Liquefaction Meets Sapphire

Redefining Digital Asset Ownership on the Oasis Network

In a groundbreaking leap, the Oasis Protocol Foundation has funded a research initiative led by Cornell Tech (with IC3) to bring Liquefaction onto Oasis Sapphire, realizing a new era in secure, temporary asset ownership.

1. What Is Liquefaction?

The wallet architecture known as Liquefaction, developed by Cornell Tech researchers James Austegen and Ari Juels, allows for the temporary, cryptographically enforced delegation of asset usage without transferring private keys or permanent ownership.

Core Principles:

• Key escrow within a TEE: Private keys are generated inside secure enclaves and never released.
• Scoped delegation: Only transactions that follow specified guidelines are signed by the wallet.
• Smart-contract mediation: Solidity-encoded leasing logic guarantees time-based enforcement.

This maintains complete ownership while enabling use cases such as token-gated memberships, NFT rentals, DAO delegation, and more.

2. Why Sapphire Is a Perfect Fit

Oasis Sapphire is a confidential, EVM-compatible “ParaTime” that runs smart contracts within Intel SGX TEEs. Its main strengths:

• End-to-end encryption keeps contract state private.
• EVM support allows existing Solidity tools.
• Secure precompiles for RNG, signing, verification, etc.

This combination enables developers to create Liquefaction wallets that seamlessly preserve key security and privacy.

3. A Proof-of-Concept: Take My Ape

The research team introduced Take My Ape, a demo platform that allows the rental of Bored Ape NFTs, to demonstrate the idea:

• Temporary access: Without changing ownership, the borrower obtains BAYC NFT privileges, signing, access control, and gating.
• TEE enforcement: The private key is kept in the Sapphire enclave, which also upholds policy regulations.
• Secondary-price auction: The Enclave automatically transfers the NFT lease after a sealed-bid second-price auction with a large number of bidders.
• Seamless revert: Control passes back to the next bidder when the lease expires.

This demonstrates a polished extension of Liquefaction’s general model.

4. Under-the-Hood: Liquefaction on Sapphire

Architecture Overview

1.TEE Wallet Contract

• Created in Solidity running in a Sapphire enclave, it holds the asset owner’s private key and enforces delegation policies.

2.Access Manager & Policy Contracts

• On lease request, the enclave generates a bounded-use key (sk) to control access.
• Enforced scopes include time intervals, permitted actions (e.g., transferFrom, sign), and auction terms (docs.oasis.io).

3.Smart Contracts + Auctions

• Borrowers interact with contracts to request assets.
• Enclave runs sealed-bid auctions; winner gets scoped access, enforced cryptographically.

4.Reversion Logic

• Upon lease termination, enclave automatically revokes sk and transfers full control back to owner or next lessee.

contract TEEWallet {
    bytes private enclaveKey;
    struct Lease { address lessee; uint256 expiry; };
    mapping(uint256 => Lease) public leases;

    function requestLease(uint256 assetId, uint256 bid) external { /* off-chain TEE auction logic */ }
    function leaseAsset(uint256 assetId, address lessee, uint256 expiry) external /* only TEE */ {
        leases[assetId] = Lease(lessee, expiry);
    }
    function signedTransfer(uint256 assetId, address to) external {
        require(block.timestamp <= leases[assetId].expiry, "Lease expired");
        require(msg.sender == leases[assetId].lessee, "Not lessee");
        // sign and execute transfer via enclaveKey
    }
}

This pseudocode illustrates how signing and access are limited within the enclave’s policy domain.

5. Broadening the Perspective: Use Cases

This framework for liquefaction extends well beyond NFT rentals:

• Token-gated memberships: To gain access to private communities or chat rooms, borrow signaling tokens.
• Vesting & OTC trades: Permit temporary access without complete token custody during vesting.
• DAO delegation: Delegating voting rights temporarily without transferring tokens.
• Identity delegation: Securely grant reputation tokens or limited-use credentials.
• Cross-chain smart accounts: To abstract accounts across several chains, use Liquefaction as a building block.

Liquefaction creates fluid asset utility by separating ownership and control, opening up new decentralized interactions.

6. Next Steps & Open Questions

Developer Tooling:

• Extend hardhat/ethers integration: Example tutorials already demonstrate how to build basic confidential dApps on Sapphire.

Security & Governance:

• Formal security audits of enclave policies.
• On-chain/verifiable attestation of enclaves to ensure compliance.

Economics & UX:

• Auction design refinement e.g., Dutch auctions, time-decaying pricing.
• Gas fee models for frequent leases.
• UX tooling for lendees and licensors.

7. Conclusion

This initiative proves Liquefaction is more than theoretical. By leveraging Sapphire’s confidential EVM, Take My Ape delivers a functional, policy-controlled leasing of valuable NFTs, all without surrendering private keys or ownership.

You can expect this to catalyze secure, offchain/onchain workflows that rely on temporary access rights, such as rental marketplaces, gated communities, DAO delegation, and composable onchain identity.

This collaboration between Oasis, Cornell Tech, and IC3, supported by the Oasis grant, ushers in a novel paradigm in digital asset control and marks an essential step toward more flexible, privacy-first Web3 ecosystems.