MVP for a Restaking Platfor on Cardano

[GENERAL] Name and surname of main applicant

Three Sigma

[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)

8

[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)

Develop a scalable, secure Cardano platform for automated restaking of rewards to compound ADA stakeholder earnings.

[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

All our outputs will be open source, including on and off chain components

[METADATA] SDG rating

SDG Goals

8 - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

9 - Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

[SOLUTION] Please describe your proposed solution

The proposed solution is a Delegated Staking Pool that compounds rewards into the Staking Pool itself. The Stakers that delegate assets to the Delegated Staking Pool will be able to take advantage of compounding rewards within the network, effectively maximizing the rewards these Delegated Staking Pools generate.

The solution requires the team to run and maintain Cardano Nodes at all times, which requires expertise in Infrastructure & DevOps, as well as Server Administration skills. On top of that, there has to be an automation that compounds rewards in the moment they are awarded to the node in order to achieve the compounding functionality.

With this solution users will be able to stake their ADA and have their rewards automatically added back to the pool without the need to collect the rewards and actively stake them back into the pool. This means that users only have to worry about staking and removing their stake from the delegated pool, ensuring that they maximized their yield without having to interact with the protocol.

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

Implementing a restaking platform on Cardano can significantly benefit its community and ecosystem. Restaking boosts the utility and productivity of staked assets, which are otherwise dormant, by enabling them to earn additional rewards. This increased activity not only enhances the individual returns for token holders but also bolsters the overall security of the network. 

By engaging more tokens in the consensus process through restaking, Cardano can achieve greater decentralization and resilience against attacks, aligning with the Proof of Stake mechanism's security principles. Moreover, restaking can attract more participants to the ecosystem, fostering a more vibrant and engaged community, which is essential for the network’s growth and sustainability. 

This approach could also set a precedent for innovation within the Cardano network, encouraging the development of new financial products and services based on restaked assets.

[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?

Three Sigma has an extensive track record in all stages of development for web3 projects. From the ideation and conceptualization stage to the development stage, Three Sigma has shown vast capabilities to implement projects inside the proposed scope and complexity with a team that ranges from economic modelers to software engineers, encompassing all the different skill sets needed to deliver.

Three Sigma has developed vast infrastructure for protocols and blockchains, such as leveraging zkSync’s native AA to allow users to connect their Web2 identity to their Web3 wallets (link), optimizing key economic parameters for Uniswap V3 Options Protocols, minimizing liquidation risk for multi-collateral positions on Yeti Finance in Avalanche (link) as well as aiding with development and auditing for a Staking Pool Protocol for Avax Validators (Glacier Pool).

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

This milestone will include onboarding to Catalyst, 

Milestone output(s) July, 2024

• Kickstart the project with the Catalyst onboarding
• Appointing a project lead, commencing execution.
• Comprehensive project roadmap established.

Acceptance criteria 

• Timely setup of project infrastructure on Catalyst
• Correct assignment of team roles
• Approval of the project roadmap.

Milestone output(s) Q3 2024

• Unveil the MVP design
• Demonstrating the restaking mechanism on Cardano
• Compare Cardano restaking with other ecosystems like Ethereum.

Acceptance criteria 

• The MVP design must clearly articulate the functionality and benefits of restaking on Cardano

Milestone output(s) Q4 2024

• Deliver the MVP design on Figma
• Deliver a non-functional prototype to demonstrate the user interface and interactions.

Acceptance criteria 

• Successful demonstration of the UI/UX as per the Figma prototype, with key focus on user engagement and ease of navigation.

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Milestone output(s) Q1 2025

• Finalize the development, thorough testing, of the operational MVP
• Finalize the MVP documentation

Acceptance criteria 

• The final MVP must meet all specified functional requirements, pass all integration and performance tests
• The final MVP must have comprehensive documentation that facilitates easy deployment and maintenance

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

CEO at Three Sigma

Eduardo Morgado

https://www.linkedin.com/in/eduardobmorgado/

Eduardo Morgado has a BSc in Computer Science in Instituto Superior Tecnico. He has experience in Cybersecurity & Development, as well as vast expertise in the web3 industry. In early 2022 Eduardo co-founded Three Sigma, a Web3 consulting firm that focuses on Web3 security, development and economic modelling.

CTO at Three Sigma

Afonso Oliveira

Afonso holds an MSc in Computer Science from Instituto Superior Técnico, majoring in Distributed Systems and Cybersecurity. During his college years he worked on the development of a domain-specific language for smart contract programming, gathering valuable insights on the technicalities of the industry. Afonso started investing in blockchain in 2016 and is well versed in blockchain’s consensus mechanisms with notable research in the area of randomised asynchronous BFT consensus.

Tech Lead at Three Sigma

Simão Amaro

Simão is a highly accomplished individual with a Master's degree in Aerospace Engineering from the prestigious Instituto Superior Técnico who brings a unique skill set to the blockchain industry. Aerospace engineering graduates, like Simão, possess strong analytical thinking, problem-solving, and attention-to-detail skills, enabling him to approach projects with a meticulous and systematic approach. Simão's passion for software development, security, coding tools, infrastructure, and blockchain led him to join Three Sigma. His expertise in conducting code audits and uncovering critical vulnerabilities quickly earned him a leadership role in the code auditing team, where he continuously enhances software security and reliability. 

Smart Contract & Fullstack Engineer at Three Sigma

João Lopes

João is a Solidity Developer and Code Auditor with a Master's degree in Aerospace Engineering from Instituto Superior Técnico. With an insatiable thirst for knowledge and a passion for cutting-edge technologies, he constantly seeks out new frontiers with immense potential for innovation. 

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

We have divided the annual budget into 4 payments based on the 4 milestones and closing report. The total amount will be 260,000 ADA.

Milestone 1 - 52,000 ADA (20%)

• Personnel: 36,400 (70% of 52,000)
• Development Tools and Services: 7,800 (15% of 52,000)
• Marketing and Outreach: 5,200 (10% of 52,000)
• Contingency Fund: 2,600 (5% of 52,000)

Milestone 2 - 52,000 ADA (20%)

• Personnel: 36,400 (70% of 52,000)
• Development Tools and Services: 7,800 (15% of 52,000)
• Marketing and Outreach: 5,200 (10% of 52,000)
• Contingency Fund: 2,600 (5% of 52,000)% 

Milestone 3 - 78,000 ADA (30%)

• Personnel: 54,600 (70% of 78,000)
• Development Tools and Services: 11,700 (15% of 78,000)
• Marketing and Outreach: 7,800 (10% of 78,000)
• Contingency Fund: 3,900 (5% of 78,000)

Milestone 4 - 78,000 ADA (30%)

• Personnel: 54,600 (70% of 78,000)
• Development Tools and Services: 11,700 (15% of 78,000)
• Marketing and Outreach: 7,800 (10% of 78,000)
• Contingency Fund: 3,900 (5% of 78,000)

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

Implementing a restaking platform on Cardano can provide substantial value to the Cardano ecosystem in several ways:

1. Enhanced Token Utilization: By enabling restaking, idle staked assets can be mobilized to earn additional rewards. This improves the overall utility and productivity of assets within the ecosystem, making the investment in Cardano more attractive to current and potential token holders.
2. Increased Network Security: Restaking can contribute to greater decentralization and security. As more tokens are actively involved in the consensus process, the network becomes more resilient against attacks. This strengthens the integrity and trustworthiness of the Cardano blockchain, aligning with the Proof of Stake mechanism’s principles.
3. Attracting New Participants: The opportunity to earn additional rewards through restaking can attract more users and investors to the Cardano ecosystem. This increase in participation not only grows the community but also enhances the liquidity and vibrancy of the network.
4. Promoting Innovation and Development: The restaking platform can spur innovation within the Cardano ecosystem. By providing new ways to utilize staked assets, it can encourage the development of new financial products and services. This innovation can lead to increased economic activity and opportunities within the ecosystem, further enhancing the value of Cardano.
5. Long-term Sustainability: The introduction of restaking can contribute to the long-term sustainability of the Cardano network by fostering a more engaged and committed community. This community engagement is crucial for ongoing development, governance, and adaptation of the network to future needs.

Overall, the cost of implementing a restaking project on Cardano represents an investment into the ecosystem's growth, security, and innovation potential, creating a more robust and dynamic environment for all participants.