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[GENERAL] Name and surname of main applicant

[GENERAL] Email address of main applicant

Additional applicants

Ruslan Makhlouf

Sam Delaney

Jonathan Rodriguez

Philip DiSarro

Mladen Lm

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

No dependencies

[GENERAL] Will your project’s output/s be fully open source?

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

Project will be fully open source.

[METADATA] Category of proposal

[IMPACT] Please describe your proposed solution.

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.

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

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.

[IMPACT] How do you intend to measure the success of your project?

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.

[IMPACT] Please describe your plans to share the outputs and results of your project?

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:

• IOHK Developer Experience Working Group
• Emurgo Academy Webinars
• Ikigai Twitter Spaces
• CoC

The audit report will also be published to the smart contracts Github repository.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

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.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

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.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

1. Receive the audit (25 days)
2. We have already received quotes from several firms whom are ready to begin the auditing process as soon as we make the payment.
3. Fix any issues that are identified by the audit (~25 days)

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

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.

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

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)

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The project's cost offers value for the Cardano ecosystem beyond its deliverables:

1. Ensuring Fair Launches: The implementation of mechanisms in the Price Discovery Event prevents unfair advantages resulting from front-running practices by smart whales or bots. This enables DAOs to launch tokens fairly, eliminating any advantage gained by offchain bots technical users with alternative methods of tx submission. Equal pricing for all participants levels the playing field.
2. Enhanced Security in Cardano DeFi: With the Price Discovery Event , projects no longer need to hold custody of participants' funds. Instead, funds are deposited in an open-source, auditable Smart Contract. This approach promotes security and trust by providing transparency and confidence to participants, minimizing the risks of fund misuse or mishandling.
3. Promoting Fair and Transparent Price Discovery: The Price Discovery Event contract is designed to facilitate a transparent and open price discovery process for tokens. Cardano sets itself apart from other crypto ecosystems by offering this option, eliminating the issues often associated with token launches. All participants have equal access to information, fostering a level playing field and building trust within the community. By promoting fair pricing mechanisms, the aim is to enhance market integrity and participant confidence.
4. Boosting Cardano's Reputation and Adoption: The Price Discovery Event actively addresses congestion concerns and negative PR during highly anticipated token launches. This will improve confidence in the ecosystem for newcomers, which in turn will hopefully improve liquidity and capital within the ecosystem. These efforts contribute to bolstering the reputation and adoption of the Cardano ecosystem. Consequently, more projects are attracted, creating a thriving and inclusive environment where innovation can flourish.

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.