Minswap Aiken Stableswap Audit + Bug Bounty

[GENERAL] Name and surname of main applicant

[GENERAL] Email address of main applicant

Additional applicants

None

[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.

Stablecoins are currently behind as far as adoption in Cardano is concerned. As of July 5th 2023, the Total Value Locked of Stablecoins on the Cardano DeFi ecosystem is of around $4.67mn, far behind other ecosystems. For an ecosystem such as Cardano focused on real world adoption and RealFi, it is imperative to be ready and to push for stablecoin adoption. Without liquidity and proper tools such as an open-source Stabelswap, it is hard to make a strong case for using and transacting with stablecoins on Cardano.

Stable assets, and especially stablecoins, are an essential part of a successful DeFi ecosystem. For example, Curve Finance is currently the 4th largest DeFi application in the Ethereum ecosystem with 3.6bn $USD Total Value Locked. A major part is locked in the “Tri-Pool” which contains USDT, USDC and DAI. This could be replicated on Cardano with existing Cardano stablecoins to create reliable and deep liquidity pools with stablecoins.

A stableswap is a type of DEX that is focused on stable asset trading with minimal slippage and more efficient trading for liquidity providers. It uses the Stableswap invariant, a better function for stable pairs where the curve is flattened, creating a range where prices remain constant. This flattened curve allows for swaps to occur with minimal slippage, even as larger trades affect a token’s liquidity.

Finally, the Cardano dApp ecosystem lacks open-source Smart Contract code. Minswap Labs is committed to open-sourcing the Stableswap contract. In addition, the Stableswap will be built on Aiken, a programming language and framework based on Rust that allows rapid development of Plutus v2 smart contracts with optimal performance and gas cost.

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

The benefits for the Cardano ecosystem of Minswap Labs building an open-source Stableswap are:

1. Increased DeFi usage: Cardano will become a more attractive ecosystem for users looking to trade and obtain yield on their stable assets in an efficient manner. 
2. Higher Liquidity across the ecosystem: stablecoins are essential for many DeFi participants. An efficient, open sourced Stableswap will give DeFi participants a high assurance and more incentives to provide stable assets as liquidity.
3. Minimal Slippage on trading Stablecoins: the Stableswap Invariant has been proven to be the most efficient model for a DEX to enable stable asset trading with minimal slippage.
4. Higher throughput DEX through Aiken: the Minswap Stableswap will be the first major DeFi product to utilize Aiken and leverage its improvements. Aiken simplifies Smart Contract development and deployment while focusing on accessibility and user-friendliness for developers. 
5. Open Sourcing an Aiken-Smart Contract: open sourcing a major DeFi Smart Contract based on Aiken and audited by TxPipe (which developed the Aiken language) will majorly benefit the Cardano developer community. It will provide an example of what a productionized DeFi contract looks like built on Aiken. 

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

Two types of measures will be used to measure the success: 

Quantitative Measures:

• Stable Assets Liquidity: how much stable assets liquidity is the Minswap Stableswap capturing across Cardano?
• Stable Assets Volume: how much stable assets volume is the Minswap Stableswap capturing across Cardano?
• Monthly Unique Active Wallets: how many monthly unique wallets are using the Minswap Stableswap?
• Throughput improvements: how does an Aiken based (Plutus V2) Smart Contract improve throughput of DeFi dApps on Cardano?

Qualitative Measures:

• Composability across Cardano DeFi: how are other protocols using the Minswap Stableswap to offer new features for their users and enhance composability across the ecosystem? 
• Open Source usage: how are developers finding the Aiken Minswap Stableswap useful? 
• User Feedback: constant feedback from the community around the throughput, features and user experience will be gathered and used for improvements.

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

There will be 3 stages in the project and each will require a different strategy:

• Prior to launch of the Stableswap: there will be an education campaign in collaboration with Cardano Spot regarding the importance of stableswaps for DeFi ecosystems. Once the audit is fully completed, an Audit Report will be released. Then, the Smart Contract will be open-sourced and a Bug Bounty period will commence. Once the Bug Bounty period is finalized, the Stableswap will be launched.

• During the launch of the Stableswap: platform launch will be shared on all public channels. An article will be released with the specifics of the Minswap Stableswap, as well as the throughput improvements enabled by Aiken.

• After the launch of the Stableswap: data related to the quantitative and qualitative measures mentioned above will be gathered and shared through all public channels.

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

The Minswap Labs team is composed of several highly experienced Plutus engineers that have been working on developing Plutus-based Smart Contracts for more than 2 years. As such, Minswap Labs has established itself as a highly experienced and capable company specialized in developing DeFi tools in the Cardano Ecosystem.

To see an example of a product, kindly head over to https://app.minswap.org/ and try it out!

The Minswap DEX is currently the Cardano dApp with most Daily Active Users and transactions. Data available at: https://dappsoncardano.com/

It is also currently the Cardano DeFi dApp with highest Total Value Locked. Data available here: https://defillama.com/chain/Cardano?currency=USD

The audit will be performed by TxPipe, a company developing blockchain tools on the Cardano community such as Aiken: https://txpipe.io/

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

The feasibility of the Proposal can be evaluated mainly in the current lack of an open-source Stableswap on Cardano and the low liquidity for stable assets. 

As mentioned above, this project has several goals, they can be categorized into 2 types:

Product Goals

Everything related to the Stableswap product such as usage, liquidity and user feedback. The main goal is to increase DeFi usage on Cardano (mainly around stablecoins) and strengthen the liquidity in the ecosystem.

Development Goals

Everything related to the development of the Stableswap in the Aiken programming language leveraging Plutus V2 improvements, as well as its audit and consequent open source and bug bounty program. 

[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.

As of today June 27th 2023, the Minswap Stableswap code has been completed. As such, the timeline commences with the start of the audit.

Month 1 - the Stableswap code will undergo audit. An educational campaign will begin regarding the importance of Stableswaps in collaboration with Cardano Spot featuring articles, twitter spaces etc.

Month 2 - once the audit has been completed, the audit findings will be addressed and the process will be started to integrate the Stableswap Smart Contract into the current Minswap DEX UI.

Month 3 - prior to launch, the contract will be open-sourced, the Audit Report will be published and a Bug Bounty program will commence.

Month 4 - once the Bug Bounty program has been completed, the Stableswap will be launched. The Stableswap Smart Contract will be integrated in the Minswap DEX UI.

After - Liquidity incentive programs will be launched to ramp up liquidity on the Stableswap making swaps efficient and with low slippage. The process of collecting user feedback and evaluating success based on the metrics highlighted above will commence.

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

Month 1 - educational campaign in collaboration with Cardano Spot about Stableswaps and their benefits for the Cardano community.

Month 2 - addressing the audit recommendations on the Smart Contract.

Month 3 - the Smart Contract will be open-sourced, the Audit Report will be published and a Bug Bounty program will commence.

Month 4 - the Stableswap will be launched and integrated in the current Minswap DEX UI.

After - Liquidity incentive programs and collecting user feedback.

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

Audit

The audit will be performed by TxPipe. 

Audit Budget: $22,000

Development

There will be 4 engineers for around 160 hours (1 month) working on addressing the audit findings and integrating the Stableswap Smart Contract into the current Minswap DEX UI: 

• 1 Full-time Frontend engineer working for 1 month
• 2 Full-time Backend engineers working for 1 month
• 1 Full-time Senior Blockchain engineer working for 1 month

Hourly rate: $80

Development Budget: $51,200$

Bug Bounty

Bug Bounty rewards will be distributed according to the severity of the found vulnerabilities (if any). 

A more detailed document regarding the scope of the vulnerabilities of the Bug Bounty Program and how to submit a bug will be shared once the audits have been conducted. It will follow the same structure as Bug Bounties on Immunefi.

Bug Bounty Budget: $12,000

Education

This educational campaign will be in collaboration with Cardano Spot (https://cardanospot.io/landing)

This campaign will include a detailed article about Stableswaps and their importance for a mature DeFi ecosystem, Twitter threads such as the State of Stablecoins on Cardano, and a Twitter Spaces to answer questions from the community.

Education Budget: $8,000

Total Budget in USD: $93,200

Total Budget in ADA: 332,000 $ADA (converted on July 6th 2023)

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

The cost of the project represent value for money for the Cardano ecosystem for the following deliverables:

• An educational campaign in collaboration with Cardano Spot around Stableswaps and how pivotal they are for the adoption of a DeFi ecosystem.
• A fully functioning Stableswap to enable trading of stable assets in the most efficient manner with minimal slippage
• An open-sourced Aiken Smart Contract which will provide an example developers with an example of what a productionized DeFi contract looks like built on Aiken

[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.