Permissionless token swap via concentrated liquidity AMM. V4 hooks enable optional KYC at pool level.
"The trader's brokerage account — identity verified, funds available, order ready to submit."
User's self-custody wallet on Base. L4 Account (token balance, approval) and L5 Application (wallet UX, swap interface) are lit above the enforcement line. The swap order has been constructed but not yet submitted.
"The exchange's pre-trade price validation — ensuring the order will execute within acceptable slippage."
Price oracle verification at L3 Execution: the swap router checks current pool prices against the user's slippage tolerance. Uniswap v4 hooks may fire additional compliance checks (D16) at this point — MEV protection, front-running detection.
"The exchange matching engine — the trade is executed against available liquidity at the current price."
Uniswap v4 constant-product AMM executes the swap: input tokens are deposited to the pool, output tokens are withdrawn. L3 Execution (AMM logic, v4 hooks) and L4 Account (balance state changes) are lit. The bracket straddles the enforcement line.
"The trader's updated portfolio — swapped tokens received, position updated."
Swapped tokens arrive in the user's wallet. Same silhouette as Step 1 — L4 Account and L5 Application lit. The DeFi path is complete: fully on-chain, fully atomic, no intermediary touched the value. Recordkeeping is the on-chain transaction receipt.
Resolved 4 steps across 1 chain(s). 0 threshold(s) triggered. Frameworks: Common Reporting Standard / FATCA.
Coverage notes: 5 disclosed gap(s).
Side-by-side compliance depth across Base, Arc, Solana, Tempo, Ethereum, TRON, and Pharos — which layers each chain lights up.
| Metric | Arc | Ethereum |
|---|---|---|
| Code-Enforced Ratio | 67% | 40% |
| Deep Blocks (L2-L3 code) | 3 of 6 | 2 of 5 |
| Deepest Layer | L2 | L3 |
| Consensus | Malachite BFT (permissioned validators) | Proof of Stake (open) |
| Finality | ~1s | ~12min |
| Gas Model | USDC (stablecoin-native) | ETH |
| Category | stablechain | general-purpose |
HOW TO READ THESE DIAGRAMS
Compliance Depth
Measures how deeply compliance mechanisms are embedded in the chain's architecture. Higher scores indicate mechanisms woven into core consensus rather than bolted on at the edges.
Layer Stack
Five layers from L1 Network through L5 Application. Compliance enforced at lower layers (L2 Consensus, L3 Execution) is more robust than policy enforced at L4–L5.
Enforcement
Solid borders indicate code-enforced (compiled into chain logic), dashed borders indicate policy-enforced (depends on external actors and can be bypassed).