git clone https://github.com/openclaw/skills
T=$(mktemp -d) && git clone --depth=1 https://github.com/openclaw/skills "$T" && mkdir -p ~/.claude/skills && cp -r "$T/skills/1kalin/afrexai-web3-engineering" ~/.claude/skills/openclaw-skills-afrexai-web3-engineering && rm -rf "$T"
T=$(mktemp -d) && git clone --depth=1 https://github.com/openclaw/skills "$T" && mkdir -p ~/.openclaw/skills && cp -r "$T/skills/1kalin/afrexai-web3-engineering" ~/.openclaw/skills/openclaw-skills-afrexai-web3-engineering && rm -rf "$T"
skills/1kalin/afrexai-web3-engineering/SKILL.mdWeb3 & Blockchain Engineering
Complete methodology for evaluating, designing, building, securing, and operating blockchain-based systems. Covers smart contract development, DeFi protocol design, token economics, security auditing, and production operations.
Zero dependencies. Framework-agnostic. Works with any blockchain, any language, any AI agent.
Phase 1: Should You Use Blockchain?
The Database Test
Before writing a single line of Solidity, answer honestly:
blockchain_evaluation: problem: "[describe the core problem]" requirements: multiple_untrusting_parties: true/false # >1 org needs shared truth no_trusted_authority: true/false # no single party everyone trusts immutability_critical: true/false # history must be tamper-proof censorship_resistance_needed: true/false # no entity should block access value_transfer_required: true/false # moving assets between parties transparency_required: true/false # all parties need verifiable state disqualifiers: single_org_controls_data: true/false # → use a database data_deletion_required: true/false # → GDPR conflict, careful high_throughput_low_latency: true/false # → >10K TPS? consider L2 or database users_cant_manage_wallets: true/false # → account abstraction or custodial trusted_authority_exists: true/false # → database with audit log score: "[count true requirements - count true disqualifiers]" verdict: "blockchain / hybrid / database"
Decision rules:
- Score ≤ 0 → Use PostgreSQL with audit logs
- Score 1-2 → Hybrid (anchoring/notarization on-chain, logic off-chain)
- Score 3+ → Blockchain is justified
Platform Selection Matrix
| Platform | TPS | Finality | Gas Cost | Best For |
|---|---|---|---|---|
| Ethereum L1 | ~30 | ~12 min | $1-50+ | Settlement, high-value DeFi |
| Arbitrum | ~4,000 | ~1 sec (soft) | $0.01-0.10 | DeFi, general dApps |
| Optimism | ~2,000 | ~2 sec (soft) | $0.01-0.15 | Public goods, governance |
| Base | ~2,000 | ~2 sec (soft) | $0.001-0.05 | Consumer apps, social |
| Polygon PoS | ~7,000 | ~2 sec | $0.001-0.01 | Gaming, mass-market |
| Solana | ~65,000 | ~400ms | $0.00025 | High-frequency, DePIN |
| Avalanche C | ~4,500 | ~1 sec | $0.01-0.10 | Enterprise, subnets |
| BNB Chain | ~2,000 | ~3 sec | $0.01-0.05 | Retail, low-cost |
| Bitcoin L1 | ~7 | ~60 min | $0.50-5+ | Store of value, settlement |
| Bitcoin L2 (Lightning) | ~1M+ | instant | <$0.01 | Micropayments, P2P |
Selection decision tree:
- Store of value / settlement only? → Bitcoin
- Micropayments / instant P2P? → Lightning Network
- Need EVM compatibility? → Yes: continue. No: consider Solana, Cosmos
- High-value DeFi / maximum security? → Ethereum L1
- General dApp with low gas? → Arbitrum or Base
- Mass-market consumer? → Base or Polygon
- Enterprise with custom rules? → Avalanche subnets or Hyperledger
Phase 2: Smart Contract Architecture
Design Principles
- Minimize on-chain state — Storage is expensive. Put data on-chain only if it needs consensus
- Fail loudly — Use
/require()
with descriptive messages, never silent failuresrevert() - Immutability by default — Upgradeability adds attack surface. Only use if genuinely needed
- Separation of concerns — One contract per responsibility
- Gas-conscious design — Every operation costs money. Optimize hot paths
Contract Architecture Patterns
architecture_brief: project: "[name]" type: "DeFi / NFT / DAO / Token / Marketplace / Infrastructure" contracts: core: - name: "[MainContract]" responsibility: "[single clear purpose]" state_variables: ["list key storage"] external_calls: ["contracts it calls"] periphery: - name: "[Router/Helper]" responsibility: "[user-facing convenience]" libraries: - name: "[MathLib/SafeLib]" responsibility: "[shared pure functions]" upgrade_strategy: "immutable / transparent-proxy / UUPS / diamond / beacon" access_control: "Ownable / AccessControl / Timelock+Multisig / DAO"
Upgrade Pattern Decision
| Pattern | Complexity | Gas Overhead | Storage Layout Risk | Best For |
|---|---|---|---|---|
| Immutable | None | None | None | Simple contracts, tokens |
| Transparent Proxy | Medium | +gas per call | High | Standard upgradeable |
| UUPS | Medium | Lower than transparent | High | Gas-efficient upgradeable |
| Diamond (EIP-2535) | High | Medium | High | Large modular systems |
| Beacon | Medium | Medium | High | Many identical instances |
Rule: If you can avoid upgradeability, do it. If you must upgrade, use UUPS with timelock + multisig governance.
Solidity Development Standards
// SPDX-License-Identifier: MIT pragma solidity ^0.8.24; // — IMPORTS: Use named imports, pin versions — import {IERC20} from "@openzeppelin/contracts/token/ERC20/IERC20.sol"; import {SafeERC20} from "@openzeppelin/contracts/token/ERC20/utils/SafeERC20.sol"; import {ReentrancyGuard} from "@openzeppelin/contracts/utils/ReentrancyGuard.sol"; /// @title VaultV1 /// @notice Single-asset vault with deposit/withdraw /// @dev Uses SafeERC20 for all token transfers contract VaultV1 is ReentrancyGuard { using SafeERC20 for IERC20; // — STATE: Group by slot for packing — IERC20 public immutable asset; // slot 0 uint128 public totalDeposits; // slot 1 (packed) uint128 public totalShares; // slot 1 (packed) mapping(address => uint256) public shares; // — EVENTS: Index searchable fields — event Deposited(address indexed user, uint256 amount, uint256 shares); event Withdrawn(address indexed user, uint256 amount, uint256 shares); // — ERRORS: Custom errors save gas vs strings — error ZeroAmount(); error InsufficientShares(uint256 requested, uint256 available); constructor(IERC20 _asset) { asset = _asset; } /// @notice Deposit assets, receive proportional shares /// @param amount Asset amount to deposit /// @return mintedShares Shares minted to caller function deposit(uint256 amount) external nonReentrant returns (uint256 mintedShares) { if (amount == 0) revert ZeroAmount(); // Calculate shares BEFORE transfer (prevent manipulation) mintedShares = totalDeposits == 0 ? amount : (amount * totalShares) / totalDeposits; // Effects before interactions (CEI pattern) totalDeposits += uint128(amount); totalShares += uint128(mintedShares); shares[msg.sender] += mintedShares; // Interaction last asset.safeTransferFrom(msg.sender, address(this), amount); emit Deposited(msg.sender, amount, mintedShares); } }
Coding Standards Checklist
- NatSpec on every public/external function
- Custom errors instead of require strings (saves ~50 gas each)
- Events for every state change
- CEI pattern (Checks-Effects-Interactions) on every external call
-
on functions with external callsnonReentrant -
/immutable
where possibleconstant - SafeERC20 for all token transfers
- No
for auth (phishing vector)tx.origin - Explicit visibility on all functions and state variables
- Storage variable packing (group smaller types together)
Phase 3: Token Economics (Tokenomics)
Token Type Decision
| Type | Standard | Use Case | Regulatory Risk |
|---|---|---|---|
| Utility token | ERC-20 | Access, governance, gas | Medium |
| Governance token | ERC-20 + voting | Protocol control | Medium |
| Security token | ERC-1400/3643 | Equity, revenue share | HIGH — requires compliance |
| NFT (unique) | ERC-721 | Collectibles, identity, access | Low-Medium |
| Semi-fungible | ERC-1155 | Gaming items, editions | Low |
| Soulbound (SBT) | ERC-5192 | Credentials, reputation | Low |
| Stablecoin | ERC-20 + peg | Payments, DeFi collateral | HIGH — regulatory scrutiny |
Token Design Framework
tokenomics: token_name: "[Name]" symbol: "[SYM]" standard: "ERC-20 / ERC-721 / ERC-1155" total_supply: "[fixed / capped / inflationary]" distribution: team: "[%] — [vesting schedule]" investors: "[%] — [vesting schedule]" community: "[%] — [distribution mechanism]" treasury: "[%] — [governance-controlled]" ecosystem: "[%] — [grants, incentives]" liquidity: "[%] — [DEX pairs, market making]" vesting: team_cliff: "12 months minimum" team_linear: "24-48 months after cliff" investor_cliff: "6-12 months" investor_linear: "12-36 months" value_accrual: mechanism: "[fee sharing / buyback-burn / staking yield / utility demand]" fee_structure: "[% of protocol revenue → token holders]" burn_mechanism: "[deflationary pressure source]" governance: voting_power: "1 token = 1 vote / quadratic / conviction" quorum: "[% of supply needed]" timelock: "[delay between vote and execution]" inflation_schedule: year_1: "[%]" year_2: "[%]" long_term: "[target %/year]" sustainability_test: without_new_buyers: "Does the token have utility even if price = 0?" revenue_source: "Where does yield come from? (real yield vs emissions)" death_spiral_risk: "Can selling pressure create feedback loop?"
Tokenomics Red Flags
| Red Flag | Why It's Bad | Fix |
|---|---|---|
| >20% team allocation | Centralization, dump risk | Cap at 15-20%, long vesting |
| No cliff period | Immediate sell pressure | 12-month cliff minimum |
| Inflationary without utility | Token printing → zero | Emissions tied to real revenue |
| "Yield" from new deposits | Ponzi economics | Real yield from fees only |
| Governance without timelock | Admin can rug | Timelock + multisig mandatory |
| 100% unlocked at launch | Massive sell pressure | Staged unlock over 2-4 years |
Phase 4: DeFi Protocol Design
Core DeFi Primitives
| Primitive | What It Does | Key Risk | Examples |
|---|---|---|---|
| AMM (DEX) | Trustless token swaps | Impermanent loss | Uniswap, Curve |
| Lending | Overcollateralized loans | Liquidation cascades | Aave, Compound |
| Stablecoin | Price-stable token | Depeg risk | MakerDAO, Ethena |
| Yield aggregator | Optimize yield farming | Smart contract risk stacking | Yearn |
| Perpetuals | Leveraged derivatives | Liquidation, oracle manipulation | GMX, dYdX |
| Liquid staking | Stake + maintain liquidity | Slashing, depeg | Lido, Rocket Pool |
| Bridges | Cross-chain transfers | Bridge exploits (billions lost) | LayerZero, Wormhole |
| Restaking | Re-use staked assets | Cascading slashing | EigenLayer |
AMM Design (Uniswap V2/V3 Pattern)
Constant Product: x * y = k Price Impact: Δy = y - k/(x + Δx) Slippage: (expected_price - actual_price) / expected_price V3 Concentrated Liquidity: - LPs choose price range [Pa, Pb] - Capital efficiency: up to 4000x vs V2 - Trade-off: must actively manage positions
DeFi Security Invariants
Every DeFi protocol MUST maintain these:
- Solvency — Total assets ≥ total liabilities (always)
- No free tokens — No path creates tokens from nothing
- Monotonic shares — Depositing increases shares, withdrawing decreases
- Oracle freshness — Price data is within acceptable staleness window
- Liquidation viability — Undercollateralized positions can always be liquidated
- Access control — Admin functions behind timelock + multisig
- Withdrawal guarantee — Users can always withdraw their assets (no lock-up without consent)
Phase 5: Security Auditing
Vulnerability Taxonomy
| Category | Severity | Common Patterns |
|---|---|---|
| Reentrancy | Critical | External call before state update |
| Oracle manipulation | Critical | Flash loan → price manipulation → profit |
| Access control | Critical | Missing auth on privileged functions |
| Integer overflow | High | Pre-0.8 math without SafeMath |
| Front-running | High | Sandwich attacks, MEV extraction |
| Flash loan attacks | High | Atomic arbitrage exploiting price feeds |
| Logic errors | High | Wrong formula, edge cases, rounding |
| Denial of service | Medium | Gas limit exploitation, stuck states |
| Centralization | Medium | Single admin key, no timelock |
| Griefing | Medium | Making others' transactions fail/expensive |
Security Audit Checklist (100+ Points)
Critical (Must Pass)
- Reentrancy protection — All external calls follow CEI pattern OR use
nonReentrant - Access control — Every privileged function has appropriate modifier
- Oracle security — Price feeds have freshness checks, manipulation resistance
- Integer safety — Solidity ≥0.8 (built-in overflow checks) or SafeMath
- Flash loan resistance — Protocol functions work correctly within single transaction
- Approval hygiene — No unlimited approvals to untrusted contracts
- Initialization — Proxy contracts can only be initialized once
- Self-destruct protection — No
in implementation contractsselfdestruct - Signature replay — Nonces prevent signature reuse across chains/contracts
High Priority
- Front-running protection — Commit-reveal or deadline parameters on sensitive operations
- Slippage protection — Min output amounts on swaps/withdrawals
- Rounding direction — Always round in protocol's favor (against user)
- Gas griefing — External calls can't force excessive gas consumption
- Token compatibility — Handles fee-on-transfer, rebasing, and missing-return tokens
- Withdrawal path — Users can always exit, even if admin functions fail
- Timelock on admin — Governance changes have delay period
- Key management — Multisig for all admin functions, no single points of failure
- Upgrade safety — Storage layout preserved across upgrades (no slot collision)
Medium Priority
- Event emission — All state changes emit events for off-chain tracking
- Input validation — Zero address checks, bounds checking on parameters
- Dust attacks — Small deposits can't grief the accounting
- Block timestamp — No reliance on exact block.timestamp (manipulable ±15s)
- Gas optimization — No unbounded loops, batch operations have limits
- Error messages — Custom errors with meaningful context
- Test coverage — >95% line coverage, 100% on critical paths
Common Attack Vectors with Mitigations
1. Reentrancy Attack: Call back into contract before state is updated Fix: CEI pattern + ReentrancyGuard 2. Oracle Manipulation (Flash Loan) Attack: Borrow → manipulate price → exploit → repay (atomic) Fix: TWAP oracles, Chainlink price feeds, manipulation-resistant design 3. Sandwich Attack (MEV) Attack: Front-run user's swap → inflate price → back-run to profit Fix: Deadline parameter, max slippage, private mempools (Flashbots) 4. Governance Attack Attack: Flash-borrow governance tokens → vote → execute Fix: Snapshot at proposal creation, timelock, vote escrow (ve-model) 5. Price Oracle Stale Data Attack: Use outdated price to exploit arbitrage Fix: Chainlink heartbeat check, staleness threshold, circuit breakers
Audit Process
audit_checklist: pre_audit: - [ ] Code freeze — no changes during audit - [ ] Documentation complete (spec, architecture, flow diagrams) - [ ] Test suite passing with >95% coverage - [ ] Known issues documented - [ ] Deployment scripts tested on testnet audit_scope: contracts: ["list all in-scope contracts"] lines_of_code: "[total Solidity LoC]" complexity: "low / medium / high / critical" prior_audits: "[list previous audit firms]" recommended_firms: tier_1: ["Trail of Bits", "OpenZeppelin", "Consensys Diligence"] tier_2: ["Spearbit", "Code4rena", "Sherlock"] bug_bounty: ["Immunefi (post-deployment)"] budget_guide: simple_token: "$5K-15K" defi_protocol: "$50K-200K" complex_system: "$200K-500K+" post_audit: - [ ] All critical/high findings fixed - [ ] Fix review by auditor - [ ] Audit report published (transparency) - [ ] Bug bounty program launched
Phase 6: Testing Strategy
Test Pyramid for Smart Contracts
/\ / \ Mainnet Fork Tests / \ (real state, real tokens) /------\ / \ Integration Tests / \ (multi-contract interactions) /------------\ / \ Unit Tests / \ (single function, isolated) /------------------\ / \ Static Analysis / \ (Slither, Mythril, Aderyn) /________________________\
Testing Checklist
testing_requirements: static_analysis: tools: ["Slither", "Mythril", "Aderyn"] run: "On every commit (CI)" unit_tests: coverage_target: ">95% line, 100% critical paths" framework: "Foundry (preferred) or Hardhat" must_test: - All require/revert conditions - Boundary values (0, 1, max_uint256) - Access control on every privileged function - Math precision and rounding integration_tests: must_test: - Full user flows (deposit → earn → withdraw) - Multi-contract interactions - Upgrade paths (storage layout preservation) - Governance proposal → execution flow fork_tests: must_test: - Real mainnet state interactions - Oracle price feed behavior - Token compatibility (USDT, USDC, DAI, etc.) - Gas costs with real-world state size fuzz_tests: tool: "Foundry fuzz / Echidna / Medusa" invariants: - "Total supply == sum of all balances" - "Total assets >= total liabilities" - "Share price monotonically increases (yield vaults)" - "No function creates tokens from nothing" formal_verification: when: "Critical DeFi with >$10M TVL" tools: ["Certora", "Halmos", "KEVM"]
Foundry Test Pattern
// test/VaultV1.t.sol contract VaultV1Test is Test { VaultV1 vault; MockERC20 token; address alice = makeAddr("alice"); function setUp() public { token = new MockERC20("Test", "TST", 18); vault = new VaultV1(IERC20(address(token))); token.mint(alice, 1000e18); vm.prank(alice); token.approve(address(vault), type(uint256).max); } function test_deposit_mintsShares() public { vm.prank(alice); uint256 shares = vault.deposit(100e18); assertEq(shares, 100e18, "First deposit: 1:1 shares"); assertEq(vault.shares(alice), 100e18); assertEq(vault.totalDeposits(), 100e18); } function test_deposit_revertsOnZero() public { vm.prank(alice); vm.expectRevert(VaultV1.ZeroAmount.selector); vault.deposit(0); } // Fuzz test: any deposit amount preserves invariants function testFuzz_deposit_invariants(uint128 amount) public { vm.assume(amount > 0 && amount <= token.balanceOf(alice)); uint256 prevTotal = vault.totalDeposits(); vm.prank(alice); vault.deposit(amount); assertEq(vault.totalDeposits(), prevTotal + amount); assertTrue(vault.totalShares() > 0); } }
Phase 7: Deployment & Operations
Deployment Checklist
pre_deployment: - [ ] All tests passing (unit, integration, fork, fuzz) - [ ] Static analysis clean (no high/critical findings) - [ ] Audit complete, all findings addressed - [ ] Deployment scripts tested on testnet (exact same flow) - [ ] Multisig wallets created and configured - [ ] Timelock contracts deployed and tested - [ ] Constructor arguments verified - [ ] Gas estimates confirmed within budget deployment: - [ ] Deploy to mainnet from hardened machine - [ ] Verify source on block explorer (Etherscan) - [ ] Transfer ownership to multisig/timelock - [ ] Renounce deployer privileges - [ ] Test all functions with small amounts - [ ] Set initial parameters (fees, limits, oracles) post_deployment: - [ ] Bug bounty program live (Immunefi) - [ ] Monitoring dashboards deployed - [ ] Alert rules configured - [ ] Documentation published - [ ] Community announcement
Monitoring Dashboard
smart_contract_monitoring: on_chain: - metric: "TVL (Total Value Locked)" alert: "Drop >10% in 1 hour" severity: "P0" - metric: "Unique active users (daily)" alert: "Drop >50% vs 7-day avg" severity: "P1" - metric: "Gas costs per transaction" alert: "Spike >3x average" severity: "P2" - metric: "Admin function calls" alert: "ANY unexpected admin call" severity: "P0" - metric: "Large withdrawals" alert: ">5% of TVL in single tx" severity: "P1" oracle: - metric: "Price feed freshness" alert: "Stale >30 minutes" severity: "P0" - metric: "Price deviation vs CEX" alert: ">2% deviation" severity: "P1" infrastructure: - metric: "RPC node health" alert: "Latency >500ms or errors" severity: "P1" - metric: "Indexer sync status" alert: ">100 blocks behind" severity: "P1"
Incident Response
| Severity | Response Time | Actions |
|---|---|---|
| P0 — Active exploit | < 5 min | Pause contracts, war room, post-mortem |
| P1 — Vulnerability found | < 1 hour | Assess impact, prepare fix, notify team |
| P2 — Degraded service | < 4 hours | Investigate, fix, monitor |
| P3 — Minor issue | < 24 hours | Schedule fix in next deployment |
P0 Emergency Protocol:
- Activate circuit breaker / pause contracts
- Assess: What was exploited? What's the exposure?
- Communicate: Alert team + trusted security researchers
- Contain: Block exploit path if possible
- Recover: Plan rescue transaction if funds recoverable
- Post-mortem: Full timeline, root cause, fix, prevention
Phase 8: Wallet & Key Management
Key Hierarchy
Seed Phrase (BIP-39) └── Master Key ├── m/44'/60'/0'/0/0 → Ethereum Account 0 ├── m/44'/60'/0'/0/1 → Ethereum Account 1 ├── m/44'/0'/0'/0/0 → Bitcoin Account 0 └── m/84'/0'/0'/0/0 → Bitcoin SegWit Account 0
Wallet Security Tiers
| Tier | Type | Use Case | Security Level |
|---|---|---|---|
| Hot wallet | Browser extension (MetaMask) | Daily interactions, small amounts | Low |
| Warm wallet | Mobile wallet (Rainbow, Trust) | Medium amounts, on-the-go | Medium |
| Cold wallet | Hardware (Ledger, Trezor) | Large holdings, long-term | High |
| Air-gapped | Keystone, dedicated offline | Maximum security, institutional | Very High |
| Multisig | Safe (Gnosis) | Treasury, protocol admin | Highest |
Multisig Best Practices
multisig_config: protocol_treasury: signers: 5 threshold: 3 # 3-of-5 signer_diversity: - Different devices/locations - Different key types (hardware + mobile) - No single point of failure timelock: "48 hours for >$100K" operational: signers: 3 threshold: 2 # 2-of-3 use_case: "Day-to-day parameter changes" timelock: "24 hours"
Self-Custody Security Rules
- Seed phrase storage — Metal plate (Cryptosteel/Billfodl), never digital
- Geographic distribution — Copies in ≥2 physical locations
- Test recovery — Verify you can restore from seed BEFORE storing value
- Phishing defense — Bookmark official URLs, never click links, verify contract addresses
- Hardware wallet firmware — Update only from official sources
- Transaction simulation — Use Tenderly/Fire before signing large transactions
- Approval hygiene — Revoke unused token approvals regularly (revoke.cash)
Phase 9: Layer 2 & Scaling
L2 Architecture Types
| Type | How It Works | Data Availability | Examples |
|---|---|---|---|
| Optimistic Rollup | Assume valid, challenge period | On-chain calldata | Arbitrum, Optimism, Base |
| ZK Rollup | Prove validity with ZK proof | On-chain calldata | zkSync, StarkNet, Scroll |
| Validium | ZK proof + off-chain data | Off-chain (DAC) | Immutable X |
| Plasma | Exit game mechanism | Off-chain | (largely deprecated) |
| State Channel | Off-chain with on-chain settlement | Off-chain | Lightning Network |
| Sidechain | Independent chain with bridge | Own consensus | Polygon PoS |
Cross-Chain Bridge Security
Bridges are the #1 attack vector in crypto (>$2.5B lost).
Bridge security checklist:
- Multisig or decentralized validator set (not single key)
- Rate limiting on bridge transfers
- Monitoring for unusual withdrawal patterns
- Emergency pause functionality
- Regular security audits
- Insurance fund for bridge exploits
Safer bridging approaches:
- Native bridges (Arbitrum/Optimism canonical) → Slow but trustless
- LayerZero/Axelar → Decentralized messaging
- Circle CCTP → Native USDC bridging (no wrapped tokens)
- Avoid: New/unaudited bridges, single-key admin bridges
Phase 10: Regulatory & Compliance
Regulatory Landscape (2025)
| Jurisdiction | Framework | Token Classification | Key Requirement |
|---|---|---|---|
| US (SEC) | Howey Test | Security vs Utility | Registration or exemption |
| US (CFTC) | CEA | Commodity (BTC, ETH) | Derivatives regulation |
| EU (MiCA) | Markets in Crypto-Assets | Utility/E-Money/ART | Licensing, reserves |
| UK (FCA) | Financial Promotions | Crypto-asset | Marketing restrictions |
| Singapore (MAS) | Payment Services Act | Digital Payment Token | Licensing |
| Japan (FSA) | FIEA/PSA | Crypto-asset | Registration |
Compliance Checklist
compliance: token_classification: - [ ] Legal opinion on token classification (security vs utility) - [ ] Howey test analysis documented - [ ] Jurisdictional analysis complete aml_kyc: - [ ] KYC/AML provider integrated (if applicable) - [ ] Sanctions screening (OFAC, EU, UN) - [ ] Transaction monitoring for suspicious activity - [ ] SAR (Suspicious Activity Report) filing process mca_eu: - [ ] Whitepaper published (if issuing tokens) - [ ] Notification to competent authority - [ ] Reserve requirements (for stablecoins) tax: - [ ] Tax treatment documented per jurisdiction - [ ] Reporting infrastructure (1099/DAC8) - [ ] Cost basis tracking for users
Decentralization as Compliance Strategy
The more decentralized a protocol, the stronger the argument it's not a security:
| Factor | Centralized (Risky) | Decentralized (Safer) |
|---|---|---|
| Development | Single company | Multiple contributor orgs |
| Governance | Admin key | Token-weighted DAO |
| Treasury | Company-controlled | Community-governed |
| Revenue | Flows to team | Flows to token holders |
| Upgrades | Admin deploys | Governance proposal + timelock |
| Front-end | Single website | Multiple alternative UIs |
Phase 11: Bitcoin & Lightning Network
Bitcoin Development
| Layer | Purpose | Key Technologies |
|---|---|---|
| L1 (Base) | Settlement, store of value | Script, Taproot, SegWit |
| Lightning | Instant micropayments | Payment channels, HTLCs |
| Ordinals/BRC-20 | NFTs, tokens on Bitcoin | Inscription, witness data |
| Stacks/Liquid | Smart contracts on Bitcoin | Clarity, Federated sidechain |
Lightning Network Integration
lightning_integration: use_cases: - Micropayments (<$1) - Point-of-sale payments - Streaming payments (per-second) - Machine-to-machine payments - Tipping / donations implementation: self_hosted: options: ["LND", "CLN (Core Lightning)", "Eclair"] requirements: "Bitcoin full node + Lightning node" complexity: "High" hosted_api: options: ["Strike API", "Voltage", "LNbits", "BTCPay Server"] requirements: "API key" complexity: "Low-Medium" standards: invoices: "BOLT11 (payment request)" keysend: "Spontaneous payments (no invoice)" lnurl: "User-friendly payment flows" bolt12: "Reusable offers (emerging)"
Bitcoin Self-Custody Best Practices
- UTXO management — Consolidate during low-fee periods
- Address reuse — Never reuse addresses (privacy)
- Coin selection — Use coin control for privacy-sensitive transactions
- Fee estimation — Use mempool.space for current fee rates
- Multi-sig — 2-of-3 for significant holdings (Sparrow, Nunchuk)
- Verify receive addresses — On hardware wallet screen, not just software
Phase 12: Advanced Patterns
MEV (Maximal Extractable Value)
mev_awareness: what: "Value extracted by block producers reordering/inserting transactions" types: - sandwich_attack: "Front-run + back-run user's swap" - arbitrage: "Cross-DEX price differences" - liquidation: "Race to liquidate undercollateralized positions" - jit_liquidity: "Just-in-time LP provision around large swaps" protection: users: - "Use private mempools (Flashbots Protect, MEV Blocker)" - "Set tight slippage limits" - "Use DEX aggregators with MEV protection (CoW Swap)" - "Submit transactions through RPC endpoints with MEV protection" developers: - "Commit-reveal schemes for sensitive operations" - "Batch auctions instead of continuous swaps" - "Deadline parameters on all swap functions" - "Internal oracle (TWAP) instead of spot price"
Account Abstraction (ERC-4337)
account_abstraction: what: "Smart contract wallets as first-class citizens" benefits: - Social recovery (friends can help recover account) - Gas sponsorship (app pays gas for users) - Batch transactions (multiple actions in one click) - Session keys (limited permissions for games/dApps) - Any token for gas (pay gas in USDC) implementation: frameworks: ["Safe{Core}", "ZeroDev", "Biconomy", "Alchemy AA"] bundlers: ["Pimlico", "Stackup", "Alchemy"] paymasters: ["Pimlico Verifying Paymaster", "Alchemy Gas Manager"] when_to_use: - Consumer-facing dApps (abstract wallet complexity) - Games (session keys, gasless) - B2B (multisig, spending policies)
Zero-Knowledge Applications
| Application | What ZK Proves | Example |
|---|---|---|
| Privacy transactions | "I have enough funds" without revealing amount | Tornado Cash, Zcash |
| Identity | "I'm over 18" without revealing age | Polygon ID, Worldcoin |
| Scaling (zkRollup) | "These transactions are valid" without re-executing | zkSync, StarkNet |
| Voting | "I voted" without revealing choice | MACI |
| Compliance | "I passed KYC" without sharing data | zkKYC |
Gas Optimization Techniques
| Technique | Gas Saved | Complexity |
|---|---|---|
Use instead of for read-only params | ~60 per 32 bytes | Low |
| Pack storage variables (<256 bit types together) | ~20,000 per slot | Low |
Use / | ~2,100 per SLOAD avoided | Low |
| Custom errors vs require strings | ~50 per error | Low |
| Unchecked math (when overflow impossible) | ~80 per operation | Medium |
| Batch operations | Varies (amortize base cost) | Medium |
| Assembly for hot paths | 20-50% on targeted code | High |
| Minimal proxy (EIP-1167) for clones | ~90% deployment cost | Medium |
Quality Rubric (0-100)
| Dimension | Weight | Score Guide |
|---|---|---|
| Security | 25% | 0: No audit, known vulns. 50: Basic testing. 100: Full audit, bug bounty, formal verification |
| Architecture | 15% | 0: Monolithic, no separation. 50: Some patterns. 100: Clean separation, upgrade path, gas-optimized |
| Testing | 15% | 0: No tests. 50: Unit tests. 100: Full pyramid (unit/integration/fork/fuzz/invariant) |
| Tokenomics | 10% | 0: Ponzi mechanics. 50: Basic utility. 100: Sustainable value accrual, aligned incentives |
| Documentation | 10% | 0: No docs. 50: Basic README. 100: NatSpec, architecture docs, user guides |
| Operations | 10% | 0: No monitoring. 50: Basic alerts. 100: Full dashboard, incident playbooks, SLOs |
| Compliance | 10% | 0: Unaddressed. 50: Basic legal opinion. 100: Multi-jurisdictional analysis, KYC/AML |
| Decentralization | 5% | 0: Single admin key. 50: Multisig. 100: DAO governance, timelock, multiple UIs |
Grade: 80+ Excellent | 60-79 Good | 40-59 Needs Work | <40 Critical Risk
Common Mistakes
| # | Mistake | Fix |
|---|---|---|
| 1 | Shipping without audit | Budget for audit from day 1 |
| 2 | Single admin key | Multisig + timelock always |
| 3 | Using spot price as oracle | TWAP or Chainlink |
| 4 | Ignoring MEV | Private mempool + slippage protection |
| 5 | No emergency pause | Circuit breaker on every protocol |
| 6 | Testing only happy path | Fuzz testing + invariant tests |
| 7 | Unlimited token approvals | Approve exact amounts needed |
| 8 | Ignoring gas optimization | Profile gas costs, optimize hot paths |
| 9 | No upgrade plan OR reckless upgrades | Decide upgrade strategy early |
| 10 | Building blockchain when database works | Run the Database Test first |
Edge Cases
Startup / Hackathon:
- Use Foundry + OpenZeppelin for speed
- Deploy to Base (low gas, large ecosystem)
- Skip formal verification (do it pre-mainnet)
- Focus: working product > perfect security
Enterprise / Institutional:
- Hyperledger Besu or Avalanche Subnets for permissioned needs
- Formal verification for critical paths
- Multi-jurisdictional compliance from day 1
- Hardware security modules (HSMs) for key management
High-Value DeFi (>$100M TVL):
- Multiple independent audits (minimum 2 firms)
- Formal verification (Certora)
- $1M+ bug bounty on Immunefi
- Real-time monitoring with automatic pause triggers
- Insurance coverage (Nexus Mutual, InsurAce)
NFT / Gaming:
- ERC-1155 for gas efficiency (batch operations)
- Off-chain metadata (IPFS/Arweave for permanence)
- Account abstraction for onboarding (gasless minting)
- Consider L2 (Immutable X, Base, Polygon) for low gas
Cross-Chain:
- Start with one chain, expand after PMF
- Use canonical bridges (slow but safe) over third-party
- Implement chain-specific parameter tuning
- Monitor bridge TVL and security track record
Natural Language Commands
When prompted, this skill responds to:
— Run the Database Test decision frameworkevaluate blockchain fit
— Generate architecture brief + coding standardsdesign smart contract
— Create token economics framework with distributiondesign tokenomics
— Run full security checklist against a contractaudit security
— Generate deployment + post-deployment checklistplan deployment
— Evaluate DeFi design against security invariantsassess DeFi protocol
— Review code for gas optimization opportunitiesoptimize gas
— Generate wallet + key management recommendationsreview wallet security
— Compare Layer 2 options for specific use caseevaluate L2
— Run regulatory compliance checklistcheck compliance
— Evaluate cross-chain approachdesign bridge strategy
— Complete assessment across all dimensionsfull web3 review