Hydra-Enabled On-Chain Subscriptions & Pay-As-You-Go Micropayments: Open-Source Library for Cardano

[GENERAL] Name and surname of main applicant

Sricharan Ganta

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

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

4

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

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Hydra-enabled, open-source library for plug-and-play integration of subscriptions and pay-as-you-go payments, enabling fast, scalable transactions to unlock new revenue streams for Cardano dApps.

[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?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

The project will follow the MIT open-source license, allowing the community to freely use, modify, and contribute to the technology. Documentation will be comprehensive to ensure easy adoption.

[METADATA] Horizons

Developer Tools

[SOLUTION] Please describe your proposed solution

Our proposed solution is a Hydra-enabled, open-source, modular plug-and-play library that allows any Cardano project to seamlessly integrate subscription payments and pay-as-you-go micropayments. This library is designed to help developers quickly implement scalable, fast, and cost-effective recurring payment systems with minimal setup, reducing reliance on intermediaries and manual processes.

The core of the solution uses Hydra heads for fast, near-instant settlement of transactions which are dynamically created and managed through smart contracts. This ensures that projects can handle recurring payments and micropayments efficiently without excessive on-chain computation.

How It Works

Spin Up Hydra Heads:

1. Projects can quickly deploy Hydra heads to handle high-throughput transactions with low latency. Hydra’s Layer 2 scalability makes it ideal for managing recurring micropayments and subscription services, reducing the need for heavy on-chain computation.

Automated Payments:

1. Once subscribed, the smart contract automatically deducts the subscription fee at regular intervals (daily, weekly, monthly), managing cycles by verifying UTXO locks. This creates a trustless, automated payment process without requiring manual intervention. In addition to subscriptions, users can pay for services on a pay-as-you-go basis. 

Revenue Distribution:

1. Payments made by subscribers are automatically distributed to service providers through smart contracts, significantly reducing processing time and removing the need for manual involvement. Service providers can modify their terms on the fly without downtime.

Key Features:

Hydra Integration:

• Utilizes Cardano’s Hydra Layer 2 (L2) for fast and scalable transactions.
• Enables near-instant settlement and reduces the on-chain load for better efficiency.

Automated Deduction:

• Automatically deducts payments from locked UTXOs at predefined intervals.
• Eliminates the need for manual payment renewals, ensuring continuous service.

Pay-As-You-Go Flexibility:

• Offers real-time payment adjustments based on actual usage.
• Provides a flexible payment model that charges users dynamically.

Developer-Friendly Modules:

• Provides plug-and-play modules that are easy for developers to integrate.
• Supports subscription and micropayment models, streamlining development.

Key Benefits

1. Platform Operators: Increased revenue opportunities and reduced operational costs by integrating a decentralized, automated payment system.
2. Service Providers: Access to a broader user base with enhanced revenue streams and automated payment handling.
3. Developers: Easy integration of decentralized payment solutions into dApps without complex development effort.
4. End Users: Improved control over subscriptions with enhanced privacy and secure automated payments through smart contracts.

Applications

This solution can be applied across various sectors within the Cardano ecosystem, enabling subscription-based and micropayment models for:

• NFT, Gaming, and Digital Media: Simplifies community subscriptions and offers seamless execution for premium content and services.
• Content Creators: Supports cryptocurrency-based fan funding and exclusive access services.
• API and Cloud Solutions: Facilitates cryptocurrency transactions for software licensing and cloud storage services.
• Educational Platforms: Enables cryptocurrency-based subscriptions for educational content and institutional access.
• Gaming Industry: Allows for cryptocurrency transactions for in-game content, premium features, and micropayments.
• Media and Utilities: Supports cryptocurrency payments for streaming services and regular software updates.
• Clubs and Loyalty Programs: Facilitates payments for memberships, exclusive content, and rewards programs.

Why This Solution is Important for Cardano

This modular, plug-and-play library is essential for the Cardano ecosystem as it simplifies the integration of subscription payments and micropayment models, which are vital for building scalable, recurring revenue models. Leveraging Hydra’s Layer 2 allows projects to process fast, low-cost transactions, making Cardano more competitive for applications requiring high-frequency payments.

This solution will:

• Enable sustainable business models by empowering dApps to implement recurring revenue streams through subscriptions and pay-as-you-go systems.
• Expand developer access to Hydra scalability, enabling fast and efficient transactions without the complexity of custom smart contract development.
• Unlock new opportunities for innovation, allowing developers to build more robust dApps for industries such as content platforms, SaaS, DeFi, and gaming.

Pay-As-You-Go Model

• For Developers: Enable immediate monetization of user interactions by integrating a Pay-As-You-Go model, making products more affordable and attractive.
• For Users: Benefit from fair pricing based on actual usage, reducing overall costs and promoting more frequent use of services.

Community Engagement and Feedback

We will actively engage with the Cardano community to gather feedback, refine the library, and promote adoption. This will include workshops, tutorials, and demonstrations of real-world use cases to ensure seamless integration and showcase the solution’s benefits.

Smart Contract Prototype

You can experience our Subscription Smart Contract on the Cardano Preprod Network by visiting the following link:

https://preprod.cardanoscan.io/address/addr_test1wrsxy3ylt59wyh2chuavzp0pzzpg5fu4ndc39uqkjv4v6yqrn6ysp

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

This Hydra-enabled, open-source library will significantly enhance Cardano’s ecosystem by enabling dApps to integrate subscription payments and pay-as-you-go micropayments, driving scalable and recurring revenue models across a variety of use cases.

• Empowering Monetization: By providing developers with a plug-and-play solution, this project enables dApps to implement sustainable, recurring revenue streams with ease, ensuring long-term growth and financial stability.
• Scalable and Efficient: Utilizing Hydra’s Layer 2 technology, the library offers fast, low-cost transactions, supporting high-frequency micropayments and subscription services while maintaining scalability.
• Unlocking New Use Cases: This library opens the door to innovative applications in content platforms, SaaS, DeFi, and gaming, making it easier for developers to build financially viable projects on Cardano.

Measuring Impact

We will track success through key metrics:

• Developer Adoption: Targeting over 30 dApps to integrate the library within the first year.
• Transaction Volume: Measure the number of recurring payments and micropayments processed through dApps using the library.
• Revenue Growth: Monitor the increase in recurring revenue generated by dApps utilizing the subscription and pay-as-you-go models.

Sharing Outputs

• Open Source Access: The library will be publicly available on GitHub, allowing developers to contribute and adapt the solution.
• Comprehensive Resources: Detailed documentation, tutorials, and webinars will be provided to ensure easy adoption.
• Collaboration: We’ll work with the Cardano developer community and Project Catalyst to promote adoption and showcase successful implementations.

This solution will drive tangible growth for Cardano by enabling dApps to monetize effectively, fostering innovation, and ensuring the ecosystem’s sustainability through recurring revenue models.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Proven Track Record:Our team has deployed blockchain solutions that required meticulous planning and robust technical implementation, recognized for their innovation and impact. Our previous Projects can be found at https://www.nucastlabs.xyz/

Development Team: Our developers have extensive experience in blockchain development, particularly on the Cardano platform. They have contributed to successful Cardano-based projects and are proficient in cardano dapp development.

Strong Partnerships: We have established relationships with key platform operators, service providers, developers, ensuring the solution is well-positioned for adoption and scalability.

Community Engagement: Our team actively contributes to the Cardano community, demonstrating our commitment to the ecosystem’s growth and values.

Initial Prototype on Testnet: We have developed a Subscriptions Smart Contract PoC, deployed on the Cardano testnet, showcasing core functionalities like time based subscription deposit and remittance.

Testnet Transaction: https://preprod.cardanoscan.io/transaction/5eea2082b24a56df24a1a23039d30af22fef16ae5ba461397d1aa4fdc139e068?tab=contracts

Smart Contract Address: https://preprod.cardanoscan.io/address/addr_test1wrsxy3ylt59wyh2chuavzp0pzzpg5fu4ndc39uqkjv4v6yqrn6ysp

Iterative Feedback and Refinement: We will develop and refine the MVP based on feedback from initial users and stakeholders, focusing on integration and usability.

Partner Collaboration for Pilot Testing: We will collaborate closely with our platform partners to conduct pilot tests of the MVP. These pilots are designed to validate the solution in real-world scenarios and will help us identify any operational challenges.

Validating Feasibility:

To ensure the solution is feasible and effective, we will focus on a practical MVP and pilot testing with our partners

Adjustments Based on MVP Piloting Results: Insights from these pilots will guide necessary adjustments to the Nuauth Library. We aim to fine-tune functionality, enhance user experience, and ensure seamless integration with partner systems.

Budgeting and Financial Reporting:

We will maintain a transparent budget and provide for the community according to the catalyst guidelines. Regular updates on our progress, challenges, and milestones will be shared with the Cardano community via forums and social media. We will actively seek and incorporate community feedback.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Project Kickoff

A. Milestone Outputs

Project Initiation Report:

Hydra and Subscription Services Landscape Analysis:

• Comprehensive evaluation of the current landscape for scalable subscription services on blockchain.
• Identification of key challenges in implementing subscription models on existing blockchain infrastructures.

Technology Assessment:

• Analysis of existing blockchain Librarys and their applicability to high-frequency transactions and microtransactions.
• Review of Hydra’s capabilities in handling low-latency and high-throughput scenarios.
• 
  

B. Acceptance Criteria

Completion of Initiation Report:

• The report provides an in-depth understanding of the opportunities for utilizing Hydra in subscription-based models.
• Includes a comparative study showcasing Hydra’s advantages in terms of transaction speed, cost reduction, and scalability.
• Clearly identifies the project's scope, objectives, and potential to optimize subscription-based services on Cardano.

C. Evidence of Milestone Completion

Initiation Report:

• A finalized and comprehensive document is submitted to the project repository.
• Presentation of key findings to stakeholders for feedback and approval.

Library Technical Design

A. Milestone Outputs

Technical Feasibility Report:

• Detailed outline of the technical requirements for developing the subscription and pay-as-you-go Library with Hydra integration.
• Identification of APIs, data flows, and integration points for seamless subscription services on Cardano.
• Challenges in achieving high-throughput and trustlessness, with proposed solutions.

High-Level Architectural Design:

• Comprehensive architecture diagram of the Library, illustrating how Hydra is leveraged for scalability and instant settlements.
• Specifications for smart contracts, payment models, and subscription management tools.

B. Acceptance Criteria

Technical Feasibility Confirmation:

• Validation that the Library can technically handle the demands of subscription services, including microtransactions and pay-as-you-go models.
• Clear identification of all technical dependencies, along with mitigation strategies.

Architectural Design:

• The architectural design for the subscription Library.
• Ensures alignment with Cardano’s security and decentralization principles.

C. Evidence of Milestone Completion

Technical Feasibility Report:

• A detailed report submitted and reviewed by the technical team.
• Architectural Design Document:
• A finalized architecture document available in the project repository, demonstrating Hydra’s role in enhancing transaction efficiency.

 Technical Prototyping

A. Milestone Outputs

Library Prototype:

• A functional prototype demonstrating key features such as:
• Seamless integration of Hydra for fast, low-cost microtransactions.
• Secure smart contract management of pay-as-you-go models.
• Sandboxed Testing Environment:
• A secure testing environment configured to validate the Library’s scalability, functionality, and security using simulated subscription transactions.

B. Acceptance Criteria

Successful Prototype Demonstration:

• The prototype showcases the core features, including Hydra’s role in scaling subscription services with instant settlement.
• Demonstrates the ease of integration with existing dApps through the provided API toolkit.
• Stable Sandboxed Testing:
• The sandbox operates reliably with no major bugs or security vulnerabilities.
• Successfully replicates real-world subscription use cases, validating the effectiveness of the Library.

C. Evidence of Milestone Completion

Prototype Documentation:

• Comprehensive documentation detailing the prototype’s capabilities and integration process.
• Sandboxed Testing Documentation:
• Detailed records of test scenarios and outcomes, demonstrating scalability and low-latency performance.

Mainnet Deployment and Project Close-out

A. Milestone Outputs

Final Project Completion and Closure Report:

• Comprehensive documentation covering all project phases, from initiation to deployment.
• Summary of key achievements, lessons learned, and evaluation against initial objectives.
• Mainnet Deployment:
• Full deployment of the Hydra-enhanced subscription Library on Cardano mainnet.
• Clear guidelines and best practices for enterprises and developers to adopt the Library seamlessly.

B. Acceptance Criteria

Comprehensive Documentation:

• The closure report includes a detailed analysis of the project’s technical achievements and overall impact on Cardano’s scalability.
• Evaluation of the project’s success based on predefined KPIs, including transaction speed, cost-efficiency, and scalability.
• Mainnet Deployment:
• The Library is fully functional and accessible on the Cardano mainnet, with detailed usage guidelines for developers and users.

C. Evidence of Milestone Completion

Final Project Closure Report and Presentation:

• A detailed report is submitted to the project repository, summarizing project outcomes and achievements.
• Mainnet Deployment Documentation:
• Developer and user documentation is available in Markdown format on GitHub, ensuring easy access for integration with dApps and subscription services

[RESOURCES] Who is in the project team and what are their roles?

Sricharan Ganta, CEO @ Nucast

Sricharan is a entrepreneur and business development strategist with over seven years of experience in business-driven roles and over four years of experience in the web3 domain. He has a successful track record of delivering innovative products on the Cardano Blockchain. As the CEO of Nucast, Charan is extremely passionate about community building and pioneering solutions. He currently leads a dynamic team of 15+ professionals at Nucast Labs. Additionally, he holds a Masters in Computer Science from the University of Central Missouri, USA.

Sam Jeffrey M, CTO @ Nucast

Building tech on Cardano for 4+ years. Worked as Plutus Consultant at Gimbalabs. Awarded the Presidential Award for Innovation 2021 by the Government of India.

Nucast Labs : Successfully built various scalable Cardano dapps. Nucast is proud to host a highly skilled and experienced development team of 15+ members with over 30 years of combined industry experience.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Milestone 1: Project Kickoff

Total: 20,000 ADA

• Project Manager: 5,000 ADA
• Senior Cardano Developer: 10,000 ADA
• Operational & Research Costs: 5,000 ADA

Milestone 2: Library Technical Design

Total: 45,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer x 2 : 35,000 ADA

Milestone 3: Technical Prototyping

Total: 55,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer x 2: 45,000 ADA

Final Milestone: Mainnet Deployment and Project Close-out

Total: 20,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer x 2 : 10,000 ADA

Total Budget - 140,000 ADA

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

Our SDK, built on Cardano and Hydra, is designed to offer a scalable, cost-effective solution for integrating subscription payments and pay-as-you-go micropayments. By focusing on transparent and efficient implementation, the open-source nature of the project ensures continuous value generation, fostering community-driven innovation and reducing long-term costs.

We follow a lean development approach, where we prioritize features and improvements based on real-time feedback from our partners, users, and the broader Cardano community. This method ensures that our resources are directed toward the most impactful areas, improving both development speed and cost-effectiveness.

By emphasizing scalability, openness, and resource efficiency, this proposal delivers exceptional value to the Cardano ecosystem, providing developers with a seamless, low-cost way to implement recurring revenue models and unlock new opportunities.