Fund Creation Flow
The Fund Creation Flow defines how a private fund vault is instantiated, configured, and secured before any capital or strategy is deployed.
This process ensures that privacy, governance, and execution constraints are in place from day one.
A fund cannot accept capital or execute actions until this flow is completed.
Design Principles
The fund creation process is designed to:
Establish governance authority before capital exists
Define roles and thresholds without exposing identities
Prevent retroactive rule changes
Ensure vault-level isolation
Minimize trust assumptions
Fund creation is configuration first, capital second.
Step 1. Vault Initialization
A new Fund Vault is initialized with:
A unique Fund Vault ID
A reference to the governing ZK DAO
Default governance parameters
Initial execution constraints
At this stage:
No capital exists in the vault
No roles are publicly visible
No execution is possible
The vault exists only as a governed container.
Step 2. Governance Binding
The vault is bound to a specific ZK DAO configuration.
This binding defines:
Which DAO governs the vault
Which governance rules apply
Which proposal types are allowed
Which execution thresholds are valid
Once bound:
Governance authority cannot be changed unilaterally
Any update requires DAO approval
This prevents silent takeover or reconfiguration.
Step 3. Role Definition
The creator defines the role schema for the vault.
Examples:
Fund Manager
Signer
LP
Auditor
Executor
For each role, the following are specified:
Permissions
Allowed actions
Voting or execution weight
Revocation rules
Roles are logical definitions, not identities.
Step 4. Initial Role Assignment
Initial role holders are assigned via private issuance.
zkID credentials are issued to role holders
Role membership is not published on-chain
Assignment proofs are stored privately
This step establishes authority without revealing who holds it.
Step 5. Execution Threshold Configuration
Execution thresholds are defined per action type.
Examples:
Swap: 3-of-5 signers
Withdrawal: 2-of-3 managers
Strategy update: DAO vote + 1 manager
Thresholds are:
Explicit
Immutable without governance
Enforced at execution time
This prevents discretionary execution.
Step 6. Treasury & Accounting Configuration
The vault configures:
Supported assets
Fee models
Accounting parameters
NAV computation rules
No balances are initialized yet.
Accounting logic exists before assets exist.
Step 7. Settlement Layer Binding
The vault is connected to:
One or more ZK Pools
Private settlement routes
Allowed liquidity venues
Settlement configuration ensures:
All future asset movements are private
No public treasury addresses are used
Step 8. Finalization & Activation
Once all configuration steps are complete:
The vault is marked as active
LP deposits are enabled
Proposal creation for fund actions is allowed
From this point forward:
All changes require governance
All actions require proofs
All execution is private
Why Creation Order Matters
If capital were deposited before governance:
Rules could be manipulated
LPs would bear hidden risk
Trust assumptions would increase
ZKFund enforces:
Rules first. Capital second. Execution last.
Security Guarantees at Creation
The Fund Creation Flow guarantees that:
No fund exists without governance
No capital exists without constraints
No authority exists without proof
No execution exists without approval
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