> ## Documentation Index
> Fetch the complete documentation index at: https://policykit.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# PolicyEngine

> Core contract for policy storage and evaluation

# PolicyEngine

The `PolicyEngine` is the central contract that stores policy configurations and coordinates rule evaluation. It serves as the registry for all account policies and the dispatcher for rule evaluation.

## Overview

```solidity theme={null}
contract PolicyEngine {
    // Policy set storage per account
    mapping(address => PolicySet) public policySets;

    // Register or update a policy set
    function setPolicySet(
        bytes32 policyCID,
        address pkpAddress,
        bytes calldata encodedRules,
        uint8 failMode,
        bool requiresAttestation
    ) external;

    // Remove a policy set
    function removePolicySet() external;

    // Evaluate a transaction against the caller's policy
    function evaluate(
        address target,
        uint256 value,
        bytes calldata data,
        bytes calldata attestation
    ) external returns (bool);
}
```

## Policy Set Structure

```solidity theme={null}
struct PolicySet {
    bytes32 policyCID;          // IPFS CID of the full policy
    address pkpAddress;         // PKP address for attestation verification
    bytes encodedRules;         // Compact binary-encoded on-chain rules
    FailMode failMode;          // CLOSED or OPEN
    bool requiresAttestation;   // Whether Tier 3 attestation is required
    bool active;                // Whether the policy is active
}
```

## Functions

### `setPolicySet`

Register or update the caller's policy set.

```solidity theme={null}
function setPolicySet(
    bytes32 policyCID,
    address pkpAddress,
    bytes calldata encodedRules,
    uint8 failMode,
    bool requiresAttestation
) external;
```

| Parameter             | Type      | Description                             |
| --------------------- | --------- | --------------------------------------- |
| `policyCID`           | `bytes32` | IPFS CID (truncated to 32 bytes)        |
| `pkpAddress`          | `address` | Lit Protocol PKP address                |
| `encodedRules`        | `bytes`   | Binary-encoded on-chain rules           |
| `failMode`            | `uint8`   | 0 = CLOSED, 1 = OPEN                    |
| `requiresAttestation` | `bool`    | Whether off-chain attestation is needed |

### `removePolicySet`

Remove the caller's policy set and stop enforcement.

```solidity theme={null}
function removePolicySet() external;
```

### `evaluate`

Evaluate a transaction against the caller's registered policy. Called by `PolicyGuard` or `PolicyKit7579Module`.

```solidity theme={null}
function evaluate(
    address target,
    uint256 value,
    bytes calldata data,
    bytes calldata attestation
) external returns (bool allowed);
```

| Parameter     | Type      | Description                                     |
| ------------- | --------- | ----------------------------------------------- |
| `target`      | `address` | Transaction destination                         |
| `value`       | `uint256` | ETH value in wei                                |
| `data`        | `bytes`   | Transaction calldata                            |
| `attestation` | `bytes`   | EIP-712 signed attestation (empty if no Tier 3) |

**Returns:** `bool` — Whether the transaction is allowed.

### `getPolicySet`

Read the policy set for an account.

```solidity theme={null}
function getPolicySet(address account) external view returns (PolicySet memory);
```

## Events

```solidity theme={null}
event PolicySetUpdated(address indexed account, bytes32 policyCID);
event PolicySetRemoved(address indexed account);
event TransactionEvaluated(
    address indexed account,
    address indexed target,
    bool allowed
);
```

## Encoding Format

On-chain rules are encoded using the `PolicyCodec` library into a compact binary format:

```
[ruleCount: uint8]
[rule1Type: uint8][rule1DataLength: uint16][rule1Data: bytes]
[rule2Type: uint8][rule2DataLength: uint16][rule2Data: bytes]
...
```

The SDK's `PolicyEncoder` handles encoding and decoding automatically.