PACT: Policy-Aware Contract-Based AI Agent Network over Protected Knowledge Vaults

We present PACT (Policy-Aware Contract-Based AI Agent Network), a novel architecture enabling the creation, deployment, and contractual interaction of AI agents without exposing underlying proprietary knowledge. PACT integrates protected retrieval-augmented generation (RAG) over encrypted knowledge vaults (TorusDB), deterministic policy enforcement via Policy Execution Graphs (PEG), and on-chain contractual execution via the Moduli Chain Network. Unlike traditional AI services that rely on model retraining or unrestricted data sharing, PACT formalizes AI interaction as contractual execution of intelligence, ensuring bounded knowledge usage, cryptographic auditability, and economic accountability. We provide formal security proofs demonstrating knowledge non-extractability, policy soundness, and contract non-repudiation under standard cryptographic assumptions. We further present a reference implementation architecture in Rust with complete state machine specifications and API definitions.