Policy2Protocol

Natural-language compliance for cross-chain DeFi treasuries

---

"If utilization exceeds 85% or stablecoin deviation is above 2%, immediately withdraw and rebalance to the safest chain."

That sentence is all you need. Policy2Protocol turns it into a live, autonomous, cross-chain enforcement workflow.

---

The Problem

Multi-chain treasuries are everywhere. The tooling isn't.

• Passive dashboards show numbers but don't act.
• Governance is slow — by the time a vote passes, the opportunity (or the risk) is gone.
• No verifiable compliance layer exists that autonomously monitors utilization, deviation, TVL, and APY across chains and acts when thresholds are breached.

The Solution

Policy2Protocol lets DAOs and protocols describe treasury risk policies in plain English and converts them into autonomous, consensus-backed, cross-chain enforcement.

Plain English Policy
        |
   AI Parser (Claude)
        |
  Structured JSON Config
        |
  CRE Workflow (DON consensus)
        |
  On-chain Execution (CCIP cross-chain)
        |
  Verifiable Compliance Logs

How It Works

1. Define Policy

A DAO risk manager types a policy in plain English:

"Monitor every 5 minutes. Rebalance to the highest-APR chain when the difference exceeds 50 basis points."

2. AI Parsing

The AI layer (Claude) parses the natural language into a structured CRE workflow config — extracting schedule, thresholds, metrics, and whitelisted actions. Falls back to a deterministic rule-based parser if no API key is set.

3. CRE Workflow Execution

The generated config drives a Chainlink Runtime Environment workflow:

• Cron-triggered on a schedule (e.g., every 5 minutes)
• Reads currentLiquidityRate from lending pools on each configured chain
• DON consensus evaluates whether policy conditions are met
• Encodes a RebalanceParams report when thresholds are breached

4. Cross-Chain Enforcement

The ProtocolSmartWallet receives the CRE report via Keystone forwarder:

• Withdraws funds from the source pool
• Sends cross-chain via CCIP to the destination chain
• Destination PSW automatically deposits into the higher-yield pool

5. Verifiable Audit Trail

Every action emits on-chain events (ReportReceived, MessageSent, MessageReceived) — queryable, immutable compliance logs.

---

Architecture

                    +-------------------+
                    |   Next.js Frontend |
                    |   (Policy Input)   |
                    +--------+----------+
                             |
                    POST /api/parse-policy
                             |
                    +--------v----------+
                    |   AI Parser        |
                    |   (Claude / Rules) |
                    +--------+----------+
                             |
                      CRE Config JSON
                             |
              +--------------+--------------+
              |                             |
     +--------v--------+          +--------v--------+
     | CRE Workflow     |          | POST /api/deploy |
     | (DON Consensus)  |          | (cre CLI)        |
     +--------+---------+          +-----------------+
              |
     Read APR per chain
     Evaluate thresholds
     Encode RebalanceParams
              |
     +--------v---------+
     | PSW.onReport()    |
     | Withdraw from Pool|
     +--------+----------+
              |
        CCIP Transfer
              |
     +--------v-----------+
     | Destination PSW     |
     | Deposit into Pool   |
     +---------------------+

---

Project Structure

chainlink-cre/
├── frontend/           Next.js app — policy input, AI parse, deploy, logs, settings
├── contracts/          Foundry — MockPool, ProtocolSmartWallet, CCIP integration
├── workflow-ts/        CRE TypeScript workflow — cron, metrics, cross-chain rebalance
└── DEMO_GUIDE.md       Step-by-step demo runbook

---

Tech Stack

Layer	Technology
Frontend	Next.js 16, TypeScript, Tailwind CSS v4, RainbowKit, Wagmi
AI	Anthropic Claude (structured policy parsing)
Workflow	Chainlink CRE SDK, Bun, Viem, Zod
Contracts	Solidity 0.8.26, Foundry, OpenZeppelin 5.x
Cross-chain	Chainlink CCIP (token transfers + messaging)
Testnets	Ethereum Sepolia, Base Sepolia

---

Quick Start

Frontend

cd frontend
npm install
npm run dev
# Open http://localhost:3000

Set environment variables in frontend/.env.local:

ANTHROPIC_API_KEY=sk-ant-...                    # optional — enables AI parsing
NEXT_PUBLIC_WALLETCONNECT_PROJECT_ID=...        # required — get one at cloud.walletconnect.com

Contracts

cd contracts
forge test -vv

Deploy to testnets:

export PRIVATE_KEY=0x...
forge script scripts/multi-chain-token-manager/DeployTokenManagerContracts.s.sol \
  --multi --broadcast --verify

CRE Workflow

# Install CRE CLI
curl -sSL https://cre.chain.link/install.sh | bash

cd workflow-ts/workflow && bun install
cd ..
cre workflow simulate ./workflow --target staging-settings   # test
cre workflow deploy ./workflow --target staging-settings     # deploy

---

Deployed Contracts (Testnet)

Chain	MockPool	ProtocolSmartWallet
Ethereum Sepolia	0xC0a2EF140487C69B46eEC6e150018b82F791984e	0x4561aAB2113F52Ae15063720fd771E17BF505B29
Base Sepolia	0xB4467F6331f0228Af9985f6bA2AF788FFdB880d9	0xb1D927779797E085De790f4bdf6Cb02da1fC8760

Asset: CCIP-BnM token | Deployer: 0xE2b39f4cfFA5B17434e47Ab5F54b984155e4b7aD

---

Frontend Pages

Page	Route	What It Does
Landing	/	Hero, protocol flow visualization, architecture cards, feature breakdown
Get Started	/get-started	3-step flow: type policy in English -> review generated CRE config -> deploy workflow
Compliance Logs	/logs	Live on-chain events from PSW contracts (ReportReceived, MessageSent, MessageReceived)
Settings	/settings	Toggle chains and metric thresholds (persisted to localStorage)

---

API Routes

Endpoint	Method	Purpose
/api/parse-policy	POST	Parses natural language policy into CRE workflow config JSON
/api/policy-to-strategy	POST	Converts structured policy JSON into CRE config with implementation steps
/api/logs	GET	Fetches real on-chain events from PSW contracts on all configured chains
/api/deploy-workflow	POST	Writes config and runs cre workflow deploy (local dev only)

---

What Makes This Different

Feature	Traditional	Policy2Protocol
Policy definition	Code or governance proposals	Plain English
Monitoring	Manual dashboards	Autonomous CRE cron
Decision making	Human or centralized bot	DON consensus (decentralized)
Execution	Single-chain scripts	Cross-chain via CCIP
Audit trail	Off-chain logs	On-chain events (verifiable)
Speed	Hours/days (governance)	Minutes (automated)

---

Security Considerations

This is a hackathon project / educational demo. Not production-ready.

1. Contracts are unaudited examples — use audited contracts for production
2. Keep API keys and private keys out of version control
3. Use your own RPC endpoints for stable CRE deployment
4. The AI parser is constrained to whitelisted metrics and actions only

---

License

MIT

---

_{Built with Chainlink CRE, CCIP, and Keystone}