Protocol Smart Contracts - Frequently Asked Questions

[nksazonov]

Protocol Smart Contracts

The Nitrolite protocol relies on a set of carefully designed smart contracts that implement the ERC7824 standard to provide secure, efficient off-chain payment channels with on-chain settlement capabilities. These infrastructure contracts handle channel creation, state validation, dispute resolution, and asset custody across multiple blockchain networks, forming the foundation of the Yellow Network's decentralized payment channel system.

❓ What contracts support the Nitrolite protocol?

The protocol is supported by two main types of smart contracts:

Custody Contract

• Purpose: Handle channel creation, funding, closure, and asset custody
• Functionality: Manage participants' funds, validate channel states, and execute settlements
• Role: Act as the primary entry point for users to interact with the protocol on-chain

Adjudicator Contracts

• Current Implementation: SimpleConsensus
• Purpose: Validate state transitions and resolve disputes during challenge periods
• Functionality: Ensure that only valid state updates are accepted and handle challenge-response mechanisms
• Evolution: The current SimpleConsensus is a basic implementation that will be replaced with more sophisticated adjudicators as protocol security requirements tighten

The modular design allows adjudicators to be upgraded at the protocol level while maintaining backward compatibility and security
guarantees.

❓ Where can I find contract addresses?

Contract addresses are stored in the nitrolite/contract/deployments directory, organized by chain ID and contract name:

Directory Structure:

./contract/deployments/
├── [CHAIN_ID]/
│   ├── Custody.sol:Custody/
│   │   ├── 2025-05-21T09:53:12.json
│   │   ├── ...
│   │   └── 2025-08-27T12:18:02.json (latest)
│   └── SimpleConsensus.sol:SimpleConsensus/
│       ├── 2025-06-11T12:09:39.json  
│       ├── ...
│       └── 2025-08-27T12:20:00.json (latest)

How to find addresses:

1. Navigate to the chain ID directory (e.g., 137 for Polygon, 11155111 for Sepolia)
2. Choose the contract type (Custody or SimpleConsensus)
3. Select the latest deployment file (files are timestamped - the most recent timestamp is the latest deployment)
4. Open the JSON file to find complete deployment details including:

• deployedTo: The contract address
• deployer: Who deployed the contract
• transactionHash: Deployment transaction
• chainId: Network identifier
• comment: Version/environment info (e.g., "UAT v0.3.0", "SANDBOX v0.3.0")

Example: For Polygon mainnet (chain ID 137), the latest Custody contract might be in:
nitrolite/contract/deployments/137/Custody.sol:Custody/2025-08-27T12:18:02.json

❓ Do I need to change or create my own contracts to build my application?

No, you should not modify or create your own protocol contracts. Here's why:

Infrastructure Contract Nature

• These contracts implement the ERC7824 Nitrolite protocol standard
• They are infrastructure-level contracts, not application-specific contracts
• Your applications interact with these contracts through the Clearnode API and SDK, not directly

Protocol-Level Modifications Only

• Even modular adjudicators are designed to be changed only at the protocol level
• Protocol upgrades are coordinated across the entire Yellow Network
• Individual modifications would break network-wide compatibility

Risks of Custom Modifications

1. Yellow Network Incompatibility: Custom contracts won't be recognized by other Yellow Network participants, limiting interoperability
2. Security Vulnerabilities: The existing contracts have been audited and battle-tested; modifications could introduce critical bugs or attack vectors
3. Feature Degradation: Some Yellow Network features may not work properly with modified contracts, reducing functionality
4. Maintenance Burden: You'd be responsible for security updates, bug fixes, and protocol compatibility - a significant ongoing
   commitment
5. Isolation from Ecosystem: Your application would be isolated from the broader Yellow Network ecosystem and future protocol improvements

Recommended Approach

• Use the existing protocol contracts as-is
• Build your application logic in your own separate smart contracts
• Interact with Nitrolite protocol through Clearnode API and Yellow SDK
• Implement custom business logic in your off-chain application or separate smart contracts

The protocol contracts provide the foundation; your innovation happens at the application layer above them.