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Overview

PolicyKit is a comprehensive framework for enforcing transaction policies on smart accounts and AI agents. It combines on-chain smart contracts with off-chain computation to provide a flexible, secure, and decentralized policy enforcement layer.

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Design Principles

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Policies as Code

Policies are defined programmatically in TypeScript, not configured through a UI. This means you can:

• Version control your policies alongside your application code
• Test policies locally before deploying
• Review policy changes through pull requests
• Compose policies from reusable building blocks

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Non-Custodial

PolicyKit never takes custody of private keys or account access. Account owners register policies on-chain and can update or remove them at any time. The policy enforcement layer operates as a guard or module that validates transactions before execution.

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Decentralized Evaluation

Off-chain rules are evaluated by the Lit Protocol network — a decentralized network of nodes that execute code in secure enclaves. This ensures that off-chain evaluation is:

• Censorship resistant — no single party can block evaluation
• Tamper-proof — computation happens in TEEs (Trusted Execution Environments)
• Verifiable — results are signed by the Lit network and verified on-chain

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Fail-Safe Design

PolicyKit supports two fail modes:

• Closed (default): If the off-chain evaluation layer is unreachable, transactions are blocked. Best for high-security use cases.
• Open: If unreachable, transactions are allowed with on-chain-only checks. Useful when availability is critical.

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Architecture

PolicyKit consists of four main components:

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1. SDK (@policykit/sdk)

The TypeScript SDK is the primary interface for building and managing policies. It provides:

• PolicyBuilder — Fluent API for constructing policies
• PolicyKit — High-level client for deploying and managing policies
• PolicyEngineClient — Typed wrapper for smart contract interactions
• PolicySimulator — Local evaluation engine for testing
• LitClient — Integration with Lit Protocol v8
• IPFSClient — IPFS pinning and retrieval

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2. Smart Contracts (@policykit/contracts)

Solidity contracts deployed on-chain that enforce policy rules. Available as an npm package for use in your own Solidity projects:

• PolicyEngine — Core contract that stores and evaluates policies
• PolicyGuard — Guard module for smart accounts
• PolicyKit7579Module — ERC-7579 compatible module
• Rule evaluators — Individual contracts for each rule type

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3. Lit Actions (@policykit/lit-actions)

TypeScript code executed on the Lit Protocol network for off-chain rule evaluation. Available as an npm package containing the pre-built action bundle and source rules. The Lit Action:

1. Fetches the full policy from IPFS
2. Evaluates Tier 3 (off-chain) rules
3. If all rules pass, threshold-signs an EIP-712 PolicyApproval
4. Returns the signed attestation for on-chain verification

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4. CLI (@policykit/cli)

A command-line tool for common policy operations:

• Initialize new policies from templates
• Deploy policies (IPFS + on-chain)
• Simulate transactions against policies
• Inspect and manage on-chain policies

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Supported Chains

PolicyKit currently supports:

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Next Steps