Smart Transaction Batching for Optimized Cardano Network Efficiency

[GENERAL] Name and surname of main applicant

Dawit Mekonnen

[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

150000

[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)

Develop a platform that efficiently bundles multiple transactions reducing fees by up to 25% and easing network congestion. This enables cost-effective microtransactions and frequent usage

[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

fully opensource

[METADATA] Horizons

Payments

[SOLUTION] Please describe your proposed solution

Problem Perception: The Cardano network, despite its robust design, faces challenges with transaction fees and network congestion, particularly affecting small-value and micro-transactions. This issue potentially limits Cardano's adoption for everyday use and hinders its ability to serve a wider range of applications.

Our Approach: tackles these challenges through an intelligent transaction batching system:

1. Efficient Aggregation: By clustering multiple transactions into a single on-chain transaction, we significantly reduce overall fees for users.
2. Network Optimization: Decreasing the number of individual transactions alleviates network congestion, enhancing overall network performance.
3. Increased Accessibility: Lower effective fees make Cardano more viable for a broader range of use cases, especially those involving frequent, small-value transactions.

Solution Details: Our platform will function as follows:

1. User-Friendly Interface: A straightforward web and mobile interface for users to submit transactions for clustering.
2. Transaction Pool: Submitted transactions are securely held for a brief, customizable period (e.g., 1-5 minutes).
3. Smart Clustering Algorithm: Our algorithm optimizes transaction grouping to maximize fee savings while ensuring timely processing.
4. Cardano Smart Contract Integration: A smart contract manages the clustered transaction, guaranteeing security and transparency.
5. Equitable Fee Distribution: The reduced total fee is fairly allocated among participating users, with potential savings up to 25% compared to individual transaction fees.

Target Audience:

• Individual users making frequent, small-value transactions
• DApp developers aiming to optimize transaction costs
• Businesses operating on Cardano, particularly those dealing with micro-transactions

Demonstrating Impact:

1. Number of clustered transactions processed
2. Average fee savings per transaction
3. Total ADA saved in fees for the Cardano community
4. Increase in small-value transaction volume on the network

Unique Value Proposition:

1. Specializing in the Cardano ecosystem
2. Offering a user-friendly interface accessible to non-technical users
3. Implementing a fair fee distribution system
4. Providing transparent, smart contract-based execution

Benefits to Cardano:

1. Enhanced Network Efficiency: Reducing individual transactions optimizes block space usage.
2. New Use Case Enablement: Lower effective fees facilitate new applications, especially in micropayments and frequent-transaction scenarios.
3. Improved User Experience: More economical network interactions encourage frequent engagement.
4. Ecosystem Growth: Decreased transaction costs should spur development of DApps relying on frequent, low-value transactions.

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

Impact on the Cardano Community:

• Reduced Transaction Costs:
• ADA TxCluster will lower effective transaction fees for users, making Cardano more accessible for everyday use.
• This will enable new use cases, particularly in microtransactions and frequent small-value transfers.
• Improved Network Efficiency:
• By batching transactions, we'll reduce network congestion and optimize block space usage.
• This will contribute to a more scalable and responsive Cardano network.
• Increased Network Activity:
• Lower fees and improved efficiency will encourage more frequent interactions with the Cardano blockchain.
• This could lead to higher adoption rates and more active wallets.
• Ecosystem Growth:
• ADA TxCluster will make it more viable for developers to build DApps that require frequent, low-cost transactions.
• This could spur innovation in areas like gaming, social media, and microservices on Cardano.
• Enhanced Competitiveness:
• By addressing transaction costs and efficiency, Cardano will be better positioned to compete with other blockchains in various use cases.

Measuring Impact:

We will track both quantitative and qualitative metrics:

Quantitative Metrics:

1. Total Number of Clustered Transactions: Tracked daily and reported monthly.
2. Average Fee Savings: Calculated as a percentage and absolute ADA value per transaction.
3. Total ADA Saved: Cumulative fee savings for all users of ADA TxCluster.
4. Network Congestion Reduction: Measured by comparing the number of on-chain transactions before and after implementation.
5. User Adoption Rate: Growth in unique wallets using ADA TxCluster over time.
6. Transaction Volume: Increase in small-value transactions (below a certain ADA threshold) on the network.

Qualitative Metrics:

1. User Satisfaction: Regular surveys to gauge user experience and perceived value.
2. Developer Feedback: Interviews with DApp developers on how ADA TxCluster impacts their projects.
3. Use Case Expansion: Documentation of new applications and services enabled by lower transaction costs.

Sharing Outputs and Opportunities:

1. Monthly Performance Reports:
2. Published on our website and shared through Cardano community channels.
3. Will include all quantitative metrics and summaries of qualitative feedback.
4. Quarterly Impact Assessments:
5. In-depth analysis of ADA TxCluster's effect on the Cardano ecosystem.
6. Will feature case studies of impactful use cases enabled by our service.
7. Open API and Documentation:
8. We'll provide comprehensive documentation and APIs to allow developers to integrate ADA TxCluster into their DApps.
9. This will be accompanied by tutorials and best practices guides.
10. Community Engagement:
11. Regular AMAs (Ask Me Anything) sessions on Cardano forums and social media.
12. Participation in Cardano meetups and conferences to present our findings and gather feedback.
13. Academic Collaboration:
14. We'll collaborate with blockchain researchers to produce academic papers on the impact of transaction batching on blockchain networks.
15. Open-Source Contributions:
16. Key components of ADA TxCluster will be open-sourced, allowing the community to audit, improve, and build upon our work.
17. Educational Content:
18. We'll create educational content explaining the benefits of transaction batching and efficient network usage.
19. This will be shared through Cardano's educational platforms and our own channels.

By implementing these measures, we ensure that the impact of ADA TxCluster is not only significant but also transparently communicated to the Cardano community. This approach will allow for continuous improvement and adaptation based on real-world data and community feedback.

[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?

Capability to Deliver:

• Technical Expertise:
• Our team consists of two highly skilled developers with 5 years of experience each: a) A web developer proficient in creating user-friendly, scalable web applications. b) A blockchain developer with deep knowledge of Cardano's architecture and smart contract platform.
• This combination allows us to create both a robust backend system and an intuitive frontend for ADA TxCluster.
• Relevant Experience:
• We have successfully delivered [mention 1-2 notable projects related to web development or blockchain] which demonstrate our ability to handle complex, user-focused applications.
• Our blockchain developer has hands-on experience with Cardano's ecosystem, including [mention specific Cardano-related work if applicable].
• Agile Development Approach:
• As a small, dedicated team, we employ Agile methodologies, ensuring rapid iteration and flexibility to adapt to challenges.
• We use tools like Jira and GitHub for project management and version control, allowing for transparent tracking of our progress.
• Community Engagement:
• Active participants in Cardano developer forums and communities, regularly contributing to technical discussions.
• We have established relationships with several key Cardano community members who can provide additional insights and support.

Approach to Feasibility Validation:

1. Phased Development:

• We will implement a phased approach, starting with a Minimum Viable Product (MVP) to validate core concepts.
• Each phase will have clear milestones and success criteria, which we will share with the community.

1. Testnet Deployment:

• Initial versions of ADA TxCluster will be deployed on Cardano's testnet for thorough testing and community feedback.
• This allows us to validate the technical feasibility and gather performance metrics in a low-risk environment.

1. Open Source Development:

• We will develop key components of ADA TxCluster as open-source, allowing for community code review and contributions.
• This approach enhances transparency and allows us to leverage the expertise of the wider Cardano developer community.

1. Community Beta Testing:

• We will invite a select group of Cardano community members to beta test the platform, providing real-world usage data and feedback.
• This will help us identify and address potential issues before full deployment.

1. Performance Benchmarking:

• We will conduct and publicly share extensive performance tests to ensure ADA TxCluster can handle expected transaction volumes.

1. Smart Contract Audit:

• We will seek support from the Cardano community to review and audit our smart contracts, ensuring they are secure and efficient.

Trust and Accountability in Fund Management:

1. Transparent Reporting:

• We will publish bi-weekly progress reports detailing our development milestones and how funds are being utilized.
• These reports will be available to the Cardano community and Catalyst voters through our project website and Cardano forums.

1. Community Oversight:

• We will establish a small community advisory board (3-5 members) that will have visibility into our development process and financial management.
• This board will include respected members of the Cardano community to provide additional accountability.

1. Open Communication Channels:

• We will maintain an open Discord channel where the community can ask questions and receive prompt responses about the project's progress and fund usage.

1. Milestone-Based Fund Release:

• We propose a milestone-based fund release system, where funds are distributed as we achieve pre-defined development goals.
• This ensures that funds are used effectively and the project progresses as planned.

1. Regular Code Reviews:

• We will conduct regular, recorded code review sessions that will be made available to the community, demonstrating the ongoing progress and quality of our work.

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

Milestone 1: Foundation and Design Budget: 35,000 ADA (23.33% of total)

A: Milestone outputs

• Comprehensive technical documentation
• UI/UX design for ADA TxCluster
• Static website for project information

B: Acceptance criteria

• Technical documentation covers system architecture, API specifications, and smart contract design
• UI/UX design includes wireframes and mockups for all key user interactions
• Static website provides project overview, team information, and development roadmap

C: Evidence of milestone completion

• Figma (or similar) file with complete UI/UX designs
• Live static website with project information

A: Milestone outputs

• Backend development for transaction clustering
• Frontend implementation based on approved designs
• Initial smart contract development for transaction batching

B: Acceptance criteria

• Backend can efficiently group transactions and calculate fee savings
• Frontend allows users to submit transactions and view clustering status
• Smart contract can receive multiple transactions and execute them as a batch

C: Evidence of milestone completion

• GitHub repository with backend code and unit tests
• Deployed frontend on a staging server with user flow demonstration
• Smart contract code with basic functionality on Cardano testnet

Milestone 3: Blockchain Integration and Deployment Budget: 45,000 ADA (30% of total)

A: Milestone outputs

• Completed smart contract development and testing
• Full integration of frontend, backend, and blockchain components
• Deployment of the platform on Cardano testnet/mainnet

B: Acceptance criteria

• Smart contract successfully batches transactions and distributes fee savings
• Platform can process end-to-end transaction clustering on the testnet/mainnet
• All components (frontend, backend, blockchain) work together seamlessly

C: Evidence of milestone completion

• Audited smart contract code deployed on Cardano testnet/mainnet
• Live demo of the platform processing real transactions
• Technical documentation updated with final architecture and deployment details

Final milestone 4: Project Finalization and Documentation Budget: 20,000 ADA (13.33% of total)

A: Milestone outputs

• Comprehensive demo video of ADA TxCluster
• Detailed documentation on development challenges and solutions
• Final project closeout report
• Final project closeout video

B: Acceptance criteria

• Demo video clearly explains and demonstrates all key features of ADA TxCluster
• Documentation provides insights into technical challenges faced and how they were overcome
• Project report includes performance metrics, user feedback, and proposed next steps

C: Evidence of milestone completion

• Published demo video on project website and YouTube
• Comprehensive project documentation available on GitHub
• Final report submitted to Catalyst and published on project website

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

1: Dawit Mekonnen - Web Developer and Project Manager

• Fullstack developer | Node.js | React | svelte | Next.js | sveltekit | Postgress | Typescript | Docker
• LinkedIn Profile: LinkedIn account
• GitHub: github account
• projects:
• Svelte faces
• Canvas Text
• Role: Responsible for web development, focusing on Web-development, UI/UX design and implementation. Dawit brings expertise in creating an intuitive and engaging user interface.

2: Eyasu Birhanu - Certified Cardano Blockchain Developer

• LinkedIn Profile: LinkedIn account
• Certified Cardano Blockchain developer and Lead Developer.
• Experienced in programming languages such as Plutus, Haskell, Lucid, Mesh, and Marlowe to build and deploy smart contracts.
• Cardano Blockchain Certified Associate (CBCA) Certificate 649c48006b7c38011005aeae
• Cardano Blockchain community builder.
• Github: github account
• Role: Eyasu is responsible for the development of Cardano Blockchain-specific functionalities.

3: Lekun Ejigu - DevOps and Backend Developer | Top Talent Freelancer

• Living to make the world a better place! Skilled in Machine Learning ,Mobile Application Development, User Experience (UX), DevOps, API Development and Backend development.
• LinkedIn Profile: LinkedIn account
• Upwork account
• Certified Backend and DevOps developer.
• Role: Lekun is responsible for the DevOps and backend development within the project. His role includes ensuring smooth deployment, and managing infrastructure.

4: Tollan S. Berhanu -| Cardano Blockchain Developer | Full-stack Web

• Linkedin: Linkedin Profile
• Github : GIthub Profile

5: Nahom Senay - Backend Developer | Software Engineering Student | Blockchain Developer

• Certified Cardano Blockchain developer
• Linkedin: linkedin profile
• Github: github account

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

Milestone 1: Foundation and Design Budget: 35,000 ADA

• Comprehensive technical documentation
• UI/UX design for ADA TxCluster
• Static website for project information

Milestone 2: 45,000 ADA

• Backend development for transaction clustering
• Frontend implementation based on approved designs
• Initial smart contract development for transaction batching

Milestone 3: Blockchain Integration and Deployment Budget: 45,000 ADA

• Completed smart contract development and testing
• Full integration of frontend, backend, and blockchain components
• Deployment of the platform on Cardano testnet/mainnet

Final milestone 4: Project Finalization and Documentation Budget: 25,000 ADA

• Comprehensive demo video of ADA TxCluster
• Detailed documentation on development challenges and solutions
• Final project closeout report
• Final project closeout video

Total: 150,000 ADA

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

This project represents exceptional value for the Cardano ecosystem, with potential impacts far outweighing the project cost:

1. Network Efficiency Enhancement: By batching multiple transactions, ADA TxCluster will significantly reduce the number of individual transactions processed on the network. This optimization could lead to improved block space utilization and reduced network congestion, benefiting all Cardano users.
2. Democratizing Transaction Access: Lower effective transaction fees will make Cardano more accessible for a wider range of use cases, particularly benefiting users in regions where even small fees can be a barrier to entry. This aligns with Cardano's mission of creating a more inclusive financial system.
3. Enabling Micro-transaction Economy: With reduced transaction costs, ADA TxCluster will unlock new possibilities for micro-transactions on Cardano. This could spur innovation in areas such as gaming, content creation, and micro-payments, potentially leading to a thriving new economic sector within the ecosystem.
4. Catalyst for DApp Development: By making frequent, small-value transactions more economical, ADA TxCluster will encourage developers to create new types of decentralized applications. This could lead to an explosion of innovative DApps in the Cardano ecosystem, driving adoption and utility.
5. User Experience Improvement: Lower fees and faster transaction processing will enhance the overall user experience on Cardano. This improved UX could be a key factor in attracting and retaining users, contributing to the network's growth.
6. Competitive Edge for Cardano: Implementing an efficient transaction batching system will strengthen Cardano's position among other blockchain platforms. This feature could be a significant selling point for enterprises and developers choosing a blockchain for their projects.
7. Community Empowerment: The open-source nature of key components will provide valuable resources for the Cardano developer community. This could spark further innovations and improvements, multiplying the project's impact.
8. Educational Value: Through our documentation and community engagement, ADA TxCluster will serve as a real-world example of scaling solutions on Cardano. This educational aspect will contribute to the overall knowledge base of the ecosystem.
9. Sustainability Boost: By optimizing transaction processing, ADA TxCluster contributes to the long-term sustainability of the Cardano network. More efficient resource use aligns with Cardano's commitment to environmental responsibility.
10. Potential for Cross-Chain Innovation: The concepts developed in ADA TxCluster could inspire similar optimizations in other blockchain ecosystems, positioning Cardano as a leader in blockchain efficiency and innovation.