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Policy Engine

The Policy Engine is the rules layer for Embedded Wallets. It defines what actions are allowed, under which conditions, and at what time, so security and recovery logic lives in one place instead of being fragmented across UI code, backend services, and smart contracts.

At a high level, the Policy Engine combines two complementary layers:

  • Off-chain decisioning tied to the user’s root account—used for limits, step-up requirements, cooldowns, and auditability.
  • On-chain enforcement hooks that make critical constraints non-bypassable—such as timelocks, approval thresholds, and hard denies.

What the Policy Engine controls​

Policies apply to both day-to-day wallet actions and wallet configuration.

Limits and risk controls​

  • Per-transaction and daily spending limits
  • Chain-, token-, or contract-level allowlists
  • When a passkey is acceptable vs full key derivation

Step-up requirements​

  • When higher-assurance checks (for example, liveness) are enforced
  • Additional verification for sensitive recovery operations

Recovery configuration​

  • Timelocks before recovery can execute
  • Approval thresholds (for example, guardian-based recovery)
  • Cooldowns, cancellation windows, and validity periods

Account-abstraction behavior​

  • When gas sponsorship is permitted
  • Which actions may be batched together
  • Safety guardrails for relaying and transaction simulation

Operational constraints​

  • Audit logging and monitoring hooks
  • Expiration and renewal reminders
  • Safe-by-default behavior (deny unless explicitly allowed)

Core policy primitives​

Policies are composed from a small, explicit set of building blocks:

  • Limits (amounts and time windows)
  • Step-up prompts (liveness)
  • Cooldowns for risky changes
  • Timelocks for delayed recovery
  • Thresholds for multi-party approval
  • Validity and expiration rules
  • Scope restrictions (chains, tokens, contracts)
  • Gas sponsorship rules

This structure keeps policies readable, auditable, and easy to evolve as wallet requirements change.