Clearinghouse

Vest’s long-term vision involves the development of a decentralized clearinghouse model. This model would allow multiple parties to submit zkProofs of solvency based on a shared risk framework. More specifically, each party would prove solvency over a future time window (for instance, $\left[\!\left[ t, t+\tau \right) \!\right]$) based on risk-indifference pricing and capital buffers maintained by the AMM and LPs. These zkProofs allow for privacy-preserving risk attribution and could significantly reduce capital costs by providing cryptographic guarantees of solvency.

Settlement would no longer follow traditional $t+1$ clearing cycles but instead be executed as soon as a proof is verified — effectively reducing clearing latency to $t+$ verification time. Parties could also integrate custom on/off-ramp systems to meet margin requirements in ways that fit their operational needs.

This model extends the logic already implemented in zkRisk, where off-chain computations for risk measures (e.g., Entropic Value-at-Risk) are verified on-chain using zkSNARKs. The same architecture could underpin a multi-party clearing system, scaling the exchange’s risk framework to external market participants.

In the future, clearing can involve multiple parties submitting zkProofs of solvency following our basic framework and abiding to a central model agreed upon by all parties. Settlement will then be done T + [time it takes to verify proof instead] of T + 1 days using traditional finance rails. zkProofs protect parties from revealing sensitive info but will drastically lower cost of margin by signaling their solvency over a future period of time (this is defined by the aforementioned model). This enables effective on/off ramp systems for transferring margin and meeting margin requirements to be custom built for each party.