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Three-Tier Rule System

PolicyKit organizes rules into three tiers based on where and how they are evaluated. This tiered approach balances security, cost, and capability.

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Overview

Rules are evaluated sequentially: Tier 1 first, then Tier 2, then Tier 3. If any rule fails at any tier, the transaction is rejected immediately.

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Tier 1: Stateless On-Chain Rules

Stateless rules are the simplest and cheapest. They only look at the current transaction parameters — no storage reads needed.

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ALLOW_TARGETS

Whitelist specific contract addresses that the account can interact with.
Transactions to any address not in the list are rejected.

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DENY_TARGETS

Blacklist specific contract addresses.
Transactions to any address in the list are rejected. All others are allowed.
If both ALLOW_TARGETS and DENY_TARGETS are set, ALLOW_TARGETS is evaluated first. A transaction must be in the allow list AND not in the deny list.

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ALLOW_SELECTORS

Whitelist specific function selectors (first 4 bytes of calldata).

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DENY_SELECTORS

Blacklist specific function selectors.

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MAX_VALUE

Set a maximum ETH value per transaction.

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Tier 2: Stateful On-Chain Rules

Stateful rules use on-chain storage to track state across transactions. They cost more gas but enable time-based and cumulative constraints.

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SPEND_LIMIT

Limit how much of a specific token can be spent within a rolling time window.
The on-chain contract tracks cumulative spending and resets the counter when the time window expires.

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COOLDOWN

Enforce a minimum time between transactions.
This is useful for preventing rapid-fire transactions from compromised agents or scripts.

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Tier 3: Off-Chain Rules (Lit Protocol)

Off-chain rules are evaluated by the Lit Protocol network. They can access external data, perform simulations, and run arbitrary logic that would be impractical on-chain.

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MAX_SLIPPAGE_BPS

Check that a swap transaction doesn’t exceed a maximum slippage tolerance.
The Lit Action decodes the transaction calldata, compares input/output amounts, and checks against current market prices.

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REQUIRE_SIMULATION

Require that the transaction succeeds when simulated.
The Lit Action simulates the transaction using an RPC endpoint and rejects it if the simulation reverts.

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CUSTOM

Define custom rule logic hosted on IPFS.
Custom rules let you implement any evaluation logic. The code is fetched from IPFS and executed in the Lit Action’s secure environment.

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Choosing the Right Tier

Guidelines:
  • Use Tier 1 for simple access control (targets, selectors, value limits)
  • Use Tier 2 when you need time-based or cumulative constraints
  • Use Tier 3 when you need external data, simulation, or custom logic