Distributions Authority (DAL) — Security & Audit Framework (Phase 0 — High-Level)

Document Version: 1.0 Date: August 7, 2025 Author: CrownThrive, LLC — [email protected] Project: CHLOM™ — Compliance Hybrid Licensing & Ownership Model

1. Objective

Establish the high-level security architecture, auditing mechanisms, and monitoring systems that will safeguard DAL’s payout operations. In Phase 0, this document defines security principles, audit structures, and technical control points to be implemented in later phases.

2. Security Architecture Overview

• Smart Contract Safeguards
• Immutable logic for core payout functions.
• Multi-signature authorization for high-value transactions.
• Emergency stop (circuit breaker) function for fraud detection scenarios.
• Identity-Linked Access Control
• Fingerprint ID and DID-bound permissions for initiating or receiving payouts.
• Data Protection
• End-to-end encryption for financial and identity data.
• Secure hashing (SHA-3/Keccak256) for critical metadata.
• Transaction Integrity
• On-chain cryptographic proofs of payout accuracy.
• Real-time transaction monitoring and alerting.

3. Audit Framework

• On-Chain Logging
• All payout events recorded to CHLOM Ledger for immutable historical tracking.
• Automated Compliance Audits
• AI-driven rule-checking for each transaction.
• Third-Party Contract Audits
• Independent reviews before mainnet deployment.
• DAO Oversight
• Governance-enabled access to audit reports and dispute logs.

4. Continuous Monitoring

• Automated Alerting System
• Webhook and oracle-driven alerts for anomalies.
• Anomaly Detection
• Machine learning models trained to detect unusual payout patterns.
• Performance Metrics
• Real-time dashboard tracking payout latency, throughput, and error rates.

5. Sample Solidity Security Snippets

// Multi-signature payout approval modifier
modifier multiSigApproved() {
    require(approvals[msg.sender] == true, "Not authorized");
    require(approvalCount >= requiredApprovals, "Insufficient approvals");
    _;
}

// Circuit breaker to halt payouts in emergencies
bool public stopped = false;
modifier stopInEmergency() {
    require(!stopped, "Payouts are paused");
    _;
}

function toggleEmergencyStop() public onlyDAO {
    stopped = !stopped;
}

6. Phase Allocation

Phase 0 — Define security principles, audit scope, and monitoring requirements. Phase 1 — Implement basic security functions in smart contracts.

Phase 2 — Integrate monitoring tools and anomaly detection AI.

Phase 3 — Conduct penetration testing and red-team simulations.

Phase 4 — DAO integration for oversight and control.

Phase 5 — Continuous optimization and adaptive threat response.

Next Step: Proceed to UI/UX Specs for DAL Dashboard to define the high-level interface requirements for internal and external stakeholders.