & Selective Disclosure guarantees that:
No data is disclosed by default
All disclosure is explicit and revocable
Auditors cannot infer hidden state
Historical privacy is preserved
Even disclosed data cannot be used to reconstruct the full system state.
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