Open Source Arbitrage Bot

[GENERAL] Name and surname of main applicant

ADA Markets

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

Entity (Not Incorporated)

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

7

[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 and open source a trading bot that anyone can run to arbitrate these opportunities to auto buy on one dex and sell on another

[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 main part of the bot will be open source so anyone can take the code and use it.

[SOLUTION] Please describe your proposed solution

Why This Approach

From building ADA Markets dex aggregator we have been tracking the liquidity across dexs on Cardano and there can be very big spreads at times so we feel building a bot where anyone in the community can take it and tweak it will help close that spread and give anyone willing to run the bot the opportunity to earn from it.

Details on the Platform 

We are building an open source arbitrage bot that anyone in the community can use to trade the many opportunities that exist due to so many dexs on Cardano. Users will be able to set what assets they want to trade and the bot will be able to monitor the selected assets and execute swaps based on the stats set by the user.

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

This bot will allow anyone in the community to run their own arbitrate bot and take advantage of the different prices on different dex. Arb bots play an important role in any ecosystem to keep the prices aligned and this will allow anyone in the community play a part in that. Other trading strategies can be build using what we produce as a framework.

[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 a dex aggregator on Cardano app.ada.markets which allows anyone who wants to trade on Cardano go to one site and we can check were they will get the best value for their trade as well as split the order for them. This proves that we have the technical ability to interact with other dApps contracts as through our aggregator we build the txs for the user with all the details about the trades they want to make and then they sign it to submit it directly to the individual dex contracts.

For tracking dex orders and liquidity pools we have already built a custom indexer for our ADA Markets platform so we can use this as the base for the arb bot while tracking swaps and pools.

Up to this point everything we produced for ADA Markets was without funding and by the team putting in their own time to the project part time. This proposal would allow some of the team to start working on ADA Markets full time which we think would take the platform to a whole new level with the features we can provide to the Cardano community.

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

Milestone outputs

• Research and create initial spec document with all steps involved and initial dexs to be supported

Acceptance criteria

• Have a spec doc completed

Evidence of milestone completion

• Completed document can be submitted

Milestone outputs

• Create market watcher to keep track of token prices across dexs

Acceptance criteria

• Market watcher running and tracking prices across all assets

Evidence of milestone completion

• Can record a video showing command line interaction with watcher

Milestone outputs

• Build out customisable arbitrage trading strategy to give recommends

Acceptance criteria

• Working arbitrage strategy giving potential profitable trade recommendations

Evidence of milestone completion

• Can record a video showing the strategy bot in action giving recommendations

Milestone outputs

• Build out transaction building and submission framework

Acceptance criteria

• Working framework of submitting swap recommendations to dexs

Evidence of milestone completion

• Access to a terminal with the bot or can record a video showing it in action

Milestone outputs

• Open bot up to beta testers
• Fix any issues from beta testers
• Publish bot code publicly on Github

Acceptance criteria

• Bot live for everyone to access

Evidence of milestone completion

• Bot live for everyone to access

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

Paddy - Principle engineer with 15 years experience in many roles in engineering and architecture. Cardano SPO since 2021 and contributor to multiple cardano projects such as poolpeek and ada.markets

• https://twitter.com/PoolShamrock

Paul - Cardano SPO since 2021 and runs a YouTube channel dedicated to education on Cardano and Cardano projects since 2021. Part of the ADA Markets Dex Aggregator team 

• https://twitter.com/cwpaulm

Dave - A full stack developer with over 15 years of experience in developing and leadership within large-scale enterprise projects. Contributor to many open source repositories on Cardano projects as well as ADA Markets

• https://twitter.com/ItsDave_ADA
• https://www.linkedin.com/in/dpbeaumont/

If we have more than 1 Catalyst proposal approved we might look to bring in more team members from the community too

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

Total Budget – 298k

Milestone Breakdown

·        Milestone 1 – 43,000 ADA

·        Milestone 2 - 70,000 ADA

·        Milestone 3 - 75,000 ADA

·        Milestone 4 - 70,000 ADA

·        Final Milestone - 40,000 ADA

Overall Cost Breakdown

·        Infrastructure:  10,000 ADA

·        Backend and Frontend Development: 213,000 ADA

·        Testing: 30,000 ADA

·        Documentation & Tutorials: 20,000 ADA

·        Project Management & Reporting: 15,000 ADA

·        Contingency for unknown and ADA price: 10,000 ADA

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

This will play a big role in keeping prices aligned across all dexs on Cardano which is important for trading as well and give the community opportunities to potentially earn off the trades if they run the bot

Once the bot is published the infrastructure will also be there for users to build their own strategies outside just arbitrage