Appendices

This section provides detailed technical specifications and reference materials for developers, researchers, and advanced users.

Appendix A: State Machines & Sequence Diagrams

Detailed state machines and sequence diagrams for on-/off-ramp and dispute flows.

A.1 On-Ramp State Machine

Complete On-Ramp State Machine

States:

INITIAL
  ↓
  [User creates order]
  ↓
OPEN
  ├─> [T_match timeout] ─> EXPIRED
  └─> [Merchant accepts] ─> MATCHED
      ├─> [T_fiat timeout] ─> EXPIRED
      └─> [User transfers fiat] ─> FUNDED
          ├─> [T_confirm timeout] ─> DISPUTED
          └─> [Merchant confirms] ─> CONFIRMED
              ├─> [User disputes] ─> DISPUTED
              │   └─> [Admin resolves] ─> RESOLVED
              └─> [T_dispute passes] ─> SETTLED

Transitions:

From	To	Trigger	Timeout	Effects
INITIAL	OPEN	createOrder()	-	Lock user bond
OPEN	MATCHED	acceptMatch()	T_match	Assign merchant, lock merchant bond
OPEN	EXPIRED	-	T_match	Return bonds
MATCHED	FUNDED	confirmFiat()	T_fiat	Record fiat transfer
MATCHED	EXPIRED	-	T_fiat	Return bonds
FUNDED	CONFIRMED	merchantConfirm()	T_confirm	Prepare USDC release
FUNDED	DISPUTED	-	T_confirm	Enter dispute process
CONFIRMED	SETTLED	-	T_dispute	Release USDC, return bonds, update reputation
CONFIRMED	DISPUTED	raiseDispute()	T_dispute	Freeze settlement
DISPUTED	RESOLVED	adminResolve()	-	Execute verdict, slash or return bonds

A.2 Off-Ramp State Machine

Complete Off-Ramp State Machine

States:

INITIAL
  ↓
  [User creates sell order + locks USDC]
  ↓
OPEN
  ├─> [T_match timeout] ─> EXPIRED (USDC returned)
  └─> [Merchant accepts + posts bond] ─> MATCHED
      ├─> [T_fiat timeout] ─> DISPUTED
      └─> [Merchant sends fiat] ─> FUNDED
          ├─> [Merchant confirms + provides proof] ─> CONFIRMED
          └─> [User disputes non-receipt] ─> DISPUTED
              ├─> [T_dispute passes, no dispute] ─> SETTLED
              └─> [Admin resolves dispute] ─> RESOLVED

Key Differences from On-Ramp:

USDC locked at order creation
Merchant posts bond at match acceptance
Merchant must provide payment proof
User can dispute non-receipt
Default settlement if no dispute within T_dispute

A.3 Dispute Resolution Sequence

Dispute Resolution Sequence Diagram

Appendix B: Proof Interface Specs

Inputs/outputs for identity predicates; verifier APIs; planned evidence module interface.

B.1 ZK-KYC Proof Interface

Identity Proof Specification

Proof Type: Government ID VerificationPrivate Inputs:

interface GovernmentIDPrivateInputs {
  documentType: 'passport' | 'nationalID' | 'driversLicense';
  documentNumber: string;
  fullName: string;
  dateOfBirth: Date;
  nationality: string;
  issuingAuthority: string;
  documentSignature: bytes;
}

Public Inputs:

interface GovernmentIDPublicInputs {
  requiredAge: number;           // e.g., 18
  allowedNationalities: string[];  // e.g., ['*'] or ['US', 'EU']
  sanctionsList: string[];        // OFAC, UN, EU lists
  verifierAddress: address;
  timestamp: number;
}

Proof Output:

interface GovernmentIDProof {
  proofType: 'zkSNARK';
  proofData: bytes;               // ZK proof
  publicSignals: {
    isOver18: boolean;
    isNotSanctioned: boolean;
    nationalityAllowed: boolean;
    documentValid: boolean;
  };
  commitmentHash: bytes32;        // On-chain commitment
  expiresAt: number;              // Proof validity period
}

Verification:

function verifyGovernmentID(
    GovernmentIDProof calldata proof
) external view returns (bool) {
    require(proof.expiresAt > block.timestamp, "Proof expired");
    
    // Verify zk-SNARK
    bool proofValid = zkVerifier.verify(
        proof.proofData,
        proof.publicSignals
    );
    
    require(proofValid, "Invalid proof");
    
    // Check all predicates passed
    require(
        proof.publicSignals.isOver18 &&
        proof.publicSignals.isNotSanctioned &&
        proof.publicSignals.nationalityAllowed &&
        proof.publicSignals.documentValid,
        "KYC requirements not met"
    );
    
    return true;
}

Social Proof Specification

Proof Type: Social Account Verification via Reclaim ProtocolSupported Platforms:

GitHub (developer reputation)
LinkedIn (professional verification)
Twitter (social presence)
Others as added by Reclaim

Private Inputs:

OAuth tokens or session cookies (never exposed)
Account credentials (never exposed)
Full profile data (selectively revealed)

Public Inputs:

interface SocialProofPublicInputs {
  platform: 'github' | 'linkedin' | 'twitter' | string;
  minimumAccountAge: number;      // Days
  minimumFollowers?: number;      // Platform-specific
  verifiedAccount: boolean;       // Platform verification status
  reclaimAppId: string;
}

Proof Output:

interface ReclaimSocialProof {
  proofType: 'zkTLS';
  reclaimProof: bytes;            // Reclaim-generated proof
  publicSignals: {
    accountAgeValid: boolean;
    meetsThresholds: boolean;
    accountVerified: boolean;
    accountActive: boolean;
  };
  commitmentHash: bytes32;
  expiresAt: number;
}

Integration:

// User-side: Generate proof
const proof = await reclaimProtocol.generateProof({
  platform: 'github',
  requirements: {
    minimumAccountAge: 365,  // 1 year
    minimumFollowers: 50
  }
});

// Submit to P2P Protocol
await p2pProtocol.submitSocialProof(proof);

B.3 Bank Transaction Proof (Planned)

Bank Transaction Evidence Specification (Roadmap)

Proof Type: Payment ConfirmationPrivate Inputs:

interface BankTransactionPrivateInputs {
  bankName: string;
  accountNumber: string;
  transactionId: string;
  amount: number;
  currency: string;
  timestamp: Date;
  recipientAccount: string;
  senderAccount: string;
  tlsSessionProof: bytes;         // zkTLS proof
}

Public Inputs:

interface BankTransactionPublicInputs {
  expectedAmount: number;
  expectedCurrency: string;
  timeWindowStart: number;
  timeWindowEnd: number;
  recipientCommitment: bytes32;   // Hash of recipient
  orderId: bytes32;
}

Proof Output:

interface BankTransactionProof {
  proofType: 'zkTLS';
  proofData: bytes;
  publicSignals: {
    amountMatches: boolean;
    currencyMatches: boolean;
    withinTimeWindow: boolean;
    recipientMatches: boolean;
  };
  commitmentHash: bytes32;
  expiresAt: number;
}

Verification Flow:

Merchant claims fiat payment sent/received
Merchant generates zkTLS proof from banking portal
Proof submitted to on-chain verifier or off-chain relayer
Verifier checks proof cryptographically
Attestation hash posted on-chain
Order settlement proceeds automatically

Privacy Properties:

Bank name not revealed
Account numbers not revealed
Other transactions not revealed
Only proof of specific transaction posted

Appendix C: Oracle Adapter Spec

Sources, aggregation, parameters.

C.1 Oracle Architecture

Oracle System Design

Components:

interface OracleAdapter {
  // Data sources
  sources: PriceSource[];
  
  // Aggregation method
  aggregator: MedianAggregator | TWAPAggregator;
  
  // Circuit breakers
  circuitBreaker: CircuitBreaker;
  
  // Methods
  getPrice(pair: string): Promise<Price>;
  addSource(source: PriceSource): void;
  removeSource(sourceId: string): void;
}

interface PriceSource {
  id: string;
  name: string;
  type: 'CEX' | 'DEX' | 'P2P' | 'ORACLE';
  weight: number;
  endpoint: string;
  fetchPrice(pair: string): Promise<PriceData>;
}

interface PriceData {
  price: number;
  timestamp: number;
  source: string;
  volume?: number;
}

Current Sources (Example for USDC/USD):

[
  {
    "id": "binance",
    "name": "Binance",
    "type": "CEX",
    "weight": 1.5,
    "endpoint": "https://api.binance.com/api/v3/ticker/price"
  },
  {
    "id": "coinbase",
    "name": "Coinbase",
    "type": "CEX",
    "weight": 1.5,
    "endpoint": "https://api.coinbase.com/v2/prices/USDC-USD/spot"
  },
  {
    "id": "kraken",
    "name": "Kraken",
    "type": "CEX",
    "weight": 1.0,
    "endpoint": "https://api.kraken.com/0/public/Ticker"
  },
  {
    "id": "uniswap_v3",
    "name": "Uniswap V3",
    "type": "DEX",
    "weight": 1.0,
    "endpoint": "on-chain"
  },
  {
    "id": "chainlink",
    "name": "Chainlink",
    "type": "ORACLE",
    "weight": 2.0,
    "endpoint": "on-chain"
  }
]

C.2 Price Aggregation Algorithm

Median + TWAP Calculation

Median Calculation:

function calculateMedian(prices: PriceData[]): number {
  // Filter stale prices (>60s old)
  const fresh = prices.filter(
    p => Date.now() - p.timestamp < 60000
  );
  
  // Require minimum 3 sources
  if (fresh.length < 3) {
    throw new Error('Insufficient price sources');
  }
  
  // Sort by price
  fresh.sort((a, b) => a.price - b.price);
  
  // Remove outliers (>5% from median estimate)
  const estimate = fresh[Math.floor(fresh.length / 2)].price;
  const filtered = fresh.filter(
    p => Math.abs(p.price - estimate) / estimate < 0.05
  );
  
  // Calculate median
  const mid = Math.floor(filtered.length / 2);
  if (filtered.length % 2 === 0) {
    return (filtered[mid - 1].price + filtered[mid].price) / 2;
  } else {
    return filtered[mid].price;
  }
}

TWAP Calculation:

function calculateTWAP(
  historicalPrices: PriceData[],
  windowSeconds: number = 300  // 5 minutes
): number {
  const now = Date.now();
  const windowStart = now - (windowSeconds * 1000);
  
  // Filter to window
  const windowPrices = historicalPrices.filter(
    p => p.timestamp >= windowStart && p.timestamp <= now
  );
  
  // Calculate time-weighted average
  let totalWeightedPrice = 0;
  let totalWeight = 0;
  
  for (let i = 0; i < windowPrices.length - 1; i++) {
    const duration = windowPrices[i + 1].timestamp - windowPrices[i].timestamp;
    const price = windowPrices[i].price;
    
    totalWeightedPrice += price * duration;
    totalWeight += duration;
  }
  
  return totalWeightedPrice / totalWeight;
}

Combined Approach:

function getPrice(pair: string): Price {
  // Get current median
  const currentMedian = calculateMedian(fetchAllSources(pair));
  
  // Get TWAP for stability
  const twap = calculateTWAP(historicalPrices.get(pair));
  
  // Check deviation
  const deviation = Math.abs(currentMedian - twap) / twap;
  
  if (deviation > 0.05) {  // 5% circuit breaker
    circuitBreaker.trigger('Excessive price deviation');
    throw new Error('Circuit breaker activated');
  }
  
  // Use current median if deviation acceptable
  return {
    price: currentMedian,
    twap: twap,
    deviation: deviation,
    timestamp: Date.now(),
    expiresAt: Date.now() + 60000  // 60-second expiry
  };
}

Appendix D: Reputation Math

Scoring formulae, decay, thresholds, and examples.

D.1 Reputation Formula

Complete Reputation Calculation

Base Formula:

RP_total = RP_trades + RP_kyc + RP_network + RP_time - RP_penalties

Trade Reputation:

RP_trades = Σ(i=1 to N) [
  trade_value_i * 
  rail_diversity_multiplier *
  (1 - decay_factor) * 
  completion_bonus
]

Where:
- trade_value_i = normalized trade size (0.1 to 10 RP per trade)
- rail_diversity_multiplier = 1.0 + (0.1 * num_different_rails)
- decay_factor = e^(-λ * time_since_trade)
- completion_bonus = 1.2 if no disputes, 1.0 otherwise

KYC Reputation:

RP_kyc = Σ(verification_type) points_per_type

Points:
- Social account (Reclaim): 50 RP each, max 3 platforms
- Government ID: 100 RP
- Passport: 150 RP
- Enhanced due diligence: 200 RP
- Multi-factor verification bonus: +50 RP

Network Reputation:

RP_network = Σ(referrals) [referree_RP * 0.1] + geography_bonus

Where:
- Referral RP = 10% of referred user's RP (up to 50 RP each)
- Geography bonus = 30 RP per unique country (up to 10 countries)

Time Decay:

decay_factor = e^(-λ * t)

Where:
- λ = 0.0001 (decay constant, governance parameter)
- t = days since last activity
- Decay reduces score by ~5% per 50 days of inactivity

Penalties:

RP_penalties = Σ(disputes_lost) penalty_by_severity +
               Σ(timeouts) timeout_penalty +
               Σ(false_disputes) false_dispute_penalty

Penalties:
- Lost dispute (minor): -50 RP
- Lost dispute (major): -200 RP
- Fraudulent behavior: -1000 RP + ban
- Timeout violation: -20 RP
- False dispute: -50 RP

D.2 Tier Thresholds

Reputation Tier System

Tier Definitions:

Tier	RP Range	Max Transaction	Daily Limit	Fee Discount
New User	0-100	$100	$500	0%
Standard	100-500	$500	$2,000	0%
Verified	500-1000	$2,000	$10,000	10%
Trusted	1000-3000	$5,000	$50,000	20%
Elite	3000-10000	$20,000	$200,000	30%
Merchant	10000+	$50,000+	$1,000,000+	30%

Tier Progression Example:

function getUserTier(reputationPoints: number): Tier {
  if (reputationPoints < 100) return 'NEW_USER';
  if (reputationPoints < 500) return 'STANDARD';
  if (reputationPoints < 1000) return 'VERIFIED';
  if (reputationPoints < 3000) return 'TRUSTED';
  if (reputationPoints < 10000) return 'ELITE';
  return 'MERCHANT';
}

Appendix E: Governance Parameters Registry

With safe ranges and change procedures.

E.1 Complete Parameter List

All Governed Parameters

Economic Parameters:

{
  "fees": {
    "base_fee_bps": { "current": 50, "min": 10, "max": 200 },
    "treasury_share": { "current": 0.40, "min": 0.20, "max": 0.60 },
    "merchant_share": { "current": 0.55, "min": 0.30, "max": 0.70 },
    "protocol_share": { "current": 0.05, "min": 0.05, "max": 0.20 }
  },
  "limits": {
    "tier_1_max": { "current": 500, "min": 100, "max": 1000 },
    "tier_2_max": { "current": 5000, "min": 1000, "max": 10000 },
    "tier_3_max": { "current": 50000, "min": 10000, "max": 100000 }
  },
  "bonds": {
    "user_bond_multiplier": { "current": 0.02, "min": 0.01, "max": 0.10 },
    "merchant_bond_multiplier": { "current": 0.05, "min": 0.02, "max": 0.20 },
    "merchant_minimum_bond": { "current": 10000, "min": 5000, "max": 50000 }
  }
}

Time Parameters:

{
  "timeouts": {
    "T_match_seconds": { "current": 300, "min": 60, "max": 600 },
    "T_fiat_seconds_UPI": { "current": 600, "min": 300, "max": 1800 },
    "T_confirm_seconds": { "current": 300, "min": 120, "max": 900 },
    "T_dispute_seconds": { "current": 3600, "min": 1800, "max": 86400 }
  },
  "quote_expiry": { "current": 60, "min": 30, "max": 300 }
}

Oracle Parameters:

{
  "oracle": {
    "max_staleness_seconds": { "current": 60, "min": 30, "max": 180 },
    "deviation_threshold": { "current": 0.05, "min": 0.02, "max": 0.10 },
    "minimum_sources": { "current": 3, "min": 2, "max": 5 },
    "twap_window_seconds": { "current": 300, "min": 60, "max": 900 }
  }
}

Appendix F: Glossary

Protocol terms and rail classes.

Terms and Definitions

Admin Settlement: Current dispute resolution method where authorized admins issue verdicts based on evidence
AML (Anti-Money Laundering): Regulations and practices designed to prevent money laundering

Base L2: Ethereum Layer 2 scaling solution where P2P Protocol is currently deployed
Bond: Collateral posted by users or merchants, slashed for fraudulent behavior

Circuit Breaker: Automatic trading pause triggered by abnormal conditions
Credibility: Reputation earned through honest protocol participation

Dispute Window: Time period during which parties can contest order outcomes

Futarchy: Governance mechanism using prediction markets for decision-making

KYC (Know Your Customer): Identity verification processes

Merchant: Vetted liquidity provider who mediates fiat-crypto exchanges

Off-Ramp: Converting crypto to fiat
On-Ramp: Converting fiat to crypto
Oracle: System providing external data (prices) to smart contracts

PIX: Brazil’s instant payment system
Proof-of-Credibility (PoC): P2P Protocol’s reputation system

Rail: Payment method or system (UPI, PIX, SEPA, etc.)
Reputation Points (RP): Numerical score representing user credibility

Slashing: Penalty imposed by taking a portion of posted bonds
Settlement: Final completion of a trade with fund transfers

TGE (Token Generation Event): Token launch, planned March 2026
TWAP (Time-Weighted Average Price): Price averaging method resistant to manipulation

UPI (Unified Payments Interface): India’s instant payment system

Zero-Knowledge Proof (ZK Proof): Cryptographic method to prove statements without revealing underlying data
ZK-KYC: Identity verification using zero-knowledge proofs
zkTLS: Zero-knowledge proofs for TLS session data, used by Reclaim Protocol

Document Metadata

Version: 1.0
Date: March 5, 2026
Status: Pre-TGE Release
Next Review: June 2026 Contributing Authors:

P2P Protocol Core Team
Community Contributors
Technical Advisors

Review and Approval:

Technical Review: Completed
Security Review: Completed
Legal Review: Completed
Community Review: Open

License: This whitepaper is released under Creative Commons Attribution 4.0 International (CC BY 4.0). You are free to share and adapt the material with appropriate attribution.

End of WhitepaperThank you for reading the P2P Protocol whitepaper. For questions, feedback, or to get involved:

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Start using the protocol: p2p.me

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Whitepaper

Appendix A: State Machines & Sequence Diagrams

A.1 On-Ramp State Machine

A.2 Off-Ramp State Machine

A.3 Dispute Resolution Sequence

Appendix B: Proof Interface Specs

B.1 ZK-KYC Proof Interface

B.3 Bank Transaction Proof (Planned)

Appendix C: Oracle Adapter Spec

C.1 Oracle Architecture

C.2 Price Aggregation Algorithm

Appendix D: Reputation Math

D.1 Reputation Formula

D.2 Tier Thresholds

Appendix E: Governance Parameters Registry

E.1 Complete Parameter List

Appendix F: Glossary

Document Metadata

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Whitepaper

​Appendix A: State Machines & Sequence Diagrams

​A.1 On-Ramp State Machine

​A.2 Off-Ramp State Machine

​A.3 Dispute Resolution Sequence

​Appendix B: Proof Interface Specs

​B.1 ZK-KYC Proof Interface

​B.2 Social Account Verification (Reclaim Protocol)

​B.3 Bank Transaction Proof (Planned)

​Appendix C: Oracle Adapter Spec

​C.1 Oracle Architecture

​C.2 Price Aggregation Algorithm

​Appendix D: Reputation Math

​D.1 Reputation Formula

​D.2 Tier Thresholds

​Appendix E: Governance Parameters Registry

​E.1 Complete Parameter List

​Appendix F: Glossary

​Document Metadata

Build docs developers (and LLMs) love

Appendix A: State Machines & Sequence Diagrams

A.1 On-Ramp State Machine

A.2 Off-Ramp State Machine

A.3 Dispute Resolution Sequence

Appendix B: Proof Interface Specs

B.1 ZK-KYC Proof Interface

B.2 Social Account Verification (Reclaim Protocol)

B.3 Bank Transaction Proof (Planned)

Appendix C: Oracle Adapter Spec

C.1 Oracle Architecture

C.2 Price Aggregation Algorithm

Appendix D: Reputation Math

D.1 Reputation Formula

D.2 Tier Thresholds

Appendix E: Governance Parameters Registry

E.1 Complete Parameter List

Appendix F: Glossary

Document Metadata