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Compliantelligent Ideation Report

OVERVIEW

Compliantelligent is your intelligent AI platform which helps you and your web3 project to comply intelligently. It does so by scanning your Solidity project files and checks if it complies with certain EIPs (Ethereum Improvement Proposals) or not.

PROBLEM STATEMENT

How can AI and machine learning be applied to enhance compliance and risk management for financial institutions leveraging blockchain? (Northern Trust)

IDEATION/MOTIVATION

As compliance and risk management is a large area to build upon, we decided to focus on EIP compliance which is the most standard way to check if a smart contract is complying with an EIP or not. This could be helpful in many ways for regulators, investors, non-tech stakeholders, etc. as it can help check and verify if smart contracts adhere to certain EIP standard or not as specified by them. For example, let’s say if a project is launching a token and the token uses various standards such as ERC-20 and ERC-1155, a regulator can use this and check/verify if the token really uses these standards or there are other standards which it uses internally.

This can make a significant difference as often the projects can be untruthful or make mistakes (or even regulators can make mistake) as often the regulations are different for projects following different EIP standards.

Additionally, the projects can also use it for self-compliance if the regulators or the investing body makes it mandatory for projects to generate a Compliantelligent report before applying to them. This can reduce risk not only on the applicant but also the investor or regulating body or other stakeholders making the project and information regarding its standard more transparent.

PROPOSED SOLUTION

Our solution is to scan for all the codebase and solidity files with the help of AI and generate a report detailing which EIPs the codebase follows or does not follow.

TECHNICAL IMPLEMENTATION

The users or projects first upload a zip file containing all the solidity code files. The user then selects which EIP standards it wants to check adherence or compliance to. Currently they can select ERC-20, ERC-721 and ERC-1155. We then use OpenAI’s latest model GPT-4o to scan all the smart contracts present in the project and look for patterns to recognize which EIP standards are being followed. The Compliantelligent AI then generates a report detailing which EIP is being followed and gives a reason too as to why certain EIPs are being followed and why certain EIPs are not being followed.

EXPLANATION OF USE OF BLOCKCHAIN/ML IN THE API(E.G. ALGORITHMS/MODELS)

Detailed Methodology of AI usage/algorithm:

We check whether there are openzeppelin standard libraries being imported
If they are being imported then we check if any standard EIP libraries are being imported or not
If they are being imported, then we check whether the imported EIP contracts are just being inherited or they are being interacted with
If the current smart contract is interacting with the EIP contract such as an ERC20 token, then it means that the smart contract is not conforming to the EIP and the EIP standard Openzeppelin contract is just being used for interaction purposes
But if the smart contract is actually inheriting this standard EIP contract or standard then it means that it is conforming to the standard.
We extend this methodology for rest of the EIPs as well.

PROJECTED ROADMAP OF DEVELOPMENT

The projected roadmap of development is as follows:

Extend support for other EIPs such as: EIP-2981: NFT Royalty Standard EIP-1404: Simple Restricted Token Standard EIP-4626: Tokenized Vault Standard EIP-1462: Base Security Token Standard EIP-3643: LST (Legal Security Token) EIP-2612: Permit Extension for EIP-20 EIP-1967: Standard Proxy Storage Slots

Each of this standard has specific regulatory or platform requirements so scanning for these 7 more EIPs would be the next highest priority task.