Commitment & Nullifier Lifecycle

Assets inside ZENDEX do not exist as ERC-20 balances tied to a public address. Instead, they exist as opaque leaf nodes in an incremental Merkle tree managed by TreeOperator.

Commitment Creation

When a user deposits funds or receives trade outputs, a commitment $C$ is constructed:

$C = \text{Poseidon}\left(\text{asset\_id}, \text{amount}, \text{Poseidon}\left(\text{random\_blinding}, \text{public\_key}_x, \text{public\_key}_y\right)\right)$

This value is appended to the TreeOperator Merkle tree. Observers cannot reverse the hash to identify the asset type, amount, or recipient address.

Nullifier Emission

To spend an existing commitment (e.g., during a swap, withdrawal, or limit order creation), the user generates a ZK proof demonstrating ownership of a valid leaf in the tree. To prevent double-spending without revealing which leaf was spent, the transaction publishes a nullifier $N$:

$N = \text{Poseidon}\left(\text{Poseidon}\left(\text{random\_blinding}\right), \text{public\_key}_x, \text{public\_key}_y\right)$

The contract verifies that $N$ has not been previously recorded in the nullifier registry, marks it as spent, and executes the requested state update.