DirectEd- Crowdfunding & Milestone-Based Smart Contract Primitive and Audit

[GENERAL] Name and surname of main applicant

Simon Sällström

[GENERAL] Email address of main applicant

simon.sallstrom@directed.dev

Additional applicants

Rohan Mitta. Smart Contract Lead.

Edmund Ebiyenrin. Front end developer

John Nidirigi. Front end developer

Supporting Developers and firms

• Haskell.team - team of former IOG employees and Haskell developers lead by Bartłomiej Kącicki
• MLabs - development firm behind many leading projects on Cardano, including GeroWallet, Wingriders

Auditing Firms in Consultation

• Anastasia Labs. Audited AnetaBTC,
• Tweag.
• FYEO.

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

12

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

No

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

Yes

[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.” .

Haskell.team - parameterizing the compiled script

MLabs - off-chain code

Lucid - our off-chain code is based on the capabilities of Lucid. Prior to this, we worked using Mesh and its limitations meant that we could not complete the off-chain code but had to instead migrate to Lucid. This caused significant delay in our current proof-of-concept deployment of the dApp. 

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

Yes

[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

Other

[IMPACT] Please describe your proposed solution.

We propose to generalize and audit the milestone-based smart contract developed by DirectEd and then make it "off-the-shelf" usable for any project to implement.

By off-the-shelf usable, we mean that a Web2 developer should be able to implement it to their use case with only a few Man-Days of external (Haskell/Plutus) consultancy required (to ensure that the primitive was correctly parameterized).

Below is a description of the Generalized Smart Contract Primitive

There are four types of Agents and a smart contract involved in this use case. 

A person (here understood as a Cardano stake address) can have any number of roles at the same time. We shall define all four Agent types below. We will then describe how they interact. "Pooling Smart Contract", the smart contract defines the number of Agent type (defined below), who they are (stake address), and the parameterization of the Milestones Smart Contract. 

Definitions

• "Milestones Smart Contract", defines the Recipients, number of milestones, token and amount of each token. 
• "Facilitator", the agent defining the parameters of the milestones smart contract, responsible for deployment, defines which people (Cardano wallets) will be Reviewers and Examiners.
• "Investor", the agent(s) providing liquidity to the pooled smart contract(s). 
• "Approver", the agent(s) with the (joint, if mulitple) power to approve which "Recipient(s)" will receive Funding. 
• "Recipient", the agent(s) receiving the funds. 
• "Examiner", the agent(s) with the power to determine if a milestone has been reached. Can be interpreted as a "Human oracle" if it is a physical person, or a smart contract making decisions purely based on an oracle data feed. 

How the Agents Interact

Let X, Y, F, M, and A be integer variables strictly greater than 0. 

We assume that the Facilitator has already defined all relevant parameters and deployed the smart contract. We will describe the flow for an arbitrary number of each of the other Agents but just one Recipient, the user flow is identical for several Recipients. 

1. X investors sends funds to the "Pooling Smart Contract" on the Cardano blockchain. 
2. Y Approvers each send an Approver NFT to "Recipient 1". This means that they approve Recipient for a distribution of Funds (F) divided into M tranches/milestones, each with A amount (hence, F=M*A is Funding amount approved for "Recipient 1"). "Approving" means sending an NFT to the wallet of "Recipient 1". 
3. "Recipient 1" sends Y Approver NFTs to the "Pooling Smart Contract". This initialises the "Milestones Smart Contract 1", taking F from "Pooling Smart Contract" to "Milestones Smart Contract 1". Each Recipient has a unique "Milestones Smart Contract". 
4. "Recipient 1" provides evidence of progress towards milestone M. Each of the N Examiners mints and sends a milestones completion NFT for milestone M to "Receipient 1" if they deem that milestone M was met. 
5. "Recipient 1" sends N milestone NFTs for milestone M to smart contract. The smart contract burns the milestone NFTs and returns "A" amount to "Recipient 1". 
6. The process is repeated until all milestones have been met or if the Deadline defined in the "Milestones Smart Contract" has been reached and funds are returned to a pre-defined address.

Extra notes 

• Amount A and types of Cardano native tokens can vary for each milestone M. 
• Each milestone distribution require a unique set of NFTs. 
• The NFT from each Reviewer is necessary but not sufficient to receive milestones funding (Examiner NFT is also necessary). 
• The Pooling Smart Contract contains a timer such that if not all funds have been approved for a particular Milestones Smart Contract, then it can be returned to a pre-defined wallet. 

The above-described Smart Contract Primitive has a very large number of business use cases, depending on the parameterization of the above. Any situation which requires accountability and where parties would like to distribute the approvals mechanism and automate the payout mechanism would be suitable. 

To illustrate, we will sketch a small number of them below, including the use-case that inspired the development of it. 

• DirectEd Development Foundation Access Scholarships. Donors contribute to a scholarship pool for students from a specific school. The School and DirectEd are the "Approvers". Students have to pass milestones in order to receive further mobile data stipends or incentive prizes. A Chief Examiner (DirectEd or external) is the Examiner. 
• Catalyst funding. Project proposals in Catalyst would be approved by the community, currently represented by IOG who would be the "Approver". Right now, Challenge Team members have served as "Examiners" in a manual process. The decisions on milestones pass examinations would become highly transparent.
• Construction Work. Upon approval of a loan, bank would fund a Pooling contract. Lender who wants to build a house selects a service provider (Recipient) and defines trusted domain experts (Examiners) and can assess the quality of work of construction workers for each milestone. 

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

The Challenge describes that the purpose of this challenge is to provide a stream of resources to teams that want to develop their projects and contribute back to the community by sharing part of their efforts in terms of open source projects, open-source frameworks, and accessible knowledge.

This proposal addresses all of the above three points. 

1. Open Source. The DirectEd Development Foundation’s own GitHub repository has been open-sourced since January 2023, enabling anyone to utilize the milestones-based smart contract for scholarships. 
2. Framework. We use the term Smart Contract Primitive because we believe this code-base constitutes a foundational building block for a plethora of use-cases. Reducing cost of employing a blockchain solution by 10x. 
3. Accessible Knowledge. We not only provide knowledge in the form of documentation and guidance for non-Web3 developers, we will also build out the infrastructure making the process of taking this out to the real world both secure (through the auditing firms we hire) and accessible. 

What Value Does This Bring to the Cardano Ecosystem?

• Reducing the cost for any business requiring milestones-based (tranches) distribution of funding. We estimate that this reduces the cost of development, including auditing, for the proposed use cases from mid-high 6 figures to less than $5000.
• Well-documented and highly versatile Open Source repository and Framework, helping further educate new developers looking to build on Cardano. 

Proven demand

Other than our own project, we have received public testimonies from two projects. Several web2 businesses have also expressed their interest but we are not allowed to disclose those.

Cardano projects with public testimonies:

• Commonlands. 
• Selfdriven Foundation. 

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

We will have the following medium-term metrics of success (after delivering the product)

• Number of Web3 projects adopting the Smart Contract Primitive with their own parametization
• Number of Web2 companies adopting the Smart Contract Primitive.
• Number of different Github accounts and number of comments, pull request,s and commits to the GitHub repo

Long Term-

• Number of transactions interacting directly with Smart Contracts based on this project.
• Number of transactions enabled (second order) by smart contracts from this repository

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

The two main sources of output and updates will be the DirectEd Progress Updates page and the Github Repository itself.

1. Documentation: We will create comprehensive documentation that explains the implementation and usage of the smart contract. This will be publicly accessible on our GitHub repository.
2. Community engagement: We will actively engage with the Cardano community through forums, social media platforms, and developer channels to share our project's outputs, progress, and insights.
3. Presentations and workshops: We will organize presentations and workshops to demonstrate the functionality and benefits of the milestone-based funds distribution smart contract. These events will target educational institutions, scholarship organizations, and the broader blockchain community.
4. Collaboration opportunities: We will actively seek collaboration opportunities with other projects and organizations in the Cardano ecosystem to leverage synergies and promote the adoption of our solution.

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

Proven track record of delivering

DirectEd has a long-standing history within the Cardano ecosystem and it was born out of a project proposal in Catalyst Fund 6 (proposal). It has since then received funding for two proposals in Fund 8 (dApp & SSI). Closeout video for the F8 dApp proposal here. To sign up for testnet Alpha testing, go to http://testnet.directed.dev/ (opens July 31st). We embrace radical transparency, as can be observed through our public Progress & OKR page and by inspection of our wallet transaction metadata ($directed, $simondirected). 

Our SSI proposal is still in progress after both technical and operational challenges alongside contingencies outside of our control. After undertaking feasibility study, several aspects of the original idea contained in the proposal was found to be intractable. More details on other factors can be found in this Change of Scope request that has been submitted to IOG. 

DirectEd has delivered in several ways. Utilization of the network, open-source code contributions and real-world impact & partnerships. The section below quantifies each of these:

Cardano use

• 120+ wallets created and estimated 250+ transactions (lower end). To illustrate, the Decentralised Tutorial Marketplace pilot has (at the time of writing) generated 130 transactions. You can see it being actively used by inspection of the policyID https://cardanoscan.io/tokentransactions?assetId=d365ad6a86fe81ed303eab00fc46031e88879166f7d26a271a553009445456 
• Salaries have been paid on-chain. Previous treasury address: https://cardanoscan.io/address/0158a6c035359d0c470f790c0eedc10b034bcbefeccf3573b979236358a6f473253923585a4137f57aa71ae386a96ca1f568ffec3c35320910. Current treasury (multi-sig): https://cardanoscan.io/address/31edbbf1a2258c28b4fe58fd29abd38d79cf8b2d576006343de5d83ff8edbbf1a2258c28b4fe58fd29abd38d79cf8b2d576006343de5d83ff8 

Open Source Contributions (repo)

• CIP-30 wallet connection for any NextJS/ReactJS website. Our wallet connect automatically detects which Cardano browser extension wallets are present in your browser and displays a dropdown upon hovering of the ones detected.. 
• NFT-gating. We have written code enabling simple NFT gating for a NextJS/ReactJS website. Users can either choose to gate content by policyID in an array (multiple policyIDs can be added) or by the unique asset ID. This gives website owners a novel method of access control that does not hinge on storing emails and passwords.
• Milestone-based smart contract. This smart contract enables accountability of approved granting of funds in a distributed manner wherein Examiners (human oracles) must issue tokens to grantees before they can redeem each tranche payout. 
• Voucher Redemption Contract. This smart contract enables education funders to restrict the use of stipends for specific uses, in our case students receive tutorial vouchers and only tutors can redeem those for stablecoin. 

Real-world impact and Partnerships 

• 100+ students trained in our 1-week-long Introductory Coding course in Python with some testimonies here. Students received basic blockchain education and testnet wallet onboarding, video recording of the workshop here. 
• 14 Access Scholarships funded through the DirectEd Lions NFT fundraiser. This financed purchase of laptops, WiFi devices and data bundles for students from needy backgrounds, enabling them to partake in the DirectEd Bootcamp. Images here. Sample on-chain transactions for data bundles and tutorial vouchers. Check out our Twitter for some of the testimonials from the students! 
• MOUs with 3 national high schools in Kenya, including most notably Mang’U High - one of the most famous schools in the country, with many eminent alumni including one former president, several vice presidents and a former governor of Central Bank of Kenya. Pictures from the MOU signing here. 
• MOU with Kotebe University of Education in Addis Ababa. This university is dedicated to research and development in education for Ethiopia. 
• In-person Bootcamp launch day at Young African Leaders Initiative East Africa regional center at Kenyatta University (USAID project).
• Sponsorships: [CLOVR] stake pool, [KIND] stake pool, COTI Group
• Internship partnerships with Snapbrillia and Tally 
• Other partnerships: Cardanowarriors, Web3 User Group

Traction 

• In the spring of 2022, DirectEd was admitted to the inaugural Ariob incubator for Catalyst-funded Africa projects. 
• During the Cardano summit, CEO Simon Sällström met with Shahaf Bar-Geffen (CEO of COTI) who generously agreed to provide a sponsorship for the first cohort of DirectEd students. 
• CEO Simon was invited to speak at NFT.NYC on a panel “Why NFTs will revolutionize charitable giving”.

Media and Twitter spaces

Spring 2023

• Learn Cardano - open source milestone based contact & updates from Ethiopia
• Subcritical - DirectEd programme
• Xeberus - transparency and corruption 

Fall/Winter 2022

• Cardano Hotel interview
• Vlog - my personal why
• Cardano over coffee 
• Fire in the whole
• Bullish Dumpling Twitter space

Financial Management and Transparency

We have implemented robust financial management processes, leveraging cardano blockchain technology for transparency, accountability, and responsible use of funds. All transactions contain metadata and can be tracked on the Cardano blockchain. We maintain accurate records, conduct regular audits, and provide transparent financial statements to relevant parties, promoting transparency and accountability in our financial management practices.

To this end, we have implemented the following policies for our treasury management. 

1. Catalyst funds received in the main multi-sig with 5 signatories, with 3/5 signatures required for any transaction. 
2. ADA funds received are immediately converted to stablecoins to avoid volatility
3. No more than ½ of on-chain assets will be held in any one given stablecoin in order to reduce risk. 
4. All transactions contain metadata regarding its intended use. 
5. All DirectEd-controlled wallets will contain ADAhandles indicating its purpose and controller. 

This means we have a multi-sig for the custodianship of received funds. We convert the majority of funds to one or several stablecoins upon receipt. We also extensively document each transaction with information about its use in the metadata. The multi-sig wallet can be explored here ($directeddev) and the payout wallet ($directedsimon) can be audited here.

Project Governance and Reporting

Building upon our previous project experience, we have established a robust project governance structure that emphasizes transparency and accountability. Regular reporting and monitoring mechanisms are in place to track progress and ensure adherence to project milestones and targets. You can inspect our public Progress reporting and OKR page here. 

As part of our commitment to transparency, we implemented a progress page for donors to track the performance of students, providing updates on their achievements, which can be observed by donors (NFT gated) here. This reporting framework enables stakeholders to stay informed about project status, outcomes, and financial performance, fostering transparency and accountability throughout the project lifecycle.

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

1. Develop a milestone-based funds distribution smart contract on the Cardano blockchain.
2. Conduct on-chain and off-chain code audits to ensure the security and integrity of the smart contract.

We will validate the feasibility of our approach by:

1. Demonstrating a working prototype of the smart contract and conducting thorough testing to ensure its functionality and reliability.
2. Engaging with the Cardano community and seeking feedback on the smart contract's design and usability.
3. Collaborating with auditors and security experts to conduct comprehensive code auditsto identify any vulnerabilities or potential issues.
4. Deploying the smart contract on the Cardano mainnet and monitoring its performance, stability, and adoption by scholarship programs.

[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.

Milestone 1: Smart Contract Development

• Develop the milestone-based funds distribution smart contract using Plutus.
• Implement functionalities for accepting donations, selecting scholars, and disbursing funds based on milestones.
• Conduct initial testing and debugging. Timeline: Month 1-2

Milestone 2: On-Chain Code Audit

• Engage an external auditor to conduct a thorough on-chain code audit.
• Address any issues or vulnerabilities identified during the audit.
• Ensure compliance with best practices and security standards. Timeline: Month 3-4

Milestone 3: Off-Chain Code Audit

• Engage an external auditor to conduct an off-chain code audit, including the validation of integration with external systems and data sources.
• Address any issues or vulnerabilities identified during the audit.
• Ensure compliance with best practices and security standards. Timeline: Month 5-6

Milestone 4: Deployment and Testing

• Deploy the smart contract on the Cardano mainnet.
• Conduct extensive testing and stress testing to ensure its scalability and performance.
• Gather user feedback and make necessary improvements. Timeline: Month 7-9

Milestone 5: Documentation and Community Engagement

• Create comprehensive documentation for the smart contract, including user guides and technical specifications.
• Organize presentations, workshops, and webinars to showcase the functionality and benefits of the smart contract.
• Engage with the Cardano community through forums, social media, and developer channels to gather feedback and promote adoption. Timeline: Month 10-12

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

Milestone 1: Smart Contract Development Deliverables:

• Milestone-based funds distribution smart contract implemented in Plutus.
• Outputs: Functional smart contract capable of accepting donations, selecting scholars, and disbursing funds based on milestones.

Milestone 2: On-Chain Code Audit Deliverables:

• On-chain code audit report.
• Outputs:
• Identification and resolution of any security vulnerabilities or issues in the smart contract code.

Milestone 3: Off-Chain Code Audit Deliverables:

• Off-chain code audit report.
• Outputs: Validation of integration with external systems and data sources.
• Addressing any vulnerabilities or issues related to the smart contract's interaction with external components.

Milestone 4: Deployment and Testing Deliverables:

• Deployed smart contract on the Cardano mainnet.
• Outputs: Stable and scalable smart contract ready for production use.
• User feedback and testing results for further improvements and optimizations.

Milestone 5: Documentation and Community Engagement Deliverables:

• Comprehensive documentation, including user guides and technical specifications.
• Outputs: Increased awareness and understanding of the milestone-based funds distribution smart contract.
• Engaged Cardano community, including scholarship programs and organizations, interested in adopting the smart contract for their funds distribution processes.

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

Smart Contract Audit

ADA 100,000

Development (partially retroactive) and Documentation Costs

ADA 100,000

Business intelligence and Outreach

ADA 20,000

Project Management and Admin

ADA 30,000

Community Reporting and Outreach

ADA 5,000

ADA 255,000

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

The cost of the project represents value for money for the Cardano ecosystem by:

1. Providing a robust and secure smart contract solution for milestone-based funds distribution in scholarships.
2. Promoting transparency, accountability, and equal opportunities in scholarship programs.
3. Showcasing the real-world applicability of Cardano's blockchain technology in the education sector.
4. Engaging the Cardano community through documentation, presentations, and workshops to foster adoption and collaboration.
5. Conducting thorough code audits to ensure the reliability and security of the smart contract, reducing the risk of vulnerabilities and potential losses.

[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.

I Accept