Last updated 9 months ago
Currently, the main forms of SPO revenue come from staking rewards or ISPO allocations. SPOs should have new revenue opportunities from securing other decentralized infrastructure (such as bridges).
Our solution is to build easy-tooling such that SPOs can tap into a new revenue sources for securing and validating bridge activity between Cardano and new ecosystems.
This is the total amount allocated to New SPO revenue streams for securing bridge infrastructure. 6 out of 6 milestones are completed.
1/6
SPO Tooling and Rewards Model Working Group Sessions
Cost: ₳ 75,000
Delivery: Month 1 - Nov 2023
2/6
Finalize rewards model and tokenomics
Cost: ₳ 250,000
Delivery: Month 2 - Dec 2023
3/6
Development of SPO Watchers Tooling - Build
Cost: ₳ 250,000
Delivery: Month 3 - Jan 2024
4/6
Development of SPO Watchers Tooling - Refinement and Beta Launch
Cost: ₳ 95,000
Delivery: Month 4 - Feb 2024
5/6
Onboarding, Education, and Bootstrapping Materials
Cost: ₳ 50,000
Delivery: Month 5 - Mar 2024
6/6
Project wrap up and further onboarding
Cost: ₳ 130,000
Delivery: Month 6 - Apr 2024
Core team:
Subject matter experts and advisory:
A key dependency for this proposal is getting alignment with stakepool operators. We intend to collaborate closely with a working group made up of community advocates and SPOs. Some of the pools and advocates we have already started (or plan) to consult with include:
Project will be fully open source
N/A
Problem Statement:
Stakepool Operators and delegators are the backbone of upholding the security of Cardano’s decentralized ecosystem. Currently, the main forms for SPO revenue include staking rewards or occasional ISPO allocations. We believe that SPOs can earn a new income stream for providing security of other infrastructure such as bridges.
As for some context, we believe in a cross-chain future where communities collaborate and projects benefit from the various tools available in these ecosystems. However, none of this can thrive and succeed without having decentralization, strong security and risk management assumptions. As such, in the past year alone, according to Chainalysis, over $2 billion USD in cryptocurrency was stolen from cross-chain bridges across 13 separate hacks. Poor design choices such as centralization risks have made bridges an attractive target for hackers and many communities have been financially affected by these events.
Proposed Solution:
Our solution is a new revenue source for SPOs for securing and validating bridge activity. Not only does this have a significant impact on SPOs ability to tap into new income streams, but has huge benefits to the community by improving interoperability and collaboration with other blockchain ecosystems (or even other Cardano sidechains).
The Rosen Bridge utilizes a 2-layer validation framework and is currently operational between the Cardano and Ergo blockchain. The project is already open source and our mission is to become the most decentralized and secure bridge infrastructure and framework available in the blockchain industry.
In order to achieve this mission, the team is looking to draft and submit a CIP, then build out the required tooling to onboard SPOs to validate bridge transactions (and earn rewards for doing so).
How our proposed solution addresses the challenge:
Our team believes that our proposed solution of building a bridge that connects communities / ecosystems and leverages the existing SPO community (while rewarding at the same time) directly addresses the challenge question - which is initiatives to build and support the SPO ecosystem and community.
As part of the design and deployment process, we plan to directly engage the SPO community, starting with a small working group of established and recognised SPOs to help guide our initial direction. Ultimately, for this bridge to have the most robust security assumptions, support and adoption by the SPOs are crucial - hence, ensuring the incentives and value-add is clearly aligned with the SPOs is the only path forward. This consultation and the outcome that follows will have a positive impact on the SPO community.
Impact and value to the Cardano Ecosystem:
The project team’s core goals are also to connect the UTXO ecosystems (and others in the future). Initially Rosen Bridge will connect the Cardano and Ergo ecosystems. However, the same infrastructure can connect Cardano with other ecosystems.
When successful, this will usher in a new wave of liquidity, project activity and collaboration with the broader Cardano ecosystem. Furthermore, this opens up opportunities for Cardano projects to leverage the many different tools available in other ecosystems.
As for the key metrics to track progress and measure success, these include:
Our approach for sharing outputs and progress is as follows:
Members of this proposal and advisory team have strong experience in the blockchain sector and have delivered (and delivering) a number of successful products for the Ergo and Cardano ecosystems. The team are strong advocates of open-source technology and have examples to show for this. As such, they will continue to leverage their experience to ensure that timelines and milestones are met.
Notable examples of project delivered by key team members include:
Project goals:
Validation of approach:
Project milestones by workstream
Workstream 1: Incentivisation and rewards model working group | Week 1-8
Workstream 2: SPO tooling - scoping and design | Week 1-8
Workstream 3: Cardano Improvement Proposal (CIP) draft | Week 4-8
Workstream 4: Development of SPO tooling | Week 8-24
Workstream 5: Onboarding, education and bootstrapping | Week 20 - 26
Deliverables by workstream
Workstream 1: Incentivisation and rewards model working group
Workstream 2: SPO tooling - scoping and design
Workstream 3: Cardano Improvement Proposal
Workstream 4: Development of SPO tooling
Workstream 5: Onboarding, education and bootstrapping
Budget breakdown by workstream: (Total - 850,000 ADA)
Workstream 1: Incentivisation and rewards model working group (60,000 ADA)
Workstream 2: SPO tooling - scoping and design (50,000 ADA)
Workstream 3: Cardano Improvement Proposal (40,000 ADA)
Workstream 4: Development of SPO tooling (550,000 ADA)
Workstream 5: Onboarding, education and bootstrapping (150,000 ADA)
Development fees:
The majority of the costs allocated to the proposal budget is going directly towards development of the open-source tooling for SPOs. The idea is the team will build the Rosen Suite, which will enable to easily set up as a watcher to secure the bridge - this could be security over blockchains or Cardano sidechains. The fees for developers are in-line with industry rates.
SPO working group, incentivisation and onboarding fees:
The large remainder of the costs are associated to ensuring we proactively engage with SPOs on design choices - including the profit distribution and reward system. Further, to ensure the success and benefit to the SPO community, the team will need to spend time onboarding SPOs to secure the bridge. This will include a lot of education, outreach and discussions with the community.
Impact for Cardano:
As mentioned before, this is a novel and innovative approach to enabling SPOs to earn a completely new source of revenue. Not only is this open source, but the tooling is scalable - enabling SPOs to earn rewards for securing bridges between new blockchains and sidechains in the future.
NB: Monthly reporting was deprecated from January 2024 and replaced fully by the Milestones Program framework. Learn more here
The catalyst funded project will be run by the Rosen Bridge team and supported by the zenGate team. The Rosen team will also be supported and consulted by a select group of subject matter experts from the community - made up of SPOs and community advocates. The intention behind this is to ensure maximum alignment on design and launch strategy to ensure a successful adoption of the decentralized tools. The Rosen Bridge team is made up of over 10 developers.
Core Team:
Subject matter experts - Product and Technical: