Delegation · POC 02

Authority Chains with Attenuation

The GENIUS Act requires tracing any stablecoin transaction to an accountable legal party. ACK-ID's delegation chain provides this — but how deep can the chain go before accountability breaks down?

Regulatory Framework

Delegation Under the GENIUS Act

ACK-ID's delegation model ensures that each level in an authority chain narrows (never amplifies) permissions. Every delegation is verifiable by any counterparty without contacting the principal, enabling real-time accountability across distributed agent networks.

Consider this hierarchy:

  • Level 1 (Principal): Acme Corp holds MSB License; authority: transfer, swap, delegate; limit: $1M/day
  • Level 2 (Department Agent): Finance Department; authority: transfer, swap; limit: $50K/day; delegated by Principal
  • Level 3 (Task Agent): Procurement Bot; authority: transfer only; limit: $10K/day; delegated by Finance
  • Level 4 (Sub-Agent): Vendor Payment; authority: transfer USDC only; limit: $5K/transaction; expires in 30 days; delegated by Procurement

At each level, the delegating entity narrows scope: Principal → Department (removes delegate), Department → Task (removes swap), Task → Sub-Agent (restricts asset, reduces limit, adds expiry). Each link is a signed credential specifying who delegated, to whom, what was narrowed, and what constraints apply.

Regulatory Citations: GENIUS Act §4(a) Entity Identification; BSA beneficial ownership requirements; AML/CFT guidance on agent accountability

Interactive Exploration

Delegation Tree Explorer

Explore a multi-level delegation tree. Click any node to see its full credentials and the narrowing constraints applied at each level. Notice how permissions decrease and spending limits reduce at each delegation step — authority always attenuates, never amplifies.

Delegation Tree Explorer

Click any node to view delegation details, permissions, and spend limits

Acme Corp (Treasury)

Decentralized Identifier

did:web:acme-corp.com

Permissions

transferswapstakedelegate

Spending Limit

$1,000,000

Expires

2027-01-01

Credential Type

Principal Authority

Role Description

Principal treasury account with full delegation authority. Can create sub-delegates and constrain permissions as needed.

System Architecture

Delegation Stack Architecture

The L1–L5 architecture maps delegation layers across ACK-ID, ACK-Pay, and x402. The delegation credential lives at L4 (ACK-ID protocol layer), where permission narrowing is policy-enforced. The session key authorization lives at L3 (CDP Smart Wallet), where constraints are code-enforced on-chain. The principal's KYC lives at L5 (identity layer). Hover over compliance blocks to see how each architectural layer satisfies regulatory requirements.

Base L2 — Delegation & Identity DepthSection through ACK + Coinbase stack on BaseA-601 · SECTION CUTCOMPLIANCE DEPTH →L5 · APPLICATION / WALLET UIL4 · PROTOCOL / MIDDLEWAREL3 · SMART CONTRACTL2 · CONSENSUSINHERITED FROM ETHEREUML1 · NETWORKINHERITED FROM ETHEREUM▲ STATE TRANSITION ▲ACK-ID · DID Resolution[POLICY]ACK-Pay · Payment Negotiation[POLICY]x402 · HTTP 402[POLICY]Chainalysis KYT[POLICY]ACK Receipt VC[POLICY]CDP Smart Wallet · ERC-4337[CODE]USDC ERC-20[CODE]SAR Filing · FinCEN[POLICY]ACK PROTOCOL LAYERCOINBASE / BASEPrincipal KYC→ L5 (Wallet UI)Delegation Cred.→ L4 (ACK-ID)Session Key Auth→ L3 (CDP Wallet)Above this line: policy-enforced (can bebypassed). Below: code-enforced (compiledinto chain logic).LegendIdentityReservesTransferTokenGateMonitorObligationPolicy-EnforcedCode-Enforced

Compliance Mapping

How Delegation Satisfies Regulatory Requirement

Regulatory Requirement Authority How ACK Delegation Satisfies It
Entity Identification GENIUS Act §4(a) Each delegation credential names the delegating and receiving entities, with their legal identifiers and jurisdiction. The chain is traversable to the principal.
Beneficial Ownership BSA Beneficial Ownership Rule The principal's KYC (L5) establishes beneficial ownership. All delegated agents are traceable to that principal via the credential chain.
Originator Information FATF R.16 Travel Rule Each delegation credential includes originator metadata (entity name, ID, legal jurisdiction). Cross-border delegations enforce FATF compliance presets.
Accountability & Attenuation AML/CFT Best Practice Permission and spending limit narrowing at each level prevents scope creep and ensures each agent operates within confined authority.