hodlCoin Staking Platform for Cardano Tokens

[GENERAL] Name and surname of main applicant

Dr. Bruno Woltzenlogel Paleo (a.k.a. Zahnentferner) -- Djed Alliance -- The Stable Order

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

Entity (Not Incorporated)

[GENERAL] Co-proposers and additional applicants

Whale Finance:

• Luiz Vasconcelos Junior: Graduating in Computer Engineering in the Technological Institute of Aeronautics (ITA, Brazil) - class of 2024. Previous work include equity research in a Brazilian hedge fund (2021 - 2022) and responsible for Blockchain and tokenization in a Brazilian fintech unicorn (2023). In 2024, participated in the Polkadot Blockchain Academy in Hong Kong as a founder and was graduated with distinction (4 out of 35 founders). Hackathon winnings include 1st place in DeFi in Zencon 2023, XDC Network 1st place bounty in ETHDenver 2024, 1st place BNBChain hackathon in Brazil, 2022.
• https://github.com/luiz-lvj

• Bryan Diniz Borck: graduating in Computer Engineering from the Technological Institute of Aeronautics (ITA, Brazil) - class of 2024. My previous work includes equity research at one of the largest Brazilian hedge funds (2022 - 2023). I achieved a top 5 placement in the Brazilian University Mathematics Olympiad (2022). In 2024, I participated in the Polkadot Blockchain Academy in Hong Kong as a developer, focusing on Rust and Substrate. My hackathon achievements include 1st place in DeFi at Zencon 2023, 1st place in the XDC Network bounty at ETHDenver 2024, and 1st place in the BNBChain hackathon in Brazil in 2022.
• https://github.com/BryanBorck

Note: ITA is the top university for engineering in Brazil. Acceptance rate is around only 1.5% and ITA's graduation in Computer Engineering is regularly ranked the top course at the ENADE ranking by Brazil's Ministry of Education (https://comp.ita.br/noticias/2020/10/22/Enade-Eng-Comp.html)

To know more about our organization as a whole, check the following links:

• https://docs.stability.nexus/
• https://medium.com/DjedAlliance
• https://news.stability.nexus/
• https://x.com/DjedAlliance
• https://x.com/StabilityNexus
• https://linkedin.com/company/stability-nexus
• https://t.me/StabilityNexus
• https://discord.gg/YzDKeEfWtS
• https://github.com/StabilityNexus
• https://djed.one/
• https://github.com/DjedAlliance
• https://eprint.iacr.org/2021/1069
• https://hodlcoin.co.in/
• https://t.me/hodlCoinGame

[GENERAL] Requested funds in ada

100000

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

3

[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)

We will build a staking platform based on our hodlCoin protocol. This protocol creates a self-stabilizing effect through an unstaking fee that benefits long-term stakers. See https://hodlcoin.co.in.

[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 frontend will be licensed using GPL or other copyleft open-source license.

The smart contracts will be licensed using AEL (the Autonomous Entity License) or other similar license that allows the code to be inspected, modified and enhanced, requiring uses of the code to be beneficial to the singleton autonomous entity that is based on that code.

[METADATA] SDG rating

Our project contributes to sustainability because it has a stabilizing effect on the price of the tokens that are staked.

If the price of the underlying token is falling and players start to unstake to sell the underlying token, this may encourage other players to stake to benefit from the fees paid by those who are unstaking; this may reduce the selling pressure on the underlying token.

More stable token-based economies have a cascading effect on sustainability, empowering local communities to create their own tokens/currencies.

Ultimately, a staking platform brings to the hands of people some of the tools that are normally only available to central banks. These tools allow people to affect the circulating supply of their project's tokens in a responsible manner.

The entailed greater decentralization contributes to greater social resilience and sustainability.

[SOLUTION] Please describe your proposed solution

Our solution consists of a staking platform built on Cardano's sidechain Milkomeda. This staking platform will have:

1 - A staking vault creation page, where anyone will be able to create a staking vault for any token, let's say XYZ for the sake of example, permissionlessly.

2 - A vault page that, given a vault for some token XYZ, allows users to stake XYZ into the vault and later unstake XYZ from the vault.

3 - A reward distribution feature, that will allow any XYZ holder (including possibly the core team behind the XYZ project) to distribute rewards to the XYZ stakers.

When users stake XYZ, they receive a liquid accruing hodlXYZ token. When they unstake, they must pay an unstaking fee that is automatically distributed as rewards for those who continue staking.

We have proven (see: https://eprint.iacr.org/2023/1029.pdf) that the price of hodlXYZ always goes up w.r.t. the price of XYZ, and this serves as an additional incentive for users to stake.

To know more what this video:

https://www.youtube.com/watch?v=D7L7h7EOIow&t=8s

We chose to build on Cardano via Milkomeda, because it is easier to ensure that the unstaking fee gets paid also when users transfer hodlXYZ tokens.

We have already built hodlERG on Ergo and hodlALPH on Alephium. And now it is time to bring our protocol to Cardano, and for all tokens on Cardano.

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

Our hodlCoin staking platform will allow any token-based project on Cardano to create a no-code staking vault for their token.

This will allow them to reduce the circulating supply of their tokens thereby leading to greater TVLs and positive price impacts for all those projects.

[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 have already built hodlCoin for Ergo and Alephium. See https://hodlcoin.co.in . And we have already built Djed on Milkomeda. This shows that we can deliver this project. We have both the research knowledge of our own protocol and the skills needed to build on Cardano's EVM sidechain.

• Dr. Bruno Woltzenlogel Paleo (Zahnentferner) has been the Director of Engineering for IOG and has been responsible for designing Cardano's native multi-assets approach, allowing anyone to launch tokens on Cardano. The hodlCoin Staking Platform is the next logical step in his personal mission to empowering people to launch their own currencies, as it will give them the tools to manage their tokens circulating supply towards greater stability. Bruno is also a member of the original team who did the R&D for the Djed Stablecoin protocol, he is a founder of the Djed Alliance, The Stable Order and the Stability Nexus and the founder of AOSSIE, a not-for-profit charity registered in Australia dedicated to open-source software innovation and education. Throughout his career, his research and development projects have received millions of dollars from sources such as various national research agencies, Catalyst and Google.

• Luiz Vasconcelos Junior: Graduating in Computer Engineering in the Technological Institute of Aeronautics (ITA, Brazil) - class of 2024. Previous work include equity research in a Brazilian hedge fund (2021 - 2022) and responsible for Blockchain and tokenization in a Brazilian fintech unicorn (2023). In 2024, participated in the Polkadot Blockchain Academy in Hong Kong as a founder and was graduated with distinction (4 out of 35 founders). Hackathon winnings include 1st place in DeFi in Zencon 2023, XDC Network 1st place bounty in ETHDenver 2024, 1st place BNBChain hackathon in Brazil, 2022.
• https://github.com/luiz-lvj

• Bryan Diniz Borck: graduating in Computer Engineering from the Technological Institute of Aeronautics (ITA, Brazil) - class of 2024. My previous work includes equity research at one of the largest Brazilian hedge funds (2022 - 2023). I achieved a top 5 placement in the Brazilian University Mathematics Olympiad (2022). In 2024, I participated in the Polkadot Blockchain Academy in Hong Kong as a developer, focusing on Rust and Substrate. My hackathon achievements include 1st place in DeFi at Zencon 2023, 1st place in the XDC Network bounty at ETHDenver 2024, and 1st place in the BNBChain hackathon in Brazil in 2022.
• https://github.com/BryanBorck

Note: ITA is the top university for engineering in Brazil. Acceptance rate is around only 1.5% and ITA's graduation in Computer Engineering is regularly ranked the top course at the ENADE ranking by Brazil's Ministry of Education (https://comp.ita.br/noticias/2020/10/22/Enade-Eng-Comp.html)

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

Milestone Output: hodlcoin smart contracts implemented in Solidity.

Acceptance Criterion: the smart contracts should be compilable without errors.

Evidence of milestone completion: we will provide a link to the smart contracts source code to the reviewers.

Estimated length: 1 month.

Milestone Output: frontend page for interaction with a hodlcoin staking vault.

Acceptance Criterion: the frontend page should be running at least on a testnet.

Evidence of Milestone Completion: we will provide screenshots as well as a link to the frontend page that the reviewers could use.

Estimated length: 1 month.

Milestone Output: frontend page for vault creation.

Acceptance Criterion: the frontend page should be running at least on a testnet.

Evidence of Milestone Completion: we will provide screenshots as well as a link to the frontend page that the reviewers could use.

Estimated length: 1 month.

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

• Dr. Bruno Woltzenlogel Paleo - researcher, protocol engineer, inventor of the hodlCoin protocol and project manager.

• Luiz Vasconcelos Junior: smart contract software engineer.

• Bryan Diniz Borck: frontend software engineer.

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

Assumption: 1 ADA = 0.4 USD .

According to Indeed (https://www.indeed.com/career/software-engineer/salaries), the average base salary of a software engineer, excluding benefits is 22000 ADA per month. 3 engineers for 3 months would cost, on average, 3 x 3 x 22000 ADA, which is equal to 198000 ADA. We are requesting only 100000 ADA, which is the maximum amount in the concept category. All money will be used for R&D of the proof of concept.

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

As explained in the budget section, we are requesting funds to cover only about half of the R&D cost that we estimate to have with this project. The other half we will cover on our own. Therefore, this is good value for money, because Cardano will have a token staking platform for half of the price that it costs.

Furthermore, the main value provided to the Cardano ecosystem by the project can be expected to greatly surpass its development cost. This project enables people to create staking vaults and stake their tokens with a no-code platform. This increases TVL and increases prices across the Cardano ecosystem. Although this effect is difficult to quantify, it is plausible that the token price increases alone would bring more than 100000 ADA worth in value back to the Cardano community.