Last updated 3 weeks ago
Audit & open-source our Price Discovery / Liquidity Bootstrapping smart contracts to allow DAOs to have fair token launches.
We have been working on LBE / Price Discovery Event contracts for the past 5 months. They are complete, robust, and battle tested. The last step before we open source them is to receive an audit.
This is the total amount allocated to Audit for Open-source LBE for DAOs. 3 out of 4 milestones are completed.
1/4
Formal Specification of the Protocol
Cost: âł 25,000
Delivery: Month 2 - Dec 2023
2/4
Begin the audit
Cost: âł 40,650
Delivery: Month 4 - Feb 2024
3/4
Initial Audit Report
Cost: âł 40,650
Delivery: Month 6 - Apr 2024
4/4
Revisions and Final Report
Cost: âł 29,200
Delivery: Month 8 - Jun 2024
Ruslan Makhlouf
Sam Delaney
Jonathan Rodriguez
Philip DiSarro
Mladen Lm
No dependencies
Project will be fully open source.
Many projects on Cardano launch with a token. Recently, there have been a large amount of controversy regarding a few of the popular initial distribution mechanisms for such tokens. One such approach is to release the token on a DEX. Bots are able to poll the DEX contract addresses and make purchase orders before the token even appears to retail users on the UI. This allows those bots to purchase a large amount of the asset before the general public, and then dump it on retail users after the purchasing pressure causes the price to rise, thus making huge profits. Another popular approach is to conduct a direct token sale at a fixed price per asset. Typically, this is done in a centralized manner, once the project team receives a payment they send back the owed amount of tokens (vending machine architecture). Even if it is done in a decentralized manner, this system still does not address the unfair advantage sniping scripts have over the average user. The community has criticized individuals for using automated tooling to front-run retail users and dump on them; however, if there is an opportunity to profit from doing something then someone will do it irrespective of morality or public perception. This situation is actually a perfect illustration of why Blockchain technology is so revolutionary. Google's signature catch-phrase "Don't be evil" hints at problems inherent in how we conduct commercial interactions, and why blockchain-inspired change is needed. On Cardano, we can leverage the core protocol to create an ecosystem where the "don't be evil" model of commerce is replaced with a "can't be evil" model. With that in mind we created Discovery, a trustless fair price discovery launchpad.
Discovery is a set of open-source smart contracts and associated offchain code designed to facilitate fair and decentralized token launches via on-chain Price Discovery Event. This code-base is already complete and has been thoroughly unit and battle tested on preprod.
Due to the financially sensitive nature of these smart contracts, it would be reckless to release them before they are audited. This proposal is to have these contracts audited so that they can be safely published and used by DAOs and the larger Cardano community.
A safe, thoroughly audited, decentralized solution to launch & bootstrap a token on Cardano.
An alternative solution that circumvents front-running token launches on DEXs and improves liquidity throughout the ecosystem.
Reduce chain load during highly anticipated token launches.
A decentralized tamperproof price discovery mechanism.
The success of the audit can be measured by the amount of assurance it provides to users of the underlying protocol.
So far, we have been in talks with SundaeSwap, Minswap and many other parties, which have been eager to use our price discovery event / liquidity bootstrapping event contracts; however, one reservation frequently brought up is the fact that they have yet to be audited.
We will measure the success of this project by the number of parties which use the contracts once they have been open-sourced after the audit has concluded.
The audit report will be published and shared with the developer community. We will do a media tour and present the audited contracts across various twitter spaces and webinars. They will be presented at:
The audit report will also be published to the smart contracts Github repository.
We have already completed the smart contracts. We have thoroughly tested them; unit tests, property-based tests, and even live tests on the preproduction network. The contracts are highly scalable, robust, and flexible. They can handle thousands of concurrent users.
We have already received multiple quotes to receive an audit for these contracts. The amount we request in this grant proposal is enough to pay for the cost of the audit along with some buffer to cover fixing any findings that may result from the audit.
The goals for this project is to audit our liquidity bootstrapping contracts so that we can safely publish them for the ecosystem to benefit from. We know that the approach is feasible because it has been extensively battle tested and is currently being used by various projects throughout the ecosystem (including Grabbit Marketplace).
The architecture has been reviewed by many of the teams throughout the ecosystem, and the main components have been extracted and taught in various classes across the ecosystem including the Emurgo Cardano Solutions Architect course.
Help projects launch / use our Open Source Price Discovery Event / Liquidity Bootstrapping smart contracts & the associated offchain code.
Conduct the audit, revise the contracts should any issues be identified and publish the resulting audit report.
These contracts are permissionless, customizable, scalable and thoroughly battle tested. Once the audit is concluded we will work closely with various teams across the ecosystem to help integrate the Price Discovery smart contracts and offchain into their products.
Cost of the audit
~$35k
We have already been in talks with various auditing firms throughout the ecosystem. Most of the quotes we received were in the range of $30k-45k USD.
Fix any issues that are identified by the audit
~$5k
This quote is based on our experience having done post audit revisions for many projects (including our flagship product Grabbit)
The project's cost offers value for the Cardano ecosystem beyond its deliverables:
NB: Monthly reporting was deprecated from January 2024 and replaced fully by the Milestones Program framework. Learn more here
Allan Deutsch, Head of Product
Sam Delany, Smart Contract Developer
Allan & Sam will oversee the audit of the Price Discovery Event / Liquidity Bootstrapping contracts.
Additionally, Sam will work to fix any issues identified during the process of the audit.