> For the complete documentation index, see [llms.txt](https://whitepaper.zodor.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://whitepaper.zodor.io/system-architecture/overview-of-the-protocol/homomorphic-encryption.md).

# Homomorphic Encryption

Revolutionizing Privacy and Security

Zodor implements two complementary encryption stacks:

**Paillier Cryptosystem (Backend / Partial Homomorphic)**

The backend uses **Paillier** to compute on encrypted balances without decryption. Useful for:

* **Private balance queries** investor balances can be aggregated for reporting without exposing individual holdings
* **Encrypted dividend computation** payouts computed against ciphertexts
* **Confidential RWA swaps** swap quotes generated against encrypted positions

> "Homomorphic Encryption is a revolutionary cryptographic method that allows computations to be performed on encrypted data without decrypting it."

<figure><img src="https://1196290230-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FhYh8V1C2OHzsf183aFEG%2Fuploads%2FajYJTNSeexsaqfRzuFP8%2F1.png?alt=media&amp;token=381c2110-d22d-4000-b7e9-70ec2bff6cac" alt=""><figcaption></figcaption></figure>

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**Zama fhEVM (On-Chain / Fully Homomorphic)**

For institutional-grade on-chain confidentiality, Zodor ships:

* **`ConfidentialZEROC`** FHE-shielded wrapper around `ZEROC` requiring `KYC_GLOBAL + ESG_VERIFIED`. Carbon trading desks can hold encrypted balances directly on-chain.
* **`ConfidentialSecurityToken`**  generic FHE security token used by `ZIST` tranches and large `ZCET` deals.

Encrypted balances + encrypted transfer amounts + encrypted aggregate accounting fhEVM lets the chain compute on ciphertexts that even validators cannot read.

**Path C - EOA-Direct + Reserve Oracle**

Token uses a third privacy mode tuned for futures-style instruments:

* `balanceOf` is gated to `msg.sender` (and authorised agents)
* `Transfer` events emit `amount = 0`
* `ZodorProofRegistry` anchors off-chain reserve proofs (IPFS + treasury attestations)
* `ZodorReserveOracle_ZCFT` attests live supply against the USDT/USDC inventory in the treasury at `0xe1C7…639F`