AnetaBTC V2 - Decentralized Wrapping Protocol

[GENERAL] Name and surname of main applicant

Austin Negron

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

Entity (Not Incorporated)

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

7

[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)

AnetaBTC is to release our V2 protocol, where the wrapping protocol doesn't depend on a singular centralized entity, increasing security and decentralization.

[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

Project will be fully open source under the MIT license.

[SOLUTION] Please describe your proposed solution.

Aneta Labs is the development organization that built the AnetaBTC protocol, currently the BTC wrapping protocol with the highest Total Value Locked (TVL) on Cardano with ~$580,000 locked (data as of December 5th, 2023 from DeFi Llama here: https://defillama.com/protocol/anetabtc).

Our protocol has successfully processed over 36 BTC (~$1.6 million USD) in transactions.

Aneta Labs is developing a V2 version of our wrapping protocol that is decentralized and doesn't rely on a singular centralized 3rd party. It will be open sourced which should ultimately make the protocol more secure and user-friendly with the intended outcome of making a seamless experience for Bitcoin holders to bring BTC into the Cardano ecosystem.

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

We are currently the leading Bitcoin wrapping protocol on Cardano, however, there are risks that are associated with trusting a centralized entity to hold the BTC. This V2 wrapping protocol won't rely on a single centralized entity, and will be natively built on Cardano.

This will allow more Bitcoin to be securely brought into the Cardano ecosystem, which can then be used in the flourishing DeFi ecosystem on various decentralized exchanges and lending protocols.

[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?

We are very confident in our ability to deliver this V2 protocol and have displayed our ability to deliver a secure v1 protocol, where the smart contracts are open-sourced and have never experienced a security exploit.

To see an example of our product, kindly head over to https://app.anetabtc.io/ and try it out!

Furthermore, our wrapping protocol currently has the largest amount of bridged Bitcoin in the Cardano ecosystem (data available at https://defillama.com/protocol/anetabtc).

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

Testing and R&D

Tasks:

• Investigate new BTC libraries 
• Investigate Cardano indexer solutions
• Implement Guardian Angels indexing (BTC)
• Implement Guardian Angels indexing (ADA)
• Draft communication and metadata standards 

Timeline:

• 6 weeks

Acceptance criteria:

• Are these tasks complete and available publicly on Github?

Networking and Angels Migration Preparation

Tasks:

• Implement Guardian Angels communication
• Implement FrontEnd BTC address derivation
• Implement GuardShift scripts
• Implement FrontEnd data queries 

Timeline:

• 6 weeks

Acceptance criteria:

• Are these 4 tasks complete and available publicly on Github?

Transaction Building

Tasks:

• Implement Guardian Angels transaction building (ADA)
• Implement Guardian Angels transaction building (BTC)
• Implement V2 frontend transaction generation 
• Implement V2 frontend changes

Timeline:

• 4 weeks

Acceptance criteria:

• Are these 4 tasks complete and available publicly on Github?

Integrate and Finalize

Tasks:

• Implement Guardian Angels SigSharing(consensus)
• Implement Transaction tracking and status for frontend

Timeline:

• 6 weeks

Acceptance criteria:

• Are these 2 tasks complete and available publicly on Github?

• Launch public testnet

Timeline:

• 6 weeks

Acceptance criteria:

• Has a V2 protocol link been deployed for public testing with all code available on Github?

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

Aneta Labs, a collective of skilled developers and DeFi enthusiasts across continents like Asia, Europe, and the Americas, is spearheading the creation of the anetaBTC protocol.

Our project lead, Austin Negron, recently completed this interview with Pete from Learn Cardano (https://learncardano.io/podcasts/evolution-and-future-of-anetabtc-a-deep-dive-with-frosty/).

Our commitment to this protocol is highlighted through the initial release of our V1 protocol, freely available for all and fortified with a strong security record. Presently, it stands as the leading Bitcoin wrapping protocol in the Cardano ecosystem with 26x more BTC than the next Bitcoin wrapping protocol (as of the time of this writing). 

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

Our allocated budget for development involves a specialized team dedicated to perfecting the protocol.

This includes 4 skilled engineers:

• 1 x Senior Blockchain engineer for 7 months at $7,000 per month
• 1 x Frontend engineer for 7 months at $5,000 per month
• 1 x DevOps engineer for 7 months at $4,500 per month
• 1 x Project manager for 7 months at $4,500 per month

Total Development Budget: $147,000

Our total allocated budget stands at $147,000 in USD, which amounts to ~384,000 ADA (converted on November 29th, 2023).

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

Having a Bitcoin wrapping protocol on Cardano brings several advantages to the ecosystem:

1. Interoperability: Integrating Bitcoin into the Cardano ecosystem allows for interoperability between two major blockchains. This creates opportunities for users to leverage the strengths of both networks, enabling cross-chain transactions and interactions. It opens doors for decentralized applications (dApps) on Cardano to utilize Bitcoin's liquidity and value without leaving the Cardano ecosystem.
2. Enhanced Utility: By wrapping Bitcoin onto Cardano, users can access the benefits of Bitcoin within the Cardano ecosystem. This includes participating in smart contracts, decentralized finance (DeFi) applications, and other services that leverage Cardano's scalability, faster transaction speeds, and lower fees. It amplifies the utility of Bitcoin while tapping into Cardano's advanced functionalities.
3. Diversification and Accessibility: The presence of a Bitcoin wrapping protocol offers users diversification options within the Cardano network. It allows Bitcoin holders to explore different DeFi opportunities, yield farming, lending, and borrowing without having to move their Bitcoin holdings to different platforms. This convenience promotes accessibility and encourages participation in various financial activities on Cardano while retaining exposure to Bitcoin's value.

Furthermore, our open source code will allow anyone to easily build on top of our code and innovate more possibilities for Cardano, including support of other assets such as Ethereum and Algorand, potentially bringing even more liquidity into the ecosystem.

Ultimately, this funding from Catalyst has the potential to bring substantial external liquidity directly into Cardano.

[IMPORTANT NOTE] The Applicant agrees to Fund 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