Custardy: 🔒 Institutional Custody & Asset Management Infrastructure on Cardano

[GENERAL] Name and surname of main applicant

Luke Baker

[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)

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)

Custardy provides an easy-to-use, secure, and cost-effective custody service with custodial wallets, feeless internal transactions, and secure withdrawals for Cardano projects via API and SDK.

[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?

No

[GENERAL] Please provide here more information on the open source status of your project outputs

The backend of Custardy will remain closed source to maintain high security and protect sensitive infrastructure. However, the developer SDK will be fully open source, allowing easy interaction with Custardy’s API. This approach balances the need for security with openness, encouraging adoption and integration while safeguarding the core system.

[METADATA] Horizons

Infrastructure

[SOLUTION] Please describe your proposed solution

How do you perceive the problem you are solving?

Custardy addresses the lack of secure, easy-to-implement custody and asset management services for projects building on Cardano. Currently, developers who wish to create a custodial wallet system face challenges such as high development costs, long implementation timelines, and significant security risks. This results in either projects choosing not to build on Cardano or deploying inadequate systems. Custardy aims to eliminate these barriers, allowing projects like centralized exchanges, web3 games, payment systems, and others to leverage secure, on-chain and off-chain asset management without developing these capabilities from scratch.

What are your reasons for approaching it in the way that you have?

Our approach is to provide Custardy as a custody and asset management platform via a REST API, a developer SDK, and a user-friendly web UI. This approach offers flexibility for developers to easily integrate Cardano custodial wallets into their applications. By leveraging hierarchical deterministic (HD) wallets and multi-signature security, Custardy delivers an institutional-grade custody solution that minimizes risk. Our SDK and API enable fast and seamless integration, reducing technical challenges for developers and allowing them to focus on delivering their core product features instead of spending time building complex custody infrastructure.

How Custardy Can Be Used

Custardy is designed to support projects needing secure management of ADA and Cardano tokens, specifically when they wish to provide custodial wallets for users. Here are some practical use cases and how Custardy works for them:

1. Web3 Games: A game can use Custardy to create custodial wallets for each player. Players may deposit ADA or tokens into their game wallet, managed securely by Custardy. The game backend can facilitate feeless, off-chain transactions between player wallets—such as transferring in-game assets or tokens—using Custardy's internal management system. When a player wishes to withdraw their tokens, Custardy handles the authorized withdrawal, maximizing the use of Cardano’s extended UTXO (eUTXO) model to maintain efficiency and security.
2. Centralized Exchanges: Custardy can be used to create and manage user custodial wallets for a centralized exchange. Each user would have a wallet that allows them to deposit ADA and tokens. Custardy securely manages all deposits, withdrawals, and internal transfers, such as between user accounts. Using multi-signature authorization, Custardy ensures that large or sensitive transfers are authorized securely, removing the burden of developing and managing secure custody solutions in-house.
3. Payment Systems: Any payment platform wishing to accept ADA can leverage Custardy for merchant and customer wallets. Custardy provides secure wallet creation for both parties and supports feeless, internal transactions for efficient payment processing. This is especially important for platforms wishing to support small-value transactions without incurring on-chain fees. Custardy also ensures that withdrawal requests are securely managed and authorized.
4. Web2 Integration: Traditional applications that want to offer Cardano blockchain integration can use Custardy to create wallets for their users without requiring deep blockchain expertise. Custardy’s SDK offers all the functions needed—wallet creation, deposit monitoring, feeless internal transfers, and secure, authorized withdrawals—enabling fast and straightforward integration into existing web2 platforms.

Custardy maximizes the utility of Cardano’s eUTXO model by allowing projects to efficiently manage multiple tokens in wallets, handle internal transactions, and batch operations where needed. With Custardy, projects can achieve the benefits of secure blockchain custody without dealing with the complexities of building and maintaining it.

Who will your project engage?

Custardy is designed for developers, entrepreneurs, and project founders building on Cardano or integrating Cardano into their existing applications. This includes centralized exchanges, web3 games, payment processors, and other web3 or traditional web2 applications seeking ADA and token integration. By lowering development barriers and providing essential custody services out of the box, Custardy attracts teams that would otherwise struggle to implement secure custody systems.

How will you demonstrate or prove your impact?

Our impact will be demonstrated through key metrics such as adoption rate, volume of funds managed securely, and the number of developers using the SDK and API. Custardy will release case studies of projects using our custody solution and publish reports on metrics like transactions handled, funds managed, and community feedback. The open-source SDK will also serve as a collaborative opportunity for developers to interact with and extend Custardy’s capabilities.

Explain what is unique about your solution, who will benefit, and why this is important to Cardano.

Custardy is unique because it combines ease of integration with institutional-grade security. By providing HD wallets, multi-signature security, and a developer-first approach through SDKs and APIs, Custardy significantly reduces the technical burden on developers needing custody services. It directly benefits projects such as exchanges, games, and applications requiring secure custodial wallet management.

This solution is important for Cardano because it lowers barriers for projects wishing to use custodial wallets, enabling them to build without investing heavily in security infrastructure. Custardy encourages more projects to innovate on Cardano, thereby increasing adoption and ecosystem growth, while maintaining the secure and decentralized values Cardano stands for.

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

Custardy will significantly benefit the Cardano community by lowering the barrier to entry for projects that require secure asset management. By providing a ready-made, institutional-grade custody solution, Custardy enables more developers and teams to build confidently on Cardano without worrying about the complexity and cost of developing secure custody systems themselves. This will help attract a broader spectrum of projects, including small teams and startups, to the Cardano ecosystem.

Custardy encourages innovation by allowing projects to focus on their core ideas and value propositions rather than spending resources on building foundational custody infrastructure. This will lead to an increase in the number and diversity of applications being built on Cardano, from games to financial platforms and beyond, enriching the ecosystem and expanding Cardano's utility.

Furthermore, Custardy's focus on security and compliance will improve trust in Cardano-based applications, both for end-users and institutional partners. This trust will accelerate mainstream adoption and bring more users into the Cardano community, as the assurance of secure asset management will make Cardano projects more attractive and reliable.

The positive impact will be demonstrated through metrics such as the number of projects using Custardy, funds securely managed, and developer engagement. Our goal is to grow the Cardano ecosystem by empowering developers with the tools they need to succeed, thereby strengthening the entire community and fostering sustainable growth.

[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 Custardy team has extensive experience in building secure backend systems for blockchain projects, including marketplaces, NFT platforms, and web3 games on Cardano. Luke, the project founder, was the founder of the first NFT marketplace on Cardano, which handled hundreds of millions of ADA in trade volume per month on a centralized NFT marketplace before smart contracts were available. This experience has given Luke a deep understanding of managing high-value transactions securely, ensuring reliability, scalability, and user trust.

The team has delivered infrastructure that ensures the reliability, scalability, and security required for handling high-value transactions, giving them a deep understanding of Cardano’s technical landscape and best practices for secure custody.

The Custardy project will implement a phased development plan with clearly defined milestones, each accompanied by testing, community feedback, and third-party audits to ensure high quality. The SDK development will be made open source to encourage transparency and community participation, and progress updates will be regularly provided.

To manage funds properly, the Custardy team will follow a detailed budget and track expenses rigorously. The use of third-party auditors to evaluate security measures further demonstrates the team's commitment to transparency, trustworthiness, and accountability in managing the provided funding.

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

Core Infrastructure Setup & User Management

1. Milestone Outputs:

• Initial platform setup, including server infrastructure (Node.js) and database schema.
• Implementation of secure user signup and organization creation in the website UI and API.
• Role management and user inviting system through the website UI and SDK.

1. Technical Aspects:

• Website UI: Development of a user-friendly interface for signing up, creating organizations, and inviting users.
• Backend API: REST API endpoints for user authentication, organization creation, and role management.
• SDK: Basic SDK integration for user signup and role assignment.

1. Acceptance Criteria:

• Users can sign up, create organizations, and invite other users with specific roles via the website UI.
• The backend API and SDK provide the necessary functions to integrate signup and organization management.

1. Evidence of Completion:

• Video walkthrough demonstrating user signup, organization creation, and role-based access via the UI.
• Documentation and sample SDK code shared in a public GitHub repository.
• Security audit report for infrastructure setup.

Pot and Wallet Management

1. Milestone Outputs:

• Implementation of pot creation and wallet creation within each pot.
• Wallet deposit address generation, available through both the website UI and API.
• Initial SDK functionality for wallet and pot management.

1. Technical Aspects:

• Website UI: Feature to create pots and wallets, with a user-friendly UI for managing different pots within an organization.
• Backend API: Endpoints for creating pots and wallets, generating deposit addresses, and managing wallet metadata.
• SDK: Functions for wallet and pot management, allowing developers to create wallets programmatically and interact with Custardy for deposit address creation.

1. Acceptance Criteria:

• Users can create pots and wallets via the UI, and SDK can be used to create pots and wallets programmatically.
• Deposit addresses can be generated and validated through the API.

1. Evidence of Completion:

• Documentation for SDK usage with detailed examples of wallet and pot creation.
• Video demonstration showing pot and wallet creation both through UI and via SDK calls.
• API documentation for deposit address generation.

Wallet Transactions & Security Policies

1. Milestone Outputs:

• Implementation of wallet-to-wallet (off-chain) transactions within Custardy, including support for SDK, API, and website UI.
• Security policy settings for pots, including manual approval for specific transactions.
• Role-based permissions for wallet interactions, available through the website UI and SDK.

1. Technical Aspects:

• Website UI: Development of transaction management UI, allowing users to initiate and monitor wallet-to-wallet transactions.
• Backend API: API endpoints for internal transactions, with configurable security policies for each pot.
• SDK: SDK functions to perform wallet transactions, check balances, and configure pot-specific security policies.
• Multi-Signature Security: Integration of multi-sig approval for all internal transactions, involving multiple key holders.

1. Acceptance Criteria:

• Users can initiate wallet transactions and configure security policies via the UI and SDK.
• Transactions require multi-signature approval as defined by pot-specific policies.

1. Evidence of Completion:

• Video walkthrough of wallet transactions using UI and SDK, including demonstrations of different security levels.
• Documentation for setting up security policies and role-based access.
• Audit report for multi-signature implementation.

On-Chain Monitoring & Automated Approvals

1. Milestone Outputs:

• Integration of on-chain monitoring to validate deposits automatically.
• Automated multi-signature approvals and basic checks for internal transactions.

1. Technical Aspects:

• Website UI: UI updates to display on-chain deposit status and transaction history for each wallet.
• Backend API: Services to monitor the Cardano blockchain using the Cardano Multiplatform Library and trigger deposit validation events.
• SDK: Functions to receive deposit updates and verify that deposits are successfully completed.
• Multi-Signature Workflow: Automation of multi-sig checks for all transactions based on preset policies.

1. Acceptance Criteria:

• On-chain deposits are automatically recognized and validated, with status updates displayed on the UI.
• Transactions undergo automated multi-signature checks.

1. Evidence of Completion:

• Video demonstration of automatic deposit validation using the UI.
• Test cases demonstrating the integration of blockchain monitoring with Custardy.
• API documentation detailing how automated approvals are triggered.

Testnet Beta & Security Audit

1. Milestone Outputs:

• Deployment of a testnet beta for projects to integrate with Custardy.
• Security audits and penetration testing by a third-party service.

1. Technical Aspects:

• Testnet Environment: Launch of a fully functional testnet environment to allow developers to test integration using the SDK and API.
• Penetration Testing: Engaging third-party security firms to conduct thorough penetration tests of the entire system.

1. Acceptance Criteria:

• Testnet beta is available, with at least one external project successfully testing integration.
• No critical vulnerabilities are found during security audits.

1. Evidence of Completion:

• Testnet beta link made available to community members for public testing.
• Penetration test and security audit report shared with stakeholders.
• Case study or testimonial from an external project testing integration on the testnet.

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

Luke Baker: Project Founder

Luke studied Cyber Security and Computer Science at university and has been working within the Cardano ecosystem for 4 years. He was the founder of the first NFT marketplace on Cardano, which handled hundreds of millions of ADA in trade volume per month before the availability of smart contracts. Luke has extensive experience building secure backend systems for blockchain projects, including NFT platforms and web3 games. He will be responsible for project design, strategy, backend development, and ensuring the security of the system.

Samuel: Frontend Designer and Developer

Samuel will handle the design and development of the website UI and work alongside Luke on SDK development. He will focus on creating an intuitive user experience for managing Custardy's features while contributing to the integration and usability of the developer tools. Samuel has experience in frontend development and design, ensuring the Custardy platform is both functional and user-friendly.

Future Team Members:

We plan to expand the team in future phases to include experts in blockchain development, security auditing, and customer support:

• Blockchain Developer: To assist with smart contract integration and advanced blockchain interactions.
• Security Auditor: To conduct thorough internal security reviews and ensure adherence to best practices.
• Customer Success Specialist: To help onboard new projects and provide support during integration.

In addition, we are working with Anastasia Labs for security consultancy and reviews. Anastasia Labs has extensive expertise in blockchain security and will be providing external security evaluations to ensure Custardy meets the highest standards of safety and reliability.

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

Development Costs (₳73,000 - $25,550 USD)

• Backend Development: ₳45,000 ($15,750 USD)
• Backend API development using Node.js and Cardano Multiplatform Library.
• Secure infrastructure for HD wallet management and multi-signature implementation.
• Time Allocation: 12 weeks.
• Frontend Development: ₳18,000 ($6,300 USD)
• Development of the website UI for user onboarding, wallet management, and analytics.
• Time Allocation: 4 weeks.
• Tooling Development (SDK - Node.js): ₳10,000 ($3,500 USD)
• Initial version of the Node.js SDK to facilitate integration for developers.
• Time Allocation: 2 weeks.

Security & Auditing (₳28,000 - $9,800 USD)

• Security Audits & Penetration Testing: ₳28,000
• Third-party audits and penetration testing to evaluate the security of the custody solution, including multi-signature transaction security.
• Time Allocation: 3 weeks of engagement with security firms to ensure robust testing and mitigation.

Infrastructure Costs (₳9,500 - $3,325 USD)

• Cloud Hosting & Servers: ₳9,500
• Infrastructure hosting for secure server deployment, including API servers, blockchain nodes, and databases.
• Time Allocation: Hosting and maintenance throughout the 12-month project duration.

Marketing & Community Engagement (₳6,500 - $2,275 USD)

• Publicity & Marketing ₳6,500
• Creating marketing materials, conducting community outreach, and engaging with Cardano developers to raise awareness of Custardy.
• Time Allocation: 2 weeks of dedicated marketing efforts to onboard projects.

Documentation & Reporting (₳8,000 - $2,800 USD)

• Developer Documentation: ₳5,000
• Writing comprehensive SDK and API documentation, including code examples and integration guides.
• Time Allocation: 1.5 weeks for preparing developer-friendly documentation.
• Project Reports & Community Updates: ₳3,000
• Creating detailed project reports and sharing progress updates with the Cardano community.
• Time Allocation: 1 week to compile progress reports and updates.

Total Funding Requested: ₳125,000 (~$43,750 USD)

This budget has been carefully planned to ensure that Custardy is developed with a focus on security, usability, and developer engagement while keeping costs in line with industry standards for blockchain development. The cost breakdown reflects the resources necessary to build, test, secure, and promote Custardy as an effective custody solution for Cardano projects.

The requested amount also represents good value for money by helping developers avoid the cost and complexity of developing custom custody solutions, leading to faster project delivery and increased ecosystem growth.

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

The cost of the Custardy project represents strong value for money for the Cardano ecosystem because it fills a critical gap in the current infrastructure. By offering a secure custody and asset management solution, Custardy allows developers to avoid the high costs and challenges associated with building these systems independently. This leads to increased innovation and lowers the barriers for projects seeking to build on Cardano, thus driving ecosystem growth.

The development costs are proportional to industry standards for blockchain-related projects. Backend development and security are the largest expenses, as they require specialized expertise in building secure custody infrastructure. By allocating appropriate resources to ensure security and scalability from the start, Custardy eliminates the need for individual projects to invest heavily in these areas, saving both time and money. The infrastructure and tooling provided will serve a variety of use cases, making it versatile and reusable for different types of projects on Cardano.

Security audits and penetration testing are critical components of our budget, as our commitment to delivering a secure, institutional-grade custody solution requires rigorous testing. Investing in security from the outset will help ensure that projects using Custardy do not face vulnerabilities that could compromise user trust or lead to costly breaches.

The infrastructure, marketing, and documentation costs are kept minimal but are crucial to ensuring the functionality, visibility, and ease of adoption of Custardy. Marketing will help onboard new projects, while documentation ensures developers can integrate Custardy effectively without additional support. By creating easy-to-use resources, Custardy encourages developers to build on Cardano, which will lead to more projects utilizing ADA and contributing to Cardano's network effects.

Overall, Custardy’s cost is an investment in making Cardano more developer-friendly by providing essential custody infrastructure as a service. This will lead to faster development times, increased security, and a higher likelihood of project success, thus contributing to the sustainable growth of the Cardano ecosystem.