Covenant_Hedera

Demo

About

you would not lend someone money against their house and also let them tell you what the house is worth. private credit runs close to that: a fund holds a pile of loans, values them itself, and borrows against its own number. the Financial Stability Board found that the same loan gets different marks at different managers, because the judgement behind the mark is the manager's own (FSB, Report on Vulnerabilities in Private Credit, 6 May 2026, section 3.3). covenant takes that valuation out of self-marking. a confidential compute engine reads the underlying borrower's revenue, EBITDA, total debt, cash and interest expense, and returns two things only: a covenant pass or fail, and a haircut. both sides read the program before the facility is struck. the lender never sees the financials behind the number, and can still check that the published program produced it. what is live: a real note issued on Hedera testnet through the Asset Tokenization Studio, against its deployed resolver and factory, no new Solidity and no contract deployed. the full lifecycle runs: issuance, a transfer blocked by a compliance gate then granted then permitted, a coupon priced and distributed, and a collateral hold created, released, created again and executed on default. 21 transactions, signed by a human in MetaMask throughout, four gates independently re-verified against Hedera's mirror node and the testnet json-rpc relay. every hash is in EVIDENCE.md in the repository.

How it's made

Hedera testnet, the Asset Tokenization Studio SDK (@hashgraph/asset-tokenization-sdk@8.0.0) against its already-deployed resolver 0.0.9212226 and factory 0.0.9213391. we deploy no contracts and write no Solidity: issuance, the KYC compliance gate, the coupon and the collateral hold all run on ATS's own diamond, through the SDK. the benefit is concrete: a compliance-gated, coupon-bearing, hold-capable security token is not something we built, it is something ATS already gave us, correctly, on testnet, and we spent our time on the confidential leg instead of reimplementing a compliance facet. Next.js 16 and React 19 for the console, with the confidential compute engine built as a plain local service behind one swappable interface, CovenantEngine (lib/engine/types.ts). the entire surface for a different implementation is one file, lib/engine/registry.ts: no caller names a concrete provider. that is the shape a Chainlink CRE handlerInTee needs to drop into without touching a single route or component, and we proved the swap. we did not ship it live inside the build's timebox, and we say so rather than imply a deployment that did not happen: what shipped is the interface a real handlerInTee would sit behind, not a running enclave. the hacky part, and it is the most interesting thing we found. ATS's own Bond.createKpiLinkedRate cannot work on the deployed factory: it calls a factory function that exists only in MockFactory.sol, a test-only contract, and the KPI-linked bond configuration is registered in the deployed resolver but unreachable by any working path. we root-caused this from source and on chain, filed it as B1, and routed around it by issuing on the working variable-rate configuration instead, then driving the coupon rate through setCouponRateType(FIXED) and a role-gated setRate, both called directly against the deployed contract because the SDK exposes neither method. that single workaround is what makes the coupon's rate provably token-enforced rather than caller-supplied: the token refused a rate handed to it at setCoupon and stamped the value FixedRate.setRate had written 33 seconds earlier instead, checkable on HashScan without trusting us. fifteen defects surfaced by building a working flow against the SDK, not by auditing it for faults, filed in BUG.md as B1 through B15, two of which we investigated and withdrew after finding the actual cause was ours, not the SDK's. the confidentiality boundary is enforced by a committed script, npm run scan:disclosure, which builds the console for production and scans every asset the lender's and holder's pages ship for the borrower's raw financial fields and figures. it was tested on itself: we deliberately introduced a leak, confirmed the script failed on it, then removed the leak and confirmed a clean pass, so the check is proven to fire rather than assumed to. built by one person, hao, directing a team of AI agent configurations running on Claude. the agent definitions and the specs and prompts that drove this build are committed in the repository, in .claude/agents/ and specs/, not written after the fact. every one of the 21 transactions on chain was signed by a human in MetaMask: ATS SDK v8 ships no local-key signer (SupportedWallets.CLIENT is disabled in its source), so no agent could have signed any of them, and this is independently checkable on Hedera's mirror node, not asserted. full account: AI_USAGE.md.