How does Steel work?

alloy::sol!(
    interface IERC20 {
        function balanceOf(address account) external view returns (uint);
}
);

// GUEST PROGRAM
// Read the input from the guest environment.
let input: EthEvmInput = env::read();
let contract: Address = env::read();
let account: Address = env::read();

let evm_env = input.into_env(&ETH_SEPOLIA_CHAIN_SPEC);

// Execute the view call; it returns the result in the type generated by the `sol!` macro.
let call = IERC20::balanceOfCall { account };
let balance = Contract::new(contract, &evm_env)
  .call_builder(&call)
  .call();

// Check that the given account holds at least 1 token.
assert!(balance >= U256::from(1));

// Commit the block hash and number used when deriving `view_call_env` to the journal.
let journal = Journal {
    commitment: evm_env.into_commitment(),
    tokenAddress: contract,
};
env::commit_slice(&journal.abi_encode());

// HOST PROGRAM
// Create an alloy provider from RPC URL
let provider = ProviderBuilder::new()
    .connect_http(eth_rpc_url);

// Create an EVM environment from that provider defaulting to the latest block.
let mut env = EthEvmEnv::builder()
    .chain_spec(&ETH_SEPOLIA_CHAIN_SPEC)
    .provider(provider.clone())
    .build()
    .await?;

// Preflight the call to prepare the input that is required to execute the function in the guest without RPC access.
let mut contract = Contract::preflight(token_contract, &mut env);

let evm_input = env.into_input().await?;

contract {
    function doSomething(journalData, proof) {
        validate journal data
        validate Steel commitment

        verify proof
        doSomethingElse()
    }
}

contract Counter {

  function increment(bytes calldata journalData, bytes calldata seal) external {
      // Decode and validate the journal data
      Journal memory journal = abi.decode(journalData, (Journal));
      require(journal.tokenContract == tokenContract, "Invalid token address");
      require(Steel.validateCommitment(journal.commitment), "Invalid commitment");

      // Verify the proof
      bytes32 journalHash = sha256(journalData);
      verifier.verify(seal, imageID, journalHash);

      // If the balance is at least one, update the counter
      counter += 1;
  }
}