MLabs: Encrypted Programmable Tokens with TFHE
MLabs LTD
ID: 69fb450f8a0de51b89857e10
CIP-113 — the Programmable Tokens standard launched by the Cardano Foundation in March 2026 — gives Cardano a foundation for token-like assets with on-chain compliance and transfer logic. It does not, however, address privacy: balances and transfer amounts are public, just like ERC-20 on Ethereum. For institutional settlement, regulated stablecoins, payroll, and tokenized real-world assets, public balances are a deal-breaker. Ethereum addressed this with ERC-7984: a confidential token standard where balances and transfers stay encrypted while smart contracts continue to operate on them. The cryptographic technology that enables this — Fully Homomorphic Encryption, specifically the TFHE variant — is also actively used on Solana, Stellar, and other chains. Cardano cannot use Zama's TFHE library directly because it is patent-restricted to non-commercial use. The original Apache 2.0 reference TFHE library is patent-clean but not production-grade. We will bridge that gap by: 1. **Building a clean-room Haskell TFHE library** modeled on the Apache 2.0 reference — patent-clean, production-quality, published openly on Hackage. 2. **Submitting a CIP** extending CIP-113 with the encryption primitives needed to support ERC-7984-style confidential token capabilities on Cardano. 3. **Implementing those primitives into Plutus Core** so Cardano scripts can use them natively. The result: Cardano joins the small set of chains capable of confidential on-chain finance, with capabilities matching ERC-7984, on a fully open and patent-unencumbered foundation. The work is delivered by the same team that previously shipped Plutus Core primitive operations (secp256k1/ECDSA and bit-level manipulation) — currently the only organization outside IOG to have done so.
Scorecard
How this score works
Each criterion is worth between 1 and 4 points. The score is the points earned out of the points on criteria that have been answered — shown as a percentage. Green is 75% or higher, Amber is 50–74%, and Red is below 50%.
Some criteria are checked automatically against the proposal data (open source, doxxed team, treasury return clauses, etc.). Others are human-judgment calls — value for money, public good, whether the deliverables are realistic. Those stay blank until a DRep ticks them.
Criteria can also be marked Not applicablewhen they don't fit the proposal — for example, "open source" doesn't apply to a DAO governance proposal with no software output. Those are excluded from the score entirely, neither helping nor hurting.
Green requires 80% coverage. If less than 80% of the applicable criteria (by points) have been answered, the verdict stays at Amber — "pending review" — even when every answered criterion passes. This proposal's coverage is currently 68% (13 of 19 applicable criteria answered).
Vote intent
Export & audit
↓ Download scorecard.mdRaw payload · Treasury (false) / Admin (intersect)
{
"_meta": {
"schema_version": "1.2.0",
"proposal_id": "69fb450f8a0de51b89857e10",
"proposal_title": "MLabs: Encrypted Programmable Tokens with TFHE",
"proposer": "MLabs LTD",
"filename": "hydra-mlabs-tfhe-encrypted-tokens.json",
"processed_date": "2026-05-11",
"title": "MLabs: Encrypted Programmable Tokens with TFHE"
},
"ask": {
"ada_amount": 1343564,
"usd_amount": 241842,
"ada_usd_rate_assumed": 0.18,
"usd_peg_vs_market": "conservative",
"duration_months": 8,
"milestone_payments_disclosed": true,
"milestone_schedule_disclosed": "amounts_only",
"milestone_notes": "5 milestones (2-8 weeks each) with explicit Hackage release + PR merge acceptance criteria. Eryx (cryptography-specialist auditor) audits each milestone before payment release. Note: comment from perturbing flags that the risk-assessment milestone is at M5 rather than M1 — questioning whether TFHE viability should be assessed earlier."
},
"identity": {
"doxxed": true,
"doxxed_notes": "MLabs LTD; same team that shipped secp256k1/ECDSA and bit-level Plutus Core primitives."
},
"metadata": {
"open_source": "yes",
"has_prior_delivery": true,
"prior_delivery_notes": "MLabs is sole organization outside IOG to ship Plutus Core primitive operations to mainnet (secp256k1/ECDSA and bit-level manipulation). 44 Catalyst proposals delivered.",
"admin_model": "intersect",
"admin_notes": "Intersect administers with 3% fee (39,133 ADA); each milestone independently audited by Eryx (cryptography specialist) before payment release.",
"duplicate_of_existing_solution": {
"value": "no",
"confidence": "high",
"set_by": "ai"
}
},
"treasury_return": {
"has_return_clause": false,
"treasury_favourability": "weak",
"return_notes": "Proposer answered 'No' on returning unused funds to Treasury."
},
"relationships": {
"competes_with": []
},
"ecosystem_demand": {
"evidence_level": "weak",
"evidence_level_confidence": "medium",
"evidence_level_set_by": "ai",
"active_users_known": false,
"active_users_examples": [],
"developer_demand_signals": [
"CIP-113 launched March 2026 establishes Cardano programmable token foundation",
"ERC-7984 confidential token standard on Ethereum cited as proof of pattern",
"TFHE deployed on Ethereum (Zama), Solana, Stellar — Cardano absence is a capability gap",
"Regulated asset/institutional settlement use cases cited as motivation"
],
"adoption_risk_notes": "Strong case for capability gap (Cardano lacks confidential token standard while peer chains have one). However, no named Cardano-based RWA project, stablecoin issuer, or institutional integrator is cited as committed to using the deliverable. TFHE operations are computationally expensive — the comment from perturbing (DRep) flags a real concern that TFHE may not fit in Plutus script execution budgets (0.01s per node propagation), and that this risk assessment is positioned at M5 rather than M1. Proposer acknowledges performance honestly. Demand is structural/forward-looking rather than tied to committed users."
},
"incumbents": {
"has_existing_solution": "no",
"has_existing_solution_confidence": "high",
"has_existing_solution_set_by": "ai",
"existing_solutions": [
{
"name": "Zama TFHE-rs library (Ethereum/other chains)",
"status": "shipped",
"overlap": "partial",
"notes": "Zama's TFHE library is patent-restricted to non-commercial use — Cardano cannot use it directly. This proposal builds a clean-room Haskell TFHE library based on Apache 2.0 reference."
},
{
"name": "ERC-7984 (Ethereum confidential token standard)",
"status": "shipped",
"overlap": "partial",
"notes": "Different chain — referenced as the pattern this proposal brings to Cardano."
}
],
"differentiation_claim": "Clean-room patent-clean Haskell TFHE library based on Apache 2.0 reference, CIP extending CIP-113 with encryption primitives, Plutus Core implementation. Delivered by team with proven Plutus Core primitive shipping history.",
"differentiation_credibility": "high"
},
"risk_flags": {
"aggressive_peg": false,
"self_administered_no_oversight": false,
"incumbent_already_delivering": false,
"no_evidence_of_demand": true,
"competes_with_in_batch": false,
"concentration_risk": false
},
"id": "hydra-mlabs-tfhe-encrypted-tokens",
"source": {
"hydra_id": "69fb450f8a0de51b89857e10",
"channels": [
"hydra"
]
}
}