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Smart Account Example

This example demonstrates how to set up a comprehensive policy for an ERC-7579 compatible smart account that interacts with DeFi protocols.

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Scenario

You have a smart account that:
  • Trades on Uniswap and lends on Aave
  • Should only interact with trusted protocols
  • Needs spending limits and slippage protection
  • Must simulate transactions before executing

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Policy Definition

import { PolicyBuilder } from "@policykit/sdk";
import { parseEther, parseUnits } from "viem";

const UNISWAP_ROUTER = "0x68b3465833fb72A70ecDF485E0e4C7bD8665Fc45";
const AAVE_POOL = "0x7d2768dE32b0b80b7a3454c06BdAc94A69DDc7A9";
const USDC = "0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48";
const WETH = "0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2";

const policy = new PolicyBuilder("defi-smart-account")
  // Only interact with trusted DeFi protocols
  .allowTargets([UNISWAP_ROUTER, AAVE_POOL, USDC, WETH])

  // Allow specific DeFi functions
  .allowSelectors([
    "0x38ed1739", // swapExactTokensForTokens
    "0x7ff36ab5", // swapExactETHForTokens
    "0xe8e33700", // addLiquidity
    "0x69328dec", // withdraw (Aave)
    "0x617ba037", // deposit (Aave)
  ])

  // Max 5 ETH per transaction
  .maxValue(parseEther("5"))

  // 100k USDC spending limit per day
  .spendLimit(USDC, parseUnits("100000", 6), 86400)

  // 5 minute cooldown between transactions
  .cooldown(300)

  // Max 0.5% slippage on swaps
  .maxSlippageBps(50)

  // Must simulate successfully
  .requireSimulation(true)

  // Block transactions if Lit Protocol is down
  .setFailMode("closed")

  .build();

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Deployment

import { PolicyKit } from "@policykit/sdk";
import { createPublicClient, createWalletClient, http } from "viem";
import { baseSepolia } from "viem/chains";

const pk = new PolicyKit({
  publicClient: createPublicClient({
    chain: baseSepolia,
    transport: http(process.env.RPC_URL),
  }),
  walletClient: createWalletClient({
    chain: baseSepolia,
    transport: http(process.env.RPC_URL),
    account: smartAccountAddress,
  }),
  engineAddress: "0xPolicyEngineAddress",
  ipfsBackends: [{ type: "pinata", jwt: process.env.PINATA_JWT }],
  litConfig: {
    network: "naga",
    litActionCID: process.env.LIT_ACTION_CID,
  },
});

const result = await pk.deployPolicy(policy);
console.log("Deployed:", result.cid);

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Transaction Flow

When the smart account executes a swap:
  1. The PolicyKit7579Module intercepts the transaction
  2. Tier 1: Checks target is Uniswap, selector is swapExactTokensForTokens, value is under 5 ETH
  3. Tier 2: Checks USDC spending is under 100k/day, and cooldown has elapsed
  4. Tier 3: Lit Protocol checks slippage is under 0.5% and simulates the transaction
  5. If all pass, the transaction executes

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Testing

import { PolicySimulator } from "@policykit/sdk";

const simulator = new PolicySimulator();

// Test: valid swap
const validSwap = await simulator.evaluate(policy, {
  target: UNISWAP_ROUTER,
  value: parseEther("1"),
  data: "0x38ed1739...", // swapExactTokensForTokens calldata
});
console.log(validSwap.allowed); // true

// Test: blocked target
const blockedTarget = await simulator.evaluate(policy, {
  target: "0xUnknownContract",
  value: 0n,
  data: "0x...",
});
console.log(blockedTarget.allowed); // false
console.log(blockedTarget.failedRules[0].rule); // "ALLOW_TARGETS"