Unified Open Source DEX Analytics For Cardano

[GENERAL] Name and surname of main applicant

MuesliSwap Team

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

Entity (Incorporated)

[GENERAL] Requested funds in ada

75000

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

4

[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 create and publish an open source DEX analytics tool (information about tokens, prices, trades, …), that supports all main DEX protocols

[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 project outputs will be released under the GNU General Public License (GPL).

[SOLUTION] Please describe your proposed solution

We propose developing an open-source software to analyze data from decentralized exchanges (DEXs). This tool will support all major DEX protocols and offer insights into tokens, prices, and trades. It will be based on an existing closed-source tool that we're currently using at MuesliSwap.

Problem Statement

Right now, it’s difficult to get and analyze complete data from different decentralized exchanges (DEXs) because there isn’t one tool that brings all this data together. While in theory DEX protocols are open, in practice, their internal mechanisms aren’t well understood by the community. This makes it hard for users to trust decentralized finance (DeFi), and for new developers to build upon the existing technology. It also means that a few key players in the community are becoming gatekeepers, which goes against the core ideas of Cardano.

Approach

Our goal is to make available a tool that solves the aforementioned problems by providing a single software package that can analyze DEX data easily. This tool will be open-source, allowing developers worldwide to contribute and improve it. Similar software is available for Ethereum, which has played a part in driving its adoption, and we believe having this tool will increase engagement and trust in Cardano too.

Target Audience and Impact

This tool is designed for DeFi users, developers, and researchers. It will help them make informed decisions by providing detailed market data. The success of this software will be measured by how many people use it and the community feedback we receive.

Unique Selling Point and Cardano Relevance

Our project is unique because it’s fully open-source and supports all major protocols, aligning with Cardano’s values of transparency and inclusivity. The software will not have any paid dependencies such as Blockfrost, using only the Cardano Node. It will be furthermore easy to install for the average SPO as a Dockerized container, and easy to integrate for the average developer either as a Python library or as a REST API.

Conclusion

This project will simplify how users and developers interact with DeFi markets by providing a powerful and accessible analytics tool. It aligns with Cardano’s mission to democratize finance and will strengthen the overall DeFi ecosystem through transparent data access.

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

Our project will significantly benefit the Cardano community by providing a powerful tool for accessing and analysing decentralised exchange data. This enhancement will:

1. Increase Transparency: By offering a comprehensive view of the market data on DEXs, our software helps ensure that all community members have the information they need to make informed decisions, reducing the risk of misinformation and speculation.
2. Boost Adoption: With easier access to reliable DEX data, more users may feel confident participating in DeFi activities on Cardano, potentially increasing the volume and liquidity on the network.
3. Foster Innovation: Developers and researchers will have better tools to explore DeFi trends and dynamics, encouraging more innovative applications and services built on Cardano.

Measuring Impact

To measure the impact of our project, we will use both quantitative and qualitative metrics:

• Quantitative Metrics: We will track the number of individual users and projects that deploy our open APIs, as well as the total number of API calls made by these end-users. This data will be gathered through two primary methods: a) implementing an optional telemetrics feature within the software to collect usage information, and b) analyzing statistics from open source code repositories. 
• Qualitative Feedback: We will analyze user interactions with the software by monitoring which endpoints are most frequently used and understanding the specific use cases of the community participants. This will help us measure the tool's usability and next steps in the future.

Sharing Outputs and Opportunities

The outputs from our project will be shared openly with the Cardano community through several channels:

• Open Source Repository: The software will be available as open source, allowing anyone to use, modify, and distribute it according to their needs.
• Social Media Channels: We will share information about the tool on social media platforms and on our forum, creating a space where community members can ask questions, discuss, and receive assistance with integrating the tool.

[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 MuesliSwap Team is well-known in the community and credited with delivering high-tech solutions. We started the first DEX on Cardano, months before its competition launched and to date provides the only hybrid AMM-Orderbook DEX with integrated DEX Aggregator.

In particular, MuesliSwap Team members are known to be particularly strong in developing secure smart contract based dApps, pioneering the development of DeFi protocols since the early days of SCs on Cardano. The described DEX analytics software hence falls into our area of expertise.

The Team has also already completed multiple projects funded in Catalyst among which is an off-chain governance solution used by multiple Cardano projects. As a large team of dedicated techies, we have the competence, capacity, and motivation to also complete this project in time and with high quality.

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

Milestone 1: Smart Contract Analysis

Milestone Outputs

• Comprehensive analysis of all major DEX smart contracts on Cardano, containing information about expected input and output datums, batcher implementations and possible edge case conditions.

Acceptance Criteria

• A completed report detailing the analysis of smart contracts as described above.

Evidence of Milestone Completion

• The analysis report is published and accessible to the community.
• Announcement on the MuesliSwap X page linking to the report

Milestone 2:

Code-Base Schema Optimisation and API Development

Milestone Outputs

• Refactoring and documentation of essential code from our existing closed-source system to an open-source repository (we already own closed-source code that we will open-source and use as a basis for this open-source tool)
• Expansion of support for existing DEX protocols, improvements and bug fixes based on insights gathered from the first milestone

Acceptance Criteria

• Fully functional analytics API with following features (last trades, user history, price history, DEX volume analysis)
• Improved support for existing DEX protocols with enhancements based on findings from the previous milestone (such as handling all transactions correctly without heuristics where possible)
• Documentation outlining the database schema and API endpoints

Evidence of Milestone Completion

• Link to GitHub repository containing the working codebase
• Documentation of the API/Database schema as part of the GitHub repository

Final Milestone: Deployment, Comprehensive Testing, and Advanced Feature Integration

Milestone Outputs

• Deployment scripts and performance enhancements to ensure straightforward installation and operation for most (technical) users
• Implementation of unit tests to ensure all parts of the software work correctly and reliably
• Addition of advanced analytical features, such as identifying specific transaction types such as arbitrage transactions (and/or other analytical features depending on the demand from Cardano developers)

Acceptance Criteria

• The software can be easily installed and used by the average Cardano developer
• The test cases cover all core functionality and are passing
• The new API accurately detects specific types of transactions and DEX interactions

Evidence of Milestone Completion

• Updated codebase reflecting new features and fixes in the GitHub repository
• Testing suite integration, with reports showing pass rates
• Examples on the advanced transaction analysis features, provided in the documentation

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

Team Composition:

Product Manager

• Role: Oversees project management, coordinates development efforts, ensures project alignment with goals
• Responsibilities: Manage timelines and deliverables, facilitate team communication, handles project Catalyst communication

Backend Developer 1

• Role: Develops core analytics engine, data processing pipelines, and API integration
• Responsibilities: Implement data extraction, develop backend services, optimize database schemas

Backend Developer 2

• Role: Analyses smart contracts, implements advanced features, and conducts system testing
• Responsibilities: Analyse DEX smart contracts, develop transaction analysis features, implement unit tests

DeFi Expert (to be hired)

• Skills Required: Understanding of all DeFi concepts, arbitrage transactions, advanced trading methods
• Responsibilities: Develop database queries to detect advanced trading patterns, perform analysis on the Cardano DEX data

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

Milestone 1: Smart-Contract Analysis

• Labor Costs:
• Analysis and documentation * 2 developers: 12,000 ADA
• Project management: 2,000 ADA
• Miscellaneous Costs:
• Software and servers: 1,000 ADA

Total for Milestone 1: 15,000 ADA

Milestone 2: Code-Base Schema Optimisation and API Development

• Labor Costs:
• Implementation * 2 developers: 32,000 ADA
• Project management: 5,000 ADA
• Miscellaneous Costs:
• Software and servers: 3,000 ADA

Total for Milestone 2: 40,000 ADA

Final Milestone: Feature Enhancement and System Testing

• Labor Costs:
• Implementation and testing * 2 developers: 16,000 ADA
• Project management: 2,000 ADA
• Miscellaneous Costs:
• Software and servers = 2,000 ADA

Total for Final Milestone: 20,000 ADA

These costs amount to 75,000 ADA and include the necessary buffer for unexpected problems that might arise during the development, or the addition of optional features as requested by the community in the absence of such problems.

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

We believe this DEX analytics open-source project offers significant value for money to the Cardano ecosystem. Here's how the cost of the project is justified:

1. Competitive Labor Costs: The labor rates used in the budget are based on industry standards.
2. Efficiency and Expertise: The team comprises our developers who are highly experienced with the Cardano blockchain, ensuring that the project milestones are met with expertise and efficiency.
3. Strategic Investment for Cardano: The software developed through this project directly benefits the Cardano ecosystem by improving the developer experience. Additionally, it might help in attracting external players such as blockchain analytics companies and stablecoin providers, due to a lower barrier of entry for integrating their solutions with Cardano.
4. Community and Ecosystem Growth: By improving the analytic tools available on Cardano, the project indirectly supports the growth of the Cardano community and ecosystem. Better and easy to use tools attract more developers and users.