Indigo Protocol V2 Audit

[GENERAL] Name and surname of main applicant

Cody Butz

[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)

2

[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)

Indigo Foundation will outsource and contract with MLabs to do a 1 month audit of the V2 Aiken Smart Contracts. This audit will include a published audit report and open sourced Aiken smart contracts.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[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.”

MLabs, Software Development company

Aiken, Smart contract language

[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 Aiken smart contracts will be fully open sourced, with a Business Source License, after the audit has been completed.

[SOLUTION] Please describe your proposed solution.

A comprehensive smart contract audit of Indigo Protocol V2 by MLabs, a team with proven expertise in smart contract auditing. Here's a detailed description:

1. Audit Scope and Team: The audit will be performed by MLabs, the same team that successfully audited the Indigo Protocol V1. This ensures continuity and a deep understanding of the protocol's architecture. The team's expertise in Plutus, Aiken, and DeFi domains is particularly relevant for this audit.
2. Objectives of the Audit:
3. Security: To ensure that V2 retains the robust security properties of V1, thereby safeguarding user assets and maintaining trust in the protocol.
4. Efficiency and Performance: Assessing the smart contracts for higher throughput and reduced overhead, which are key enhancements in V2.
5. Integration of New iAssets: Evaluating the integration of additional iAssets into the Cardano DeFi ecosystem, focusing on seamless and secure implementation.
6. Methodology:
7. Comprehensive Review: The audit will involve a line-by-line examination of the Aiken smart contracts to identify any potential security vulnerabilities, inefficiencies, or bugs.
8. Testing and Validation: Employing a range of testing methodologies, including static analysis, dynamic analysis, and manual review techniques, to ensure thorough validation of the smart contracts.
9. Deliverables:
10. Audit Report: A detailed report will be published at the end of the audit, providing insights into the audit process, findings, and recommendations.
11. Open Sourced Contracts: Post-audit, the Aiken smart contracts will be open-sourced, promoting transparency and community trust.
12. Timeline and Budget:
13. The audit is anticipated to take approximately six weeks, with a budget of $150,000 USD.

This solution aims to strengthen the security and efficiency of Indigo Protocol V2, fostering trust and growth within the Cardano ecosystem. The emphasis on continuity (using the same audit team), expertise, and a detailed, transparent auditing process are key highlights of this proposal.

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

The proposed audit of Indigo Protocol V2 will have several positive impacts on the wider Cardano community:

1. Enhanced Security and Trust: By rigorously auditing the V2 smart contracts, the project ensures the security and integrity of the Indigo Protocol, which is crucial for maintaining user trust. In a landscape where security breaches can significantly undermine confidence in blockchain ecosystems, a thorough audit by a reputable team like MLabs reinforces the reliability of the Cardano platform.
2. Increased Throughput and Efficiency: The focus on higher throughput and reduced overhead in Indigo Transactions will directly benefit users by offering faster, more cost-effective interactions. This improvement aligns with Cardano's objectives of scalability and efficiency, enhancing the overall user experience within the ecosystem.
3. Expansion of the DeFi Ecosystem: Introducing more iAssets to the Cardano DeFi ecosystem broadens the range of financial instruments and opportunities available to users. This diversification not only attracts new users and developers but also fosters innovation and growth within the Cardano community.
4. Open Source Contribution: By making the audited Aiken smart contracts open source, the project contributes to the Cardano community's knowledge base. This openness encourages collaboration, learning, and further development, aligning with the ethos of the blockchain and open-source communities.
5. Demonstrating Best Practices: The project sets a precedent for responsible and transparent development practices within the Cardano ecosystem. By employing an experienced audit team and committing to a comprehensive audit process, Indigo Labs showcases the importance of security and diligence, encouraging other projects in the ecosystem to follow suit.
6. Long-Term Reliability and Sustainability: Ensuring that Indigo Protocol V2 retains the security properties of V1 while introducing new features and improvements demonstrates a commitment to long-term reliability and sustainability. This approach strengthens the Cardano ecosystem's reputation as a secure and stable platform for DeFi applications.
7. Indigo Protocol V2 introduces a redemption mechanism for all iAssets, more specifically iUSD, to help stabilize its peg. At the time of this proposal, iUSD is the most liquid stablecoin solution supporting the Cardano ecosystem and is paramount to the future of DeFi expansion on Cardano.

Overall, the Indigo Protocol V2 audit represents a significant step towards enhancing the security, efficiency, and diversity of the Cardano DeFi ecosystem, fostering a more robust, trusted, and innovative community.

[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?

The capability to deliver the Indigo Protocol V2 audit project with high levels of trust and accountability is supported by several key factors:

1. Proven Track Record and Expertise: Indigo Labs, with its background in Plutus, Aiken, and DeFi domain expertise, has already successfully launched Indigo Protocol V1. This prior experience, coupled with the successful audit of V1 by MLabs, demonstrates a strong track record in delivering secure and reliable smart contract solutions.
2. Experienced Audit Partner: MLabs, the chosen audit partner, has proven expertise in smart contract audits, especially within the Cardano ecosystem. Their previous work on Indigo Protocol V1 adds to the trust and accountability, as they are already familiar with the project's architecture and standards.

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

Finalize Test Suite and Documentation

• Description: This involves finalizing a comprehensive test suite for the V2 smart contracts, ensuring all functionalities are thoroughly tested. Additionally, complete detailed documentation of the smart contracts and testing processes.
• Output(s): A fully developed test suite and comprehensive documentation for the V2 smart contracts. Audit team will provide a document stating the prerequisites are met and that the audit is starting.
• Acceptance Criteria: All smart contract functionalities must be covered by the test suite, with successful execution of tests. Documentation should be complete, clear, and accurately reflect the smart contracts' functionalities and test processes.

Completion of V2 Audit, Executive Summary as Evidence

• Description: Completing the full audit of the V2 smart contracts. This includes a thorough examination for security vulnerabilities, efficiency, and functionality.
• Output(s): A detailed audit report, including an executive summary highlighting key findings and recommendations.
• Acceptance Criteria: The audit report should comprehensively cover all aspects of the V2 smart contracts. The executive summary must clearly convey the audit's major findings and recommendations. Acceptance is based on the thoroughness and clarity of these documents.

Completion of Upgrade Path Audit, Executive Summary as Evidence

• Description: Auditing the upgrade path for transitioning from V1 to V2. This focuses on ensuring the upgrade process is secure and seamless.
• Output(s): An audit report specific to the upgrade path, along with an executive summary.
• Acceptance Criteria: The report must thoroughly evaluate the upgrade process, identifying any potential risks or issues. The executive summary should succinctly present the key outcomes. Acceptance depends on the comprehensiveness and clarity of these documents.

Deploy V2 Upgrade to Mainnet

• Description: Successfully deploying the V2 upgrade of the Indigo Protocol onto the Cardano mainnet.
• Output(s): A live and functioning V2 version of the Indigo Protocol on the Cardano mainnet.
• Acceptance Criteria: Successful deployment is evidenced by the smooth operation of the V2 protocol on the mainnet, with all functionalities working as intended and no critical issues.

Publish Audit Report and Summary

• Description: Publishing the final audit report, including a detailed analysis and an executive summary for the community and stakeholders.
• Output(s): A publicly available, comprehensive audit report, along with an executive summary.
• Acceptance Criteria: The published report must be accessible to the public and provide a thorough analysis of the audit findings. The executive summary should effectively communicate the main points to a wider audience. Acceptance is based on the availability and quality of these publications.

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

Eric Coley - CEO

Cody Butz - CTO

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

The Indigo Protocol V2 Audit, a crucial project for ensuring the security and efficiency of the upgraded smart contracts, will be conducted by MLabs, the same proficient team that successfully audited the V1 smart contracts. This continuity in the auditing team is vital for maintaining consistency and leveraging the deep understanding of the protocol's intricacies.

Audit Duration and Team Composition:

• Duration: The audit is anticipated to span approximately 1.5 months (6 weeks).
• Team: The audit will be executed by a skilled team of 4 auditors from MLabs. This team composition ensures a comprehensive and thorough audit, with each auditor bringing specialized knowledge and experience.

Budget Allocation:

• Total Budget: $150,000 USD.
• The budget allocation is structured to cover the extensive efforts required in auditing both the V2 smart contracts and the smart contract upgrades. This involves a meticulous examination of the codebase, testing for security vulnerabilities, efficiency analysis, and validation of the new functionalities introduced in V2.

In summary, the budget of $150,000 USD for the Indigo Protocol V2 Audit is meticulously planned to ensure the engagement of top-tier auditing expertise and comprehensive coverage of the protocol's new and upgraded features.

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

V2 intends on bringing the following value to the Cardano ecosystem:

• Higher Throughput and less overhead for Indigo Transactions
• The same security properties of V1
• Bringing more iAssets to the Cardano DeFi ecosystem

[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