TrustSignal Oracle

Accountable anonymity for institutional DeFi — enabling deposit tokens, cross-border payments, and regulatory-grade tokenization without surveillance



Executive Summary

Financial institutions worldwide are exploring tokenized money, digital deposits, and blockchain-based settlement. Yet all face the same systemic barrier:

How can regulated assets move on public chains without exposing identity and violating privacy laws?

  • Traditional KYC/KYB centralizes sensitive data.
  • Public blockchains protect privacy but lack accountability.
  • Regulators require cross-border compliance and traceability.
  • Banks cannot operate in a system built on surveillance.
  • Institutions need decentralization, but with guardrails.
TrustSignal resolves this global contradiction.

It delivers accountable anonymity — compliance enforced automatically by smart contracts, privacy preserved through zero-knowledge proofs, and identity secured by sovereign Notary Nodes.

The result:
A regulatory-grade compliance layer that enables deposit tokens, institutional DeFi, cross-border payments, and sovereign digital assets on XDC — and later on additional chains.


1. What TrustSignal Is

TrustSignal is a zero-knowledge identity, compliance, and risk oracle. It gives smart contracts the ability to enforce financial regulations without ever revealing the identity of users or businesses.

It operates through three architectural pillars:


A. Notarized Sovereign Identity Document (NSID)

NSID is a decentralized identity system where each individual or business anchors their identity to a sovereign Notary Node of their choosing (e.g., EU, Canada, DRC, Australia, etc.).

A Notary Node:
  • Performs the KYC/KYB verification
  • Holds the identity securely under sovereign law
  • Maintains legal accountability
  • Issues zero-knowledge proofs attesting to identity validity
  • Never exposes identity to the blockchain
This ensures:
  • No global identity registry
  • No centralized storage of sensitive data
  • No cross-border exposure beyond what regulations require
  • Accountability remains with the correct jurisdiction
  • Identity is sovereign, not corporate
NSID is the foundation of “Digital Identity 2.0” — anonymity on-chain, accountability off-chain.


B. Zero-Knowledge Proof Authentication (ZKP)

TrustSignal uses ZKPs generated and signed by the sovereign Notary Node.

This matters for institutions:
There is third-party legal validity behind every proof.

A smart contract does not see:
  • Name
  • Address
  • Passport
  • Corporate structure
  • Shareholder records
It sees only the attestation, for example:
  • “Identity verified”
  • “Business verified”
  • “Authorized representative”
  • “Not sanctioned according to the issuer’s jurisdiction”
  • “Threshold exceeded – verification required”
This legally anchored ZKP allows institutions to meet compliance requirements while protecting privacy.


C. TrustSignal Risk Levels (Green / Yellow / Red)

Risk levels are not universal. They are defined by the issuer of each token and enforced by the TrustSignal Oracle.

Key principles:
  • Green: Fully authenticated identity or business via NSID.
  • Yellow: Unauthenticated path — allowed only for small-value, low-risk transactions if the issuer permits it.
  • Red: High-risk or blocked based on issuer policy.
Jurisdiction-based sanctions logic Sanctioning is not global. It is determined by the issuer’s jurisdictional perspective. Example (not to be included, but for clarity):
  • A U.S.-regulated deposit token may block transfers involving Russian entities.
  • A BRICS-regulated token may not.
The logic of what constitutes “Prohibited,” “Permitted,” or “Review Required” is tied to:
  • The Notary Node’s sovereignty
  • The token issuer’s compliance rules
  • The regulatory framework of the jurisdiction involved
  • Real-time screening performed by the Notary Node
TrustSignal enforces this risk-adjusted, issuer-specific, jurisdiction-specific logic automatically via smart contracts.

Risk-based gating

Transactions are evaluated using:
  • Wallet status (Green/Yellow/Red)
  • Sender & receiver validation levels
  • Transaction size
  • Aggregate volume
  • Jurisdictional obligations
  • Token-issuer rules
This mirrors real-world banking compliance — now decentralized and privacy-preserving.


2. What TrustSignal Enables

TrustSignal brings a complete compliance layer to any chain it integrates with. XDC is the first, but not the last.

It enables:

A. Deposit Tokens With Embedded Zero-Knowledge Compliance

Deposit tokens require:

  • KYC/KYB
  • Threshold checks
  • Sanctions and PEP screening
  • Travel Rule compliance
  • Jurisdiction-aligned disclosure
  • Retail-level frictionless flow
TrustSignal provides all of this while preserving user anonymity.
Banks, fintechs, central banks, telcos, and money operators can now:
  • Issue deposit tokens
  • Move value globally
  • Stay compliant with their jurisdiction’s rules
  • Participate in decentralized liquidity
  • Maintain full sovereignty of user identity



B. Need-to-Know Cross-Border Payments

TrustSignal enables:
  • FATF-aligned compliance
  • AUSTRAC and FINTRAC rules
  • EU AML / 6AMLD alignment
  • Country-specific disclosure obligations
  • Risk-based KYC escalation
  • Zero-knowledge data sharing
Low-value transactions are frictionless.
High-value transactions require authentication.
Cross-border flows are disclosed only to relevant jurisdictions.

This is how global correspondent banking works — now automated on-chain.


C. Institutional DeFi with Real Risk Controls

TrustSignal enables:
  • High-value authenticated transactions
  • Institutional liquidity pools
  • Controlled access to lending and borrowing
  • Treasury-grade tokenization
  • KYC/KYB enforced without exposing identity
Institutions retain privacy while regulators receive the compliance they require.


3. SGRT — The First Sovereign Deposit Token Using TrustSignal

SGRT (Sovereign Gold Reserve Token) is the first practical example of TrustSignal powering a sovereign monetary instrument.
More will follow. This is only the beginning.

Key characteristics of SGRT:
  • Issued under the DRC’s AXIS Program
    – https://axis.gouv.cd
  • Backed by in-ground gold reserves
  • Guaranteed at a sovereign 4:1 ratio
  • Repayment linked to actual extraction
    – 1 SGRT = 1 gram of gold
    – For every 4 grams mined, 1 gram is allocated to SGRT repayment
  • Legally a monetary instrument, not a security
  • Fits within traditional monetary frameworks
  • Initially issued in a closed loop pending TrustSignal audit
  • Migrates to XDC Mainnet once TrustSignal is fully audited
Why TrustSignal matters for SGRT and the AXIS Program
TrustSignal allows the government to:
  • Control distribution by jurisdiction
  • Permit or block flows based on sovereign rules
  • Protect identity and business data
  • Authenticate high-value transfers
  • Allow low-value transactions freely
  • Support public distribution of sovereign tokens
  • Expand to future AXIS assets: cocoa, coffee, carbon, and more
The SGRT and the upcoming FCRT (Forest Carbon Reserve Token) demonstrate how sovereign digital assets can flow globally while respecting the issuer’s compliance framework.

TrustSignal is the technological backbone enabling this.


4. Comparison With Chainlink and Other Oracle Models

Chainlink is the leading data oracle, and its LEI (Legal Entity Identifier) attestation product is often referenced as “identity on-chain.”
However:
Chainlink LEI attestation:
  • Validates only legal entities
  • Uses public corporate data
  • Provides no privacy
  • Offers no identity sovereignty
  • Has no ZKP
  • Has no real KYB or representative authentication
  • Cannot enforce risk-based transaction rules
  • Cannot support deposit-token compliance
Reference:
https://chain.link/case-studies/gs1-lei
TrustSignal goes far beyond:
Capability Chainlink LEI TrustSignal
Individuals ✘ ✔
Private businesses Limited ✔
NSID sovereign identity ✘ ✔
Zero-knowledge proofs ✘ ✔
Wallet risk scoring ✘ ✔
Jurisdiction-based sanctions logic ✘ ✔
Threshold-based controls ✘ ✔
Identity sovereignty ✘ ✔
Cross-border disclosure control ✘ ✔
Deposit token compliance ✘ ✔
Legal authority validation ✘ ✔
TrustSignal is the first oracle designed explicitly for regulated monetary instruments.


Conclusion — Data Sovereignty, Identity Sovereignty, and the New Era of Institutional DeFi

As the world confronts new challenges around AI, data residency, and digital identity, one truth becomes clear:
Institutions must control their identity data — not global platforms. TrustSignal ensures:
  • Identity stays under sovereign custody
  • Data remains within the user’s jurisdiction
  • Cross-border exposure occurs only when legally required
  • Regulators receive the necessary signals — not personal information
  • Each token issuer defines its own sanctions logic
  • Multiple regimes can coexist without a global rulebook
  • Privacy is protected while accountability is preserved
  • Digital Identity 2.0 (NSID) is the anchor for a compliant global financial system
This model respects:
  • Sovereignty of nations
  • Sovereignty of data
  • Sovereignty of identity
  • Sovereignty of institutions
  • Privacy rights of individuals
  • International compliance frameworks
  • Decentralized infrastructure
XDC is the first public chain to implement TrustSignal, but the architecture is chain-agnostic and designed for global adoption.

From sovereign gold tokens to bank-issued deposit tokens, from cocoa to carbon, from trade finance to institutional DeFi — TrustSignal is the compliance infrastructure enabling real-world assets to move securely on public chains.

TrustSignal is the missing bridge between traditional finance and decentralized finance — enforcing regulatory-grade accountability with zero surveillance and total sovereignty of identity.

White paper link: Digital Identity 2.0 / NSID documentation


TrustSignal Oracle

The Economy of Trust