Liquid X - Web3 protocols for synthetic asset & structured financial product on Cardano

[GENERAL] Name and surname of main applicant

Fay Nguyen

[GENERAL] Email address of main applicant

nguyenhoangduc0701@gmail.com

Additional applicants

nguyenhoangduc0701@gmail.com

[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?

No

[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?

No

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

The source code of the synthetic structured financial functions will not be open source. However, all the blockchain-related coding (smart contracts) will be open source.

[METADATA] Category of Proposal

DeFi

[IMPACT] Please describe your proposed solution.

I and my co-founder simultaneously trade crypto and traditional financial products. But for investors outside the US like countries in Asia, it is difficult to access structured financial products or securities in the US because the procedure is very complicated. And in the crypto environment, too, there are only very simple products for trading such as swaps, staking, and lending. What we need more than that to achieve specific investment goals.

Liquid X is a protocol that enables market markers, and hedge funds to create structured financial products and synthetic asset products with Cardano Blockchain. Investors can easily invest in these types of assets on the platform

• Synthetic asset: Issuers will issue synthetic assets by pledging collateral equal to 300% of the value of the shares they want to create. Traders can easily trade stocks on the exchange without opening an account in the US
• Structured financial products are innovative investment instruments that are derived from and linked to underlying on-chain or real-world assets. They use a variation of credit/risk, liquidity, and maturity transformation techniques to achieve specific investment goals. By offering risk-return dynamics that deviate from its underlying, these investment products ultimately appeal to a broader array of investors.

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

Liquid X is a protocol that provides structured financial products and synthetic assets for the Cardano ecosystem

The benefits that Liquid X will bring to the Cardano include:

• Attracting traditional financial investors to Cardano: Traditional users want to invest in crypto but the market moves too fast making investors feel unsafe, Liquid X can control and give them a choice of fixed-rate products
• Helping users available on Cardano have more choices and customize investment structure
• Bringing financial assets from the real world to the users of the Cardano ecosystem
• Attract assets from other chains to Cardano

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

To measure the success of our project that assesses the benefits to the Cardano Ecosystem, we intend to use the following key metrics:

• TVL: The more assets collateralized to mint on Liquid X, the Cardano's value is increasing
• Trading volume on the protocol: The more trading volume, the more they will use ADA as a fee
• Total of issuers: The more people list assets or use financial products, the more Cardano proves itself to traditional investors.

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

We plan to share the outputs and results of our project through various channels and methods to ensure information spread widely. Here are the key elements of our plan:

• Website: We will regularly share about progress of the project, new client information, upcoming events, and other updates related to product development. 
• Social Media: We will use our social media platforms such as a Facebook fan page, telegram groups, discord, and Twitter to share our outputs and results of projects including milestones achieved, new features, or any significant developments and cooperations of our project.
• White paper: Update roadmap on whitepaper and user can track
• Online Workshop: Sharing knowledge about how to release a structured financial product and synthetic asset

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

These are some of our capabilities to deliver Liquid X with high levels of trust and accountability:

• Strong Team: We have many years of experience in software development, coming from the best public university in the world. Experienced in working in Silicon Valley and implementing many different blockchain projects
• Transparency: One of the core points of the project is the transparency of structured financial products for traditional investors to participate in. And we also constantly update our activities on the project's official channel

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

The main goals of our project are as follows:

GOAL1:

Make it easy to provide an aggregated asset protocol for Issuers:

We designed the simplest and easiest-to-use interface for financial product

We expect to have 5000 regular traders per month and reach this number within 2 years

GOAL 2:

Market markers and hedge funds can easily offer financial products with interest rates that individual investors can customize based on their investment strategy. We will give a historical evaluation, prediction, and suggestions on which strategy will bring the most optimal profit for investors to choose.

[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 - 3 months (1/10/2023 - 1/1/2024)

• Client Web Service
• Synthetic asset minting, Swap function
• Integration with Oracle
• Whitelist for testnet
• 5 blue chip stocks
• 5 crypto (USDC, USDT, BTC, ETH, ADA)
• Mobile App for Issuers
• UI/UX Design
• Mobile App for Traders
• UI/UX Design

Milestone 2 - 3 months (1/1/2024 - 1/4/2024)

• Perpetual, Option, Future
• Integrate Defi exchanges for liquidity
• Retroactive program
• Gold, silver
• 6 currencies
• Mobile App for Issuers
• Coding
• Testing
• Mobile App for Traders
• Coding
• Testing

Milestone 3 - 3 months (1/4/2024 - 1/7/2024)

• Cross-pool trading,
• S&P 500 stocks
• 10 commodity lists
• Selected NFTs
• Structured digital vaults

Milestone 4 - 3 months (1/7/2024 - 1/10/2024)

• Mainnet for system on Cardano
• Lending & Borrowing, DAO voting

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

Here are the deliverables, outputs, and intended outcomes of each milestone:

Milestone 1 - 3 months

• Mobile App for Issuers and Traders in the testing environment
• Intended outcomes: Issuers can mint Synthetic assets, and Traders can use the Swap function. Update real-time price with Oracle
• 5 blue chip stocks
• 5 crypto (USDC, USDT, BTC, ETH, ADA)

Milestone 2 - 3 months

• Mobile App for Issuers and Traders in the testing environment. Updating with new functions (Perpetual, Option, Future)
• Intended outcomes: The user can trade on testnet, User can choose other defi protocols on Cardano to exchange. They can choose Gold, silver, and 6 currencies

Milestone 3 - 3 months

• Upgrade functions like Cross-pool trading, S&P 500 stocks, 10 commodity lists, Selected NFTs, Structured digital vaults
• Intended outcomes: Join the retroactive program with a new function. Issuers can open a structured vault for their investors in testnet. Investors can stake ADA to invest in these products

Milestone 4 - 3 months

• Mainnet for system on Cardano
• Lending & Borrowing, DAO voting
• Intended outcomes: 1000 Traders and 500 Issuers can join. Next year we expect to be 5000 - 10000 traders per month.

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

• Product Management: ₳ 75,000
• Mobile App (iOS & Android) Development: ₳ 33,000
• Web and backend development, DevOps: ₳ 29,000
• Blockchain development: ₳ 37,500
• UI UX Design: ₳ 21,500
• Testing & Business Analysis: ₳ 22,000
• Marketing package: ₳ 16,500
• Infrastructure (12 months): ₳ 16,500

=> SUM: ₳ 251,000

(ADA - $0.3)

Please check this link for a more detailed budget, here.

[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 in following ways:

• Attracting traditional investors: We have created a convenient protocol for investors who want to invest in US stocks easily
• Attracting investors from other chains to Cardano: With structured financial products. Users have many choices and customization options for long-term investment strategies. Complex financial products attract professional financial investors to the platform.
• Providing liquidity for the market through the mechanism of fixed investors who want stable interest rates in balance with investors who want risky investments in Cardano ecosystem
• Diversifying portfolios and trading gives existing users of the Cardano ecosystem a wide variety of choices

In general, the cost of the project represents value for money for the Cardano ecosystem by attracting traditional investors, attracting investors from other chains to Cardano, providing liquidity, diversifying portfolios.

[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