Echo Protocol
A Policy-Driven Authorization Layer for Autonomous AI Agents
Introduction
As autonomous AI agents increasingly interact with digital services, a new class of economic activity is emerging: machine-initiated payments. These agents browse APIs, purchase data, execute transactions, and consume services without continuous human intervention.
However, existing payment systems are fundamentally designed for humans. They assume either:
- Direct private key custody by the spender, or
- Continuous, synchronous human approval for each transaction.
Neither model is compatible with scalable, safe, and enterprise-grade AI autonomy.
Echo introduces a new primitive: a policy-driven authorization layer that allows users to delegate limited, verifiable spending authority to AI agents—without exposing private keys, without custody risk, and without relinquishing control.
Background & Problem Statement
2.1 The Trust Gap in Autonomous Payments
AI agents today can reason, plan, and generate transaction intents, but they cannot be safely entrusted with funds. Key challenges include:
Unbounded risk
A compromised or misaligned agent can drain funds instantly.
Lack of policy enforcement
Existing wallets lack native support for granular, programmable constraints.
Poor auditability
Off-chain approvals and API keys offer limited verifiability.
Enterprise barriers
Compliance requires explicit limits, logs, and accountability.
This creates a trust gap between agent intent and on-chain execution.
2.2 Why Existing Approaches Fail
A new abstraction is required.
Design Goals & Principles
Echo is designed around the following principles:
Separation of concerns
AI agents decide what they want to do. Echo decides whether they are allowed to do it.
Explicit, user-defined constraints
All authority is derived from cryptographically signed policies.
No private key exposure
Agents never control funds or signing keys.
On-chain verifiability
Authorization decisions must be independently verifiable.
Protocol neutrality
Echo does not process payments or custody assets.
System Architecture
Echo is a modular authorization system designed to evaluate and attest whether an AI agent's transaction intent complies with user-defined constraints, prior to on-chain execution. The system is composed of four primary components, each with a clearly defined responsibility and trust boundary.
4.1 Components
4.1.1 Agent
Intent GeneratorAn agent is any autonomous or semi-autonomous software entity capable of generating transaction intents.
- Do not hold user private keys
- Do not directly submit on-chain transactions
- Interact with Echo only by submitting intent proposals
4.1.2 Policy Store
Constraint RepositoryThe Policy Store holds user-defined authorization policies signed via EIP-712.
- Off-chain by default
- Versioned and revocable
- Referenced by hash during authorization
Does not perform execution or validation logic.
4.1.3 Authorization Network
Evaluation LayerIndependent nodes responsible for evaluating agent intents against active policies. Each node:
- Executes deterministic authorization logic
- Produces an authorization result
- Generates cryptographic artifacts for verification
Nodes do not submit transactions and cannot access user funds.
4.1.4 On-chain Verifier
Smart Contract ModuleA smart contract module integrated into ERC-4337 account validation. Its sole responsibility is to:
- Verify cryptographic proofs from Authorization Network
- Accept or reject a UserOperation accordingly
Does not interpret policies or agent identity directly.
4.2 Interaction Flow
An agent submits an intent proposal to Echo.
Echo resolves the relevant policy set from the Policy Store.
Authorization nodes evaluate the intent against the policy set.
A cryptographic proof of compliance is generated.
The proof is supplied during ERC-4337 UserOperation validation.
Execution proceeds only if verification succeeds.
4.3 Trust Boundaries
User private keys remain exclusively under user control.
Authorization nodes are not trusted with custody or execution.
On-chain contracts verify proofs but do not perform off-chain computation.
Agents are assumed to be untrusted by default.
4.4 Design Constraints
The architecture enforces the following constraints:
Echo consists of four orthogonal layers:
1Policy Definition Layer
Users define constraints using structured, machine-verifiable policies signed via EIP-712.
{
"agentId": "erc8004:agent:0xabc...",
"constraints": {
"maxPerTx": "100 USDC",
"spendingCap": {
"period": "daily",
"amount": "500 USDC"
},
"recipientWhitelist": [
"merchant:stripe_api",
"contract:0xdef..."
],
"timeWindow": {
"start": 1700000000,
"end": 1700086400
}
},
"revocationNonce": 3
}Via revocationNonce for policy updates
Flexible constraint combinations
Off-chain readable, on-chain enforceable
Policies are stored off-chain (IPFS / DA layer) with content hashes referenced on-chain.
2Intent & Authorization NetworkTEE + ZK
When an AI agent produces an intent (e.g., "Pay 42 USDC to API X"), it is not executed directly. Instead:
Intent + Policy are submitted to a decentralized authorization network
Each node runs inside a Trusted Execution Environment (TEE)
The node parses policy, evaluates constraints, checks historical spend (Merkle accumulator)
If valid, generates a zero-knowledge proof attesting compliance
ZK Proof Attestation
"This intent complies with policy P under state S."
PROOF TYPE
zk-SNARK (Groth16 / Plonk-compatible)
TARGET LATENCY
<100ms per authorization check
PUBLIC INPUTS
PRIVATE INPUTS
3Execution LayerERC-4337
Echo integrates with ERC-4337 EntryPoint as a policy-aware gate.
User Control
Users retain full control of their ERC-4337 account at all times.
Echo Supplies
- Authorization proof
- Policy compliance attestation
EntryPoint executes only if proof verifies. This preserves:
Wallet Compatibility
Works with existing wallets
Account Abstraction
Full AA benefits retained
On-chain Auditability
Complete transaction history
4Interoperability Layer
Echo is execution-agnostic and integrates with multiple protocols:
Payment protocol
Agent identity & reputation
Fiat settlement (e.g., AsterPay)
Echo answers:
"Should this happen?"
Others answer:
"How does it happen?"
Authorization & Policy Model
5.1 Policy Definition
Users define policies that specify bounded authority for AI agents. Policies may include:
Policies are cryptographically signed by the user and registered as authorization constraints.
5.2 Policy Evaluation Flow
An AI agent generates a payment intent.
The intent is submitted to Echo.
Echo evaluates the intent against the active policy set.
If compliant, Echo authorizes execution.
If violated, the transaction is rejected before execution.
At no point does the agent gain unilateral signing authority.
5.3 Spending Caps Without Custody
Cumulative limits (daily/weekly) are enforced via on-chain state tracking within the account abstraction logic:
- Each authorized execution updates spending counters.
- Subsequent intents are evaluated against remaining allowance.
- Exceeding limits results in deterministic rejection.
This avoids reliance on off-chain accounting while preserving verifiability.
Market Positioning & Differentiation
6.1 Problem Space Overview
AI agent payments introduce a new execution paradigm: decisions are generated by machines, but authority must remain with humans.
This breaks assumptions embedded in most existing wallet and payment systems, which were designed around:
As a result, the agent payment stack naturally decomposes into distinct layers, each solving a different trust problem:
Is the target x402 endpoint reachable, responsive, and behaving honestly?
Does this transaction exhibit abnormal or potentially fraudulent patterns?
Does this transaction comply with constraints explicitly pre-approved by the user?
Most existing systems focus on risk mitigation or operational reliability. Wallet infrastructure focuses on key custody and execution plumbing.
Echo is designed specifically for the authorization layer, where AI-generated intents must be deterministically checked against user-signed policy before execution occurs.
6.2 Architectural & Capability Comparison
The table below compares Echo with adjacent systems frequently discussed in agent payment conversations. While all are valuable, they operate at different abstraction layers and make different trust assumptions.
| Dimension | Echo | Safe (Gnosis) | x402-Secure | Zauth |
|---|---|---|---|---|
| Core Purpose | Policy-bound authorization for AI-generated intents | Secure smart contract wallet for humans & organizations | Risk signals & fraud detection for agent payments | Endpoint reliability & validation for x402 |
| Designed For AI Agents | Yes — agent-native | No — human / org-first | Partial | No |
| Primary Question | Is this agent allowed to execute this action? | Who can sign and execute transactions? | Is this transaction risky? | Is this endpoint reliable? |
| Layer in Stack | Authorization layer | Wallet / execution layer | Risk layer | Endpoint layer |
| Execution Control | Hard pre-execution gating | Role-based signing & modules | Soft gating via risk context | None |
| Policy Model | User-signed, machine-evaluable policies | Human-defined roles & multisig rules | Heuristic / probabilistic | Reputation & testing data |
| Agent Autonomy | High — bounded autonomy by policy | Low — requires human or predefined signer logic | Medium | None |
| Formal Verifiability | Yes — ZK proofs + on-chain enforcement | Partial — on-chain rules, not intent-aware | No | No |
| Handling AI Intents | Native — intent → policy → execution | Indirect — requires heavy custom modules | Indirect | Not applicable |
| Integration Weight | Lightweight, upstream of wallets | Heavy wallet integration | SDK / proxy based | Monitoring APIs |
| Typical Users | Agent frameworks, AI infra, payment rails | DAOs, teams, enterprises | Agent devs, facilitators | x402 providers, QA teams |
| Key Limitation | Focused only on authorization (by design) | Not built for AI intent semantics | No enforcement power | No governance or policy logic |
6.3 Why Safe ≠ Echo (and Why This Matters)
Safe is often the first comparison — and for good reason. It is the most mature ERC-4337–compatible smart account system in production today.
However, Safe is a wallet. Echo is not.
Safe answers:
"Who is allowed to sign?"
Safe assumes:
- Human-initiated actions
- Explicit execution intent
- Heavy integration at the wallet layer
Echo answers:
"Under what conditions may an AI act?"
Echo assumes:
- Machine-generated intents
- Pre-approved constraints
- Zero private key exposure to agents
- Minimal coupling to wallets or payment rails
In practice, Echo can sit upstream of Safe, ERC-4337 EntryPoints, or any execution environment — acting as a verifiable authorization gate, not a wallet replacement.
6.4 Key Takeaways
Safe secures execution; Echo governs permission
x402-Secure informs risk; Echo enforces rules
Zauth improves reliability; Echo ensures legitimacy
Echo fills a missing and non-overlapping layer in the agent payment stack
Echo turns untrusted AI-generated intents into verifiably authorized on-chain executions.
This layer is not optional for autonomous agents — it is foundational.
Security & Trust Assumptions
Echo explicitly minimizes trust assumptions:
Users trust only their own signatures.
Agents are assumed to be fallible or adversarial.
Echo nodes do not custody funds.
Execution validity is enforced by smart contracts.
Optionally, verifiable execution environments (e.g., TEE-backed nodes) may be used to strengthen intent integrity, but they are not required for correctness.
Economic Considerations
Non-Tokenized Phase
Echo is designed to function without a native token in its initial phase.
Current economic properties:
- Authorization is enforced via cryptographic policies, not financial incentives.
- Security relies on deterministic smart contract execution.
- Users retain full fund custody at all times.
This design choice prioritizes simplicity, auditability, and early adoption.
Future Decentralization
As Echo evolves toward a permissionless authorization network, additional mechanisms may be introduced:
Any future token, if introduced, would serve economic security and decentralization, not speculative utility.
Use Cases
Autonomous API consumption
AI agents accessing paid APIs and services
Agent-based SaaS subscriptions
Automated subscription management
Enterprise AI procurement
Controlled purchasing workflows
Cross-border agent payments
With fiat settlement via x402
Roadmap
Policy engine & ERC-4337 integration
Production integrations with payment middleware
Enterprise pilots
Progressive decentralization
Risks & Limitations
These risks are mitigated through conservative defaults and progressive rollout.
Conclusion
Echo enables a future where AI agents can transact autonomously—but never recklessly.
By separating intent from authority, and embedding policy as a first-class primitive, Echo lays the foundation for safe, compliant, and scalable machine-driven economies.