Introduction

An Ownership Proof is a cryptographic proof that demonstrates the prover owns a specific amount of an asset, without revealing their full balance.

This is a privacy-preserving mechanism that allows you to selectively disclose only the amount you choose, making it ideal for scenarios like:

• Proving sufficient funds for a purchase or loan
• KYC/AML compliance (proving minimum balance threshold)
• Selective sharing of balance information with third parties

Ownership proofs are encoded as bech32 strings with the prefix proof:, making them easy to share with other parties.

These Ownership Proofs are generated locally by the user and do not require an on-chain transaction, ensuring privacy and convenience.

An Ownership Proof is valid only for a specific topoheight, as it is tied to the balance ciphertext stored at that topoheight.

How it works

When you create an ownership proof, you specify a target amount.

The proof demonstrates that you own at least that amount of a given asset, without disclosing your actual balance.

Topoheight specificity

Ownership proofs are created against a specific topoheight because they are validated against the balance ciphertext stored at that topoheight. This means:

• A proof is only valid for the topoheight it was created against
• If you check the same asset balance at a later topoheight, you must generate a new proof
• This ensures temporal integrity and prevents replay attacks

Privacy preservation

The proof only reveals the amount you specified when creating it. Your actual balance remains hidden:

• You prove you own ≥ amount of asset X
• The verifier learns only that you meet the threshold
• Your true balance is never disclosed
• It is only valid for a specific time (topoheight), ensuring freshness

Advantages

• Selective disclosure: Share balance information on your terms
• Privacy-preserving: Full balance remains confidential
• Temporary validity: Tied to a specific topoheight for freshness
• Easy sharing: Bech32 format for convenient transmission
• No transaction required: Proof generation is local and doesn’t create a blockchain transaction
• Complete assets support: Supports any asset available in the user wallet.
• Contract compatibility: Ownership Proofs can also be shared to a smart contract for various use cases, as it is directly supported by the protocol.

Use cases

KYC/AML verification

A user proves they have a minimum balance (e.g., 1000 XELIS) without revealing their total holdings:

User generates proof for 1000 XELIS at topoheight 50000
↓
Shares proof: proof:1qyqszqgpq...
↓
Service verifies proof against the ciphertext at topoheight 50000
↓
Verification passes, KYC requirement met ✓

Collateral verification

A lending protocol verifies a user has sufficient collateral without knowing their total balance:

User proof: "I own ≥ 500 XELIS at topoheight 50050"
↓
Protocol verifies proof ✓
↓
User can borrow against their collateral without full balance disclosure

Multi-party settlement

Multiple parties prove they have sufficient funds for a transaction without revealing balances to each other:

Alice: proof for 100 XELIS at topoheight 50100
Bob:   proof for 50 XELIS at topoheight 50100
↓
Both proofs verified at the same topoheight
↓
Settlement can proceed with privacy intact

Limitations

• Temporary validity: Only valid against the topoheight it was created for
• Forward-only: After balance changes (new blocks), you need a new proof
• No backward proof: Cannot use an old proof against a future (or older) topoheight