Bitcoin Runes on Cardano via Rosen Bridge

[GENERAL] Name and surname of main applicant

Rosen Bridge

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

Entity (Incorporated)

[GENERAL] Co-proposers and additional applicants

Mohammad Hasan Samadani: Lead developer for the Rosen Bridge project + SuSy Bridge (Wormhole). Holds a PhD in computer science and has over 12 years experience in security, software development, and team management. Designed various applications for the Ergo ecosystem.

Joseph Armeanio: Currently a Board Member and Manager of Business Development of the Ergo Foundation.

Subject matter experts and advisory:

Alexander Chepurnoy: Co-founder of the Ergo Blockchain and smartcontract.com (now Chainlink). One of the first employees at IOHK, as a researcher fellow and manager for the Scorex Project. Active in blockchain since 2011 and has 20+ academic papers contributed to the industry.

Daniel Friedman: Currently an advisor to the Ergo Foundation and Founder of zenGate Global. Previously, he was part of the IOHK early-founding team that helped launch the Cardano blockchain.

Sam Lambert: Co-Founder of zenGate Global. Previously, worked as a management consultant at Oliver Wyman and helped set up the Global Digital Assets practice. Worked with some of the largest banks, insurance and telecommunications companies around the world.

Theodore Morisis: Head of Operations at zenGate, Operator of the Chef Stake Pool, community educator and Cardano Ambassador. Theodore spearheaded along the onboarding of SPOs and tutorials for the Fund 10 Rosen Bridge proposal that has been fully implemented. 

[GENERAL] Requested funds in ada

350000

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

6

[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)

Rosen Bridge can enable BTC and BTC Runes transfers over to Cardano, enabling increased use of DeFi protocols, increased liquidity for Cardano and interoperability for the ecosystem.

[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

Yes

[SOLUTION] Please describe your proposed solution

Problem:

One of the pressing challenges within the cryptocurrency ecosystem is the lack of interoperability across different blockchains. For instance, Cardano holders currently lack a safe, decentralized and open-source way to natively own or interact with Bitcoin Runes. 

This limitation not only confines the utility and liquidity of these assets but also prevents Cardano users from participating in the Bitcoin market directly through their native environment. Additionally, Bitcoin and its tokens like Bitcoin Runes are restricted by Bitcoin's limited functionality (inherent in its design), limiting their use in DeFi applications. These DeFi applications are thriving on Cardano. 

Existing solutions that bridge Bitcoin with programmable blockchains often depend on centralized mechanisms, not open-source or are fraught with inefficiencies and security vulnerabilities. With the increasing number of incidents involving substantial losses due to compromised bridge technologies, the demand for a secure, decentralized solution is more critical than ever. The Rosen Bridge is already LIVE and has demonstrated it has strong and secure assumptions.

Solution:

The Rosen Bridge addresses these issues by providing a decentralized, secure, and direct pathway between Bitcoin and Cardano, specifically (for this proposal) enabling Bitcoin Runes integration. Rosen Bridge facilitates the wrapping of Bitcoin Runes onto the Cardano blockchain, thereby unlocking Cardano’s advanced DeFi capabilities for BTC and BTC Rune holders.

With Rosen Bridge, Bitcoin Runes can be seamlessly integrated into Cardano’s DeFi ecosystem, allowing BTC Rune holders to participate in various protocols previously inaccessible to them. When successful this means successful onboarding BTC ecosystem participants onto Cardano native DeFi protocols. 

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

The project team’s core goals is to connect Cardano into the liquid and well capitalized Bitcoin ecosystem. When successful, this will usher in a new wave of liquidity, project activity and collaboration with the broader Cardano ecosystem. Mainly, Rune and BTC holders leveraging the vast and wide Cardano DeFi ecosystem.

Furthermore, this opens up opportunities for Cardano holders to safely have access to Bitcoin and BTC assets (such as Runes) all natively on Cardano. 

Lastly, It will be a driver for additional revenue streams for SPOs and essentially their delegators as well. It has a positive ROI for the Cardano community as a whole.

[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?

Members of this proposal and advisory team have strong experience in the blockchain sector and have delivered (and delivering) a number of successful products for the Ergo and Cardano ecosystems.

The team already has the Rosen Bridge Live and completed all milestones for the previously funded Fund 10 challenge. See details of full completion here.

The team are strong advocates of open-source technology and have examples to show for this. As such, they will continue to leverage their experience to ensure that timelines and milestones are met.

Notable examples of project delivered by key team members include:

• Ergo Blockchain, SCOREX and smarcontract.com: Alexander Chepurnoy is the core developer for the Ergo blockchain and founded various other projects. Previously worked as a researcher for IOHK.

• ERGO mining softwares, Stratum server, and Ergopool - developed by Mohammad.

• Delivery of the Rosen Bridge between Ergo and Cardano - Bridge is Live now here - https://app.rosen.tech/. The team has started working on EVM and BTC bridging solutions. 

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

Title: Runes protocol research, preparation, and design

Milestone Outputs:

• Deep-dive investigation of Runes protocol and compatibility with current Bitcoin Rosen Bridge Designs and Architecture
• Selection of implementation method (seen outline of potential 3 options here for review)
• Bridge integration design based on the selected method
• Investigation of libraries, data sources, infrastructures, and special requirements of Runes integration

Evidence of milestone completion:

• Documentation about the selected method and its requirements on Rosen Bridge Github.
• X Space to discuss potential solutions with the community (with recording link to be provided upon submission of Milestone 1).

Title: Initial and standalone implementation of the Runes lock transaction

Milestone Outputs:

• Initial and standalone implementation of the Runes lock and transfer transaction on bitcoin
• Initial and standalone design and implementation of Ergo side contracts (if needed, for example is needed for method 1 but not required for method 2 and 3)
• Test lock transactions: Test is independent of the bridge, to ensure this type of transaction is possible, Runes can be transferred and bridging data can be transmitted/acquired.

Evidence of milestone completion:

• Sample transactions to show Runes and bridging data transfer (depending on the selected method could be one or a few transactions on Bitcoin and/or Ergo blockchains - which acts as the routing network for Cardano).

• Code snippets for Runes and bridging data transfer and fetching data from the transactions

Title: Implementation of required core modules for bridge

Milestone Outputs:

Implementation of required modules to add Runes support to Rosen bridge, including:

• Implementation of the bridge and transaction scanner
• Multisig solution for guards one BTC side
• Transaction agreement in the system (e.g if you need to index runes and working working with the limitations of Bitcoin architecture)

Evidence of milestone completion:

• All modules will be open-sourced and code available on the Rosen Bridge Github

Title: Integration of modules into Rosen watchers and guards

Milestone Outputs:

Build around Bitcoin and integrate the existing modules:

• Integration into the watcher modules (i.e scanners, event reporting, rewards and distribution)
• Integration into guard modules (i.e event verification, multi-sig, rewards and distribution)

Evidence of milestone completion:

• All modules will be open-sourced and code available on the Rosen Bridge Github

Title: UI design and integration with Rosen App (UI)

Milestone Outputs:

• Changes in UI to accommodate BTC and Rune transfers on the existing application (i.e select BTC as destination or origin chain, view transaction outputs on the Rosen explorer, etc…). 
• Bitcoin wallet Dapp connector for Runes or other approaches to enable users to sign bitcoin transaction and transfer Runes to Rosen's wallet (through Dapp connector or external wallets)

Evidence of milestone completion:

• UI codes in Rosen Github
• Screenshots of UI to be shared in a separate document submitted for this milestone.

Title: Deployment, Test and Onboarding

Milestone Outputs:

• Deployment of watchers and guards in order to test the Runes bridge integration
• Reach out to potential DeFi protocols to onboard Runes

Evidence of milestone completion:

• Watchers and guards are live in the test environment (could be mainnet or testnets)
• Example of sample transfers including all necessary transactions
• Evidence of reaching out to leading DeFi protocols to enable Runes to be integrated into their platforms.

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

Core team:

• Mohammad Hasan Samadani (Lead Developer): Lead developer for the Rosen Bridge project + SuSy Bridge (Wormhole). Holds a PhD in computer science and has over 12 years experience in security, software development, and team management. Designed various applications for the Ergo ecosystem.

• Joseph Armeanio (Project Lead): Currently a Board Member and Manager of Business Development of the Ergo Foundation.

• Core leaders are supported by a full development, project management and marketing team of around 10+ members.

Subject Matter Experts:

• Alexander Chepurnoy (Code Auditing Support): Co-founder of the Ergo Blockchain and smartcontract.com (now Chainlink). One of the first employees at IOHK, as a researcher fellow and manager for the Scorex Project. Active in blockchain since 2011 and has 20+ academic papers contributed to the industry.

• Daniel Friedman (User Onboarding and DeFi Partnering Advisor): Currently an advisor to the Ergo Foundation and Founder of zenGate Global. Previously, he was part of the IOHK early-founding team that helped launch the Cardano blockchain.

• Theodore Morisis (SPO and Watchers Coordination Advisor): Operator of the Chef Stake Pool, community educator and Cardano Ambassador. Theodore also works as a community manager for zenGate Global.

• Sam Lambert (Project Management and User Onboarding Support): Co-Founder of zenGate Global. Previously, worked as a management consultant at Oliver Wyman and helped set up the Global Digital Assets practice. Worked with some of the largest banks, insurance and telecommunications companies around the world.

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

Milestone 1: Runes protocol research, preparation, and design (50,000 ADA)

Anticipated time to finish Milestone: 4 weeks

Budget breakdown:

• 2x Researcher for Runes Research for 3 weeks
• 1x Design and Architect for 3 weeks
• 1x Developer to support with documentation for 1 week

Milestone 2: Initial and standalone implementation of the Runes lock transaction (70,000 ADA)

Anticipated time to finish Milestone: 8 weeks

Budget breakdown:

• 1x lead back-end developer - for 8 weeks
• 4x back-end developer - for 8 weeks
• 1x Project manager to support implementation plans - for 8 weeks

Milestone 3:Implementation of required core modules for bridge (70,000 ADA)

Anticipated time to finish Milestone: 8 weeks

Budget breakdown:

• 1x lead back-end developer - for 8 weeks
• 4x back-end developer - for 8 weeks
• 1x Project manager to support implementation plans - for 8 weeks

Milestone 4: Integration of modules into Rosen watchers and guards (70,000 ADA)

Anticipated time to finish Milestone: 

Budget breakdown:

• 1x lead back-end developer - for 8 weeks
• 4x back-end developer - for 8 weeks
• 1x Project manager to support implementation plans - for 8 weeks

Milestone 5: UI design and integration with Rosen App (30,000 ADA)

Anticipated time to finish Milestone: 6 weeks

Budget breakdown:

• 1x UI designer for 4 weeks
• 2x Front end developer for 4 weeks
• 1x Project manager to support implementation plans - for 6 weeks

Final Milestone 6: Deployment and Test (60,000 ADA)

Anticipated time to finish Milestone: 8 weeks

Budget breakdown:

• 1x lead back-end developer - for 8 weeks
• 3x back-end developer - for 8 weeks
• 1x Project manager to support implementation plans - for 4 weeks
• 1x Marketing and partnerships - for 8 weeks

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

The investment in Rosen Bridge represents a commitment to broadening the horizons of Cardano, enabling it to seamlessly interact with Bitcoin. This interconnectivity is crucial for several reasons:

• Increased Liquidity: By connecting with Bitcoin, Cardano native tokens gain access to a much larger pool of liquidity. This is vital for the growth of DeFi projects within the Cardano ecosystem, as it allows for more fluid and dynamic financial interactions.

• Enhanced Accessibility: The bridge reduces the barriers to entry for users and developers from other ecosystems (notably Bitcoin, the largest out there). This inclusivity fosters a more diverse and robust community, leading to innovative projects and collaborations.

• Ecosystem Growth: With greater liquidity and accessibility, the Cardano ecosystem is poised for accelerated growth. It opens up new avenues for developers, entrepreneurs, and users to explore, experiment, and create value within the Cardano framework.

• Economic Benefits for Stake Pool Operators (SPOs): The bridge provides additional revenue streams for SPOs, enhancing the overall health and stability of the Cardano network. The more ecosystems are connected to Rosen, we will see more income opportunities.This is crucial for long-term sustainability and growth.