> For the complete documentation index, see [llms.txt](https://docs.hooded.cash/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hooded.cash/protocol-and-architecture/protocol-overview.md).

# Protocol Overview

HoodedCash's on-chain layer is built on Robinhood Chain, using HoodedCash's own confidential token contracts — an encrypted-balance ERC-20 in the Zether lineage — as its privacy primitive. The EVM has no native confidential-transfer feature, so this contract layer is HoodedCash's own, verified on-chain. Unlike a typical fintech product, HoodedCash doesn't run its own settlement ledger. Settlement is Robinhood Chain itself, secured by Ethereum.

***

## What the protocol layer does

1. **Custody and signing:** every account is an ERC-4337 smart account controlled by a keypair generated client-side. HoodedCash never holds keys.
2. **Confidential transfers:** transfer amounts are encrypted by the confidential token contracts, with proof generation happening on the client.
3. **Gas abstraction:** a small ETH reserve is maintained per account automatically and topped up via an internal swap when it drops below threshold, so users only ever think in USDG.
4. **Agent policy enforcement:** spend policies are checked client-side in the agent's signing flow, and enforced on-chain by the agent account's validation contract.
5. **Indexing:** on-chain events are indexed off-chain via contract event streams, powering the real-time feed and webhook system without requiring any party to poll the chain directly.

Everything that requires trust, meaning custody of funds and the validity of a transfer, is enforced by Robinhood Chain and HoodedCash's on-chain contracts — with correctness ultimately secured by Ethereum through the rollup's fraud-proof settlement. Everything else, UI rendering, notifications, indexing, is a convenience layer on top.

***

## Stack

```
+-----------------------------------------------+
|              HoodedCash App Layer               |
|      Web app . Mobile (iOS/Android) . SDK      |
+---------------------+---------------------------+
                       |
+---------------------v---------------------------+
|              HoodedCash API Layer                |
|   REST + WebSocket . Agent API . Webhooks       |
+---------------------+---------------------------+
                       |
+---------------------v---------------------------+
|            HoodedCash Core Services              |
|                                                 |
|  Wallet Engine   Privacy Engine   Agent Engine  |
|  (key mgmt,      (ZK proof gen,   (spend        |
|   tx building)    client-side)    policies,     |
|                                    x402 handler) |
|                                                 |
|  Indexer (contract event streams + PostgreSQL)  |
+---------------------+---------------------------+
                       |
+---------------------v---------------------------+
|            Robinhood Chain Mainnet              |
|  Confidential Tokens . ZK Verifier . x402       |
+-----------------------------------------------+
```

***

## Trust model

* **Users** don't need to trust HoodedCash with their funds. Keys are generated and held on-device; HoodedCash's servers see signed transactions, never private keys.
* **Users** don't need to trust HoodedCash with their transaction amounts. Proof generation and decryption happen client-side. HoodedCash's backend only ever handles ciphertext.
* **Agents** operate under spend policies enforced at the signing layer and in the account's on-chain validation contract, not by HoodedCash's discretion after the fact. A transaction that violates policy is never produced.

***

## Further reading

* [On-Chain Architecture](/protocol-and-architecture/on-chain-architecture.md): the contract state layout underneath HoodedCash
* [Trust & Security Model](/protocol-and-architecture/trust-and-security.md): the full security layer breakdown


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