Create a CNT marketplace on Norwegian Block Exchange (NBX.COM)

[GENERAL] Name and surname of main applicant

Eystein Hansen

[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)

NBX will launch a Cardano Native Token marketplace with 5 CNTs offered with trading pair USDC to expand our Cardano product on the exchange.

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

For security and competitive reasons, we will not be able to open source the tech stack of our exchange for this proposal.

[SOLUTION] Please describe your proposed solution.

There are arguably currently no large Centralized Exchanges providing a marketplace of several CNTs due to the fact many exchanges rely on 3rd party solutions to offer Cardano and these solutions have not yet implemented full capability for CNTs. NBX has an advantage here in that we already have our own in-house Cardano solution tech stack so we are able to customize our solutions to the requirements CNTs will have for AML as well as integration with our market-making engine. We would like to engage with the Catalyst treasury as we have seen both DEXs and Wallets getting approval for funding and hope that covering our costs for developing a CNT marketplace to expand our Cardano product on the exchange and believe this is something that is also beneficial to the Cardano Ecosystem.

Another part of the problem is that exchanges are hesitant to take on projects with lower trade volumes and associated costs of market making and AML. We at Norwegian Block Exchange believe this is a market that will flourish over time and would like to facilitate early market-making for 5 CNT projects currently planned for the initial listing of the marketplace: BOOK, IAG, NEWM, NMKR, WMT with trading pair of USDC for each and to have them available for atleast a year after the launch and more than likely longer if there is any trade volume in the trading pairs. We believe by doing this we would be helping pave the way for future CNTs to have an easier time getting listed across exchanges globally once there is demonstrable data that there is a market for these CNTs. 

Note that we say currently planned in case any of the token projects we have reached out to object to such a listing we would prefer to collaborate with token projects that want to be listed on our exchange for marketing and collaborative purposes. In case of any objection, we will find a replacement token and will list 5 tokens for the initial CNT marketplace. Also note NBX reserves the right to withdraw a CNT from the marketplace in case it is no longer in compliance with regulations NBX is subject to as an exchange marketplace, however, we do not foresee this to be a problem from our initial due diligence on the projects. 

There are many interesting CNT projects to choose from and our keyword for the first batch of CNTs we would list is the potential for disruptive change. We have long been fans of World Mobile and what they are trying to achieve in the telecom industry. We believe that Book.io can be just as disruptive in the book publishing industry and that NEWM could potentially be as disruptive for the music industry, while IAG could be as disruptive to the storage provider industry with its GDPR compliance and intelligent market, and finally, NMKR could be just as disruptive in lowering the barriers to entry for new entrants into the NFT marketplace on Cardano with all the potential that could have for the future. 

By utilizing our own tech stack and already existing Cardano product, we should be able to integrate CNTs quickly both in terms of technical implementation, but also in terms of legal compliance and market-making functions and with this enhance our Cardano product further. We are available for customers in 190 countries (for more info see https://nbxsupport.zendesk.com/hc/en-us/articles/360047722852-Is-NBX-available-in-my-country-) and we believe our CNT marketplace could be utilized by many of the Cardano community. 

Finally, we believe there are Cardano ecosystem users who would like more fiat on/off ramps for CNTs and to be able to convert CNTs into fiat and fiat to CNTs on one single platform such as ours and with practical features such as a report that can be used imported to tax overview services such as https://www.kryptosekken.no/ and with an overview of all trades done by the customer on the platform.

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

By successfully listing the CNTs on our exchange we hope other exchanges will follow suit once they see that this is both achievable and practical in terms of Anti-Money Laundering (AML) and Market Making (MM). We believe the impact of this will be immediate by having the CNTs available on a publicly listed exchange that has high standards for AML (at the time of writing this we scored nr 6 in the world in https://www.hoptrail.io/leaderboards ). We hope this will encourage more trade and adoption of Cardano Native tokens. We will measure the impact by having successfully launched the CNTs on our marketplace and will share this result with the wider community once the CNTs are available. 

[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?

NBX was founded in 2018, and is headquartered in Oslo, Norway. The company is registered with Finanstilsynet (the Norwegian Financial Supervisory Authority) and is listed on the Oslo Stock Exchange Euronext Growth. We are audited by Moore. NBX listed Cardano in November 2021. We have 83500 registered users as of the first half of 2023 with a quarterly volume of 202 MNOK (around 20 mil USD). We believe this demonstrates that we are a capable Exchange that has the ability to deliver on a CNT marketplace. 

We are actively engaging with the Cardano community, for example, we own a staking pool Ada North Pool and the operator is actively part of the Nordic Cardano community attending multiple events as well as being part of organizing them. We have since the launch of Cardano on our exchange had an in-house tech stack for Cardano, and this has been successfully running in production since. We believe our knowledge of the Cardano ecosystem, combined with our expertise in delivering a CNT marketplace, makes us suited for this project.

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

• Set up testnet environment for the initial version of integration.
• Design and document deposit and withdrawal flows related to CNTs.
• Configure external CNT price fetching.
• Extend transaction detection code to support CNT detection.
• Update internal Cardano transaction library to build, sign, and submit transactions with CNTs.

Acceptance Criteria: Demonstrate CNT price fetching working successfully as well as a successful detection of a CNT transaction. Demonstrate that we have built, signed and submitted a transaction with a CNT on our internal testnet environment.

• Front End internal implementation of the first testnet CNT asset and market.
• Deploy and full internal coss-team test of deposit and withdrawal flow for the first testnet CNT
• Deploy and full internal coss-team test of new market.

Acceptance Criteria: Show a visual of the front end implementation. Show multiple CNT successful transaction and confirmation from AML team and Market Making that all AML and MM routines are in place and working on testnet.

• Mainnet version of CNT marketplace
• frontend for CNT marketplace finished. 
• Confirmation from AML team and Market Maker, that all AML and MM routines are in place.

Acceptance Criteria: Visual of the frontend for CNT marketplace. Mainnet version of CNT marketplace demonstrated to be working, and confirmation from AML team and Market Maker that all AML and MM routines are in place on mainnet.

• Official launch of CNT marketplace on NBX.com, including blog posts on all of the tokens listed. 
• Integrate trade report that can be used for tax overview for Cardano Native tokens for our annual report and activity pages.
• Project closeout report and project closeout video

Acceptance Criteria: CNT marketplace has live and tradable tokens on NBX.com for our customers. Our customers can see their CNT trade activity in a report. We have made our project closeout report and a project closeout video.

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

Eystein Hansen

Works as head of staking at Norwegian Block Exchange and operates the staking pool Ada North Pool (Ticker ANP). Maven Cardano Ambassador. Intersect Civics committee member. Cohost of CIP 1694 Workshop in Horten and cofounder of the Nordic Cardano Community (NADA). Master's degree in psychology and master's degree in Law.

https://www.linkedin.com/in/eystein-hansen-93376756/

Will work on the project planning and scoping for the CNT listings as well as being a facilitator for anything related to Cardano technical or community-wise between all the personnel that will work on the project.

Alex Karpov

Works as Chief Technology Officer at Norwegian Block Exchange. Worked on Cardano blockchain integration at Norwegian Block Exchange. Also worked on a native ADA staking project at Norwegian Block Exchange. Attended the Cardano Summit in Dubai 2023. https://www.linkedin.com/in/alex-karpov/

Will be responsible for planning, scoping, and implementation of CNTs listings.

The rest of NBX:

Apart from the main responsible persons we also rely on all of NBX (NBX has 19 employees), including 4 more backend developers and 2 frontend developers, a market-making team, a compliance and risk manager, a security team and financial crime prevention team, as well as our AML team that are certified ACAMS which is considered a gold standard in AML.

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

Milestone 1

35000 ADA will cover the development costs for this phase of the milestone including developer time, but also initial work on Anti Money Laundry (AML) routines and requirements as well as setting up and managing testing environments. 

Milestone 2

35000 ADA will cover the development costs for this milestone as well as both continued AML work as well as initial work on Market Making (MM).  

Milestone 3

35000 ADA will cover the development costs for this milestone as well as any testing and security tests as well as continued work on AML and Market Making now for Mainnet. 

Final Milestone

40000 ADA Budget for any outstanding issues for developers such as discovered edge cases and maintenance and follow-up for a year after launch. This amount includes the development of a trade report integration for CNTs. 

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

We would both widen the listing of CNTs on Centralized Exchanges (currently planned WMT, IAG, NMKR) as well as introduce CNTs to Centralized Exchanges (as of writing this currently planned BOOK and NEWM) and believe this brings value to the Cardano Ecosystem both in facilitating trading directly with USDC while ensuring that AML is followed for both fiat onramp and offramping. Our ask of 145.000 ADA covers our development cost, management, running costs, and also risks related to swings in the ADA price during the milestones and delivery of the project. We believe this is a reasonable amount for the development effort involved and the risks we take on by being an early mover in introducing these CNTs to a CNT marketplace with an unknown volume of trade and that this project cost will compare favorably to what other comparable CEXs would ask for listing 5 CNT’s. 

[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