Delegated Signing Network (DSN): A Partnerchain for deploying AI agents on Cardano

[GENERAL] Name and surname of main applicant

Adnan Khan

[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

85000

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

3

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

Yes

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

We propose an L2 that allows users to securely delegate signing keys to AI agents. This will unlock automated use-cases like DCA, yield farming & more - without compromising user control or security.

[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

Our project will be open source under the MIT License, ensuring transparency and community collaboration.

[METADATA] Horizons

L2

[SOLUTION] Please describe your proposed solution

The AI ecosystem is progressing rapidly, but in Web3, AI faces a major limitation: while it can assist users, it cannot securely execute on-chain transactions on their behalf. This forces users to either manually approve each transaction, which is time-consuming, or hand over full control of their signing keys, which compromises security. This limitation blocks seamless automation in use cases like dollar-cost averaging (DCA), yield farming, and portfolio management, where AI could greatly improve trader efficiency and performance.

We propose the Delegated Signing Network (DSN), a Layer 2 partnerchain built on Cardano. DSN is designed to enable secure and automated transaction execution by AI agents, allowing users to delegate signing keys for a set time period under user-defined conditions. This allows AI agents to perform on-chain tasks while ensuring full user control and security.

With DSN, users can employ AI agents for advanced automated strategies such as DCA trading, yield farming, and portfolio rebalancing without compromising security. As a partnerchain on Cardano, DSN integrates directly with the Cardano ecosystem, leveraging its security infrastructure to maintain transparency and safety.

Technical Details

• On-Chain Partnerchain Integration:
• DSN functions as a dedicated partnerchain on Cardano, providing scalable AI-driven automation. By leveraging Cardano’s infrastructure, DSN ensures that all AI-executed transactions are secure and transparent.

• Secure Delegation of Signing Keys:
• Users can delegate signing keys to AI agents under predefined conditions, such as automating DCA trading or yield farming. This delegation is time-limited and restricted by user-set parameters, such as limiting access to specific assets or pools.

• AI-Driven Automation:
• AI agents on DSN can automate various on-chain tasks, including executing DCA strategies, managing liquidity, and rebalancing portfolios. The AI operates within the restrictions set by the user, ensuring a controlled and secure process.

• Cardano-Powered Security:
• DSN utilizes Cardano’s decentralized architecture for security. This ensures that all AI-executed transactions are secure, tamper-proof, and transparent.

• Time-Limited Permissions:
• Users can specify time frames during which AI agents are allowed to act on their behalf. This ensures temporary access to signing keys, preventing any risk of misuse.

Applications and Use Cases

• Automated DCA Trading:
• DSN enables AI agents to automate DCA strategies by executing periodic trades based on predefined market conditions, removing the need for manual approvals.

• Yield Farming Management:
• AI agents can monitor and adjust yield farming positions, reinvesting rewards, adding liquidity, or exiting based on market conditions and user-defined rules.

• Portfolio Rebalancing:
• AI agents can automatically rebalance user portfolios to maintain desired asset allocations, adjusting positions based on market movements.

• Staking and Delegation Management:
• AI agents can manage staking activities, moving funds to the most profitable pools or harvesting rewards based on user preferences.

• Multi-Signature Transactions:
• DSN can integrate with multi-signature wallets, allowing AI agents to act as a signer, simplifying complex transaction approvals while maintaining security.

Why This Matters for Cardano

DSN represents a significant development for Cardano, enabling AI-driven automation in Web3. By providing a secure way for AI agents to execute on-chain tasks, DSN reduces the inefficiencies of manual transaction approvals. It unlocks the potential for advanced automation in decentralized finance (DeFi) and other blockchain applications, which can improve both efficiency and scalability.

As a partnerchain on Cardano, DSN extends the platform’s capabilities. It simplifies the integration of AI into decentralized applications (dApps), enabling users to engage with more complex, automated strategies while maintaining full control of their assets. This innovation strengthens Cardano’s role as a leader in AI-powered blockchain solutions and opens up new possibilities for user engagement and growth.

Conclusion

DSN offers a secure and efficient solution for Cardano users to automate on-chain tasks using AI agents, without compromising control. By unlocking use cases like DCA trading, yield farming, and portfolio management, DSN enables both developers and users to leverage AI in a safe, scalable, and flexible way. This integration with Cardano promotes growth in AI-driven automation, making the ecosystem more efficient and user-friendly.

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

Positive Impact on the Cardano Community

Value to the Cardano Community:

The Delegated Signing Network (DSN) will enhance the Cardano ecosystem by enabling secure, automated transaction execution through AI agents. This will unlock advanced use cases like DCA trading, yield farming, and portfolio management, boosting efficiency and user engagement on Cardano.

Measuring Impact:

• Quantitative: Track adoption metrics such as the number of integrated dApps, users utilizing AI automation, and volume of automated transactions.
• Qualitative: Gather user feedback on security, ease of use, and efficiency improvements.

Sharing Outputs:

• Reports and Documentation: Publish project outcomes and case studies through Cardano forums, GitHub, and official project channels.
• Community Updates: Share insights via social media, developer meetups, and blog posts to ensure transparency and engagement with the wider community.

The Delegated Signing Network (DSN) by SyncAI will significantly enhance Cardano’s capabilities by enabling AI-driven automation in blockchain activities. By providing a secure and programmable way for AI agents to handle on-chain transactions autonomously, DSN aims to make the Cardano ecosystem more efficient, user-friendly, and accessible to a broader audience. This innovation is set to attract developers, DeFi projects, and AI-centric use cases to Cardano, fostering greater adoption and ecosystem 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?

Our team is composed of experienced Cardano developers and community members with deep knowledge of the Cardano stack. We have collaborated with reputable teams such as IAMX, Nucast, etc. contributing to the development of multiple projects in the ecosystem. This extensive background positions us uniquely to execute this project effectively.

Steps to Ensure Trust and Accountability

1. Proven Track Record: Our prior successful implementation during the SyncAI testnet demonstrates that we can design and execute complex blockchain projects that achieve measurable results.
2. Transparent Fund Management: We will adopt industry best practices for fund management, including transparent financial reporting and milestone-based fund release, ensuring that every allocation aligns with the project's progress and objectives.
3. Community Engagement: Regular updates, community-driven feedback loops, and open discussions on our development progress will be a key part of our strategy to maintain transparency and trust within the Cardano community.
4. Security and Compliance: We will utilize Cardano’s secure infrastructure and follow strict compliance standards to manage funds and ensure all operations are secure, protecting both the community’s trust and investment.

Our commitment to maintaining high standards of trust and accountability, combined with our technical expertise and successful track record, reinforces our ability to deliver DSN efficiently and transparently for the Cardano community.

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

Milestone 1: Idea Validation and Market Study

A: Milestone Outputs

• Comprehensive Market Report: An in-depth evaluation of existing Layer 2 (L2) solutions and delegated signing key frameworks, with a focus on the integration of AI in transaction automation across blockchain ecosystems. Analysis will cover potential use cases like DCA trading, yield farming, portfolio management, and secure delegation.
• Detailed Use Case Identification: A list of high-potential use cases where DSN (Delegated Signing Network) can provide significant value, such as DeFi strategies, staking management, and automated multi-signature transactions.

B: Acceptance Criteria

• Completion of Market Report: The market analysis thoroughly covers existing frameworks in L2 and AI-automated transaction execution across chains.
• Use Case Validation: At least five high-potential use cases for DSN, demonstrating its value in enhancing efficiency and security for DeFi applications, included in the report.

C: Evidence of Milestone Completion

• Market Report: A finalized document submitted to the project repository detailing market trends, competitive analysis, and potential use cases.
• Use Case Documentation: A separate document outlining validated use cases and the potential benefits and technical requirements.

Milestone 2: Concept Development and Design

A: Milestone Outputs

• Technical Feasibility Report: A document identifying the technical requirements, challenges, and solutions for secure delegation of signing keys to AI agents on an L2 solution.
• High-Level Architectural Design: Initial architectural design of DSN, outlining key elements such as AI-agent interactions, secure key delegation, and PoC user interface drafts.

B: Acceptance Criteria

• Technical Feasibility: A confirmation of technical viability, detailing identified requirements, potential challenges, and solutions for key delegation and AI integration.
• Architectural Design: A clear, structured design that outlines key components and flows for the proof of concept (PoC).

C: Evidence of Milestone Completion

• Technical Feasibility Report: Documented evidence of technical viability, with identified requirements and proposed solutions.
• Architectural Design Document: High-level architectural diagrams and explanations, including an outline of how DSN will interact with the Cardano partnerchain and AI agents.

Milestone 3: Technical Prototyping

A: Milestone Outputs

• Technical Prototype: A functional prototype demonstrating basic DSN features, such as secure delegation of signing keys and AI-powered autonomous transactions (e.g., for a simple DCA use case).
• Sandboxed Environment Setup: A secure, isolated environment to execute automated AI transactions, demonstrating the secure execution of key-limited actions by AI agents.

B: Acceptance Criteria

• Successful Prototype Demonstration: The prototype showcases DSN's ability to securely execute delegated transactions via AI agents without user intervention.
• Stable Sandbox Operation: The sandboxed environment runs securely without critical bugs, providing a stable setting for AI-driven transaction automation for a simple use case.

C: Evidence of Milestone Completion

• Prototype Documentation: A document demonstrating the key functionalities of the prototype, including transaction logs and on-chain evidence.
• Sandboxed Environment Documentation: Detailed documentation explaining the setup and execution of secure AI-driven transactions in the sandbox environment.

Final Milestone: Project Completion and Roadmap

A: Milestone Outputs

• Final Project Completion Report: Comprehensive documentation of the entire project, including milestones achieved, lessons learned, and key performance indicators (KPIs).
• Development Roadmap: A forward-looking roadmap outlining next steps for further development, testing, and launch, including feature expansions and security enhancements.

B: Acceptance Criteria

• Complete Documentation: The final report must cover all aspects of the project, from inception to prototype completion, and include key learnings and achievements.
• Actionable Roadmap: A detailed and realistic development plan for expanding DSN, integrating additional AI functionalities, and preparing for public launch.

C: Evidence of Milestone Completion

• Final Project Closure Report: A report and video summarizing the project outcomes, milestones, and KPIs.
• Development Roadmap: A clear, actionable roadmap published on the Cardano Blockchain, outlining next steps for DSN’s full deployment.

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

Adnan Khan

https://x.com/skepticus_x

https://www.linkedin.com/in/adnan-khan-x/

Adnan has over four years of experience in the Web3 space, working as a product architect for multiple startups. He previously served as a research partner at Levitate Labs, a Web3-focused venture capital firm and accelerator. Adnan holds a degree in Data Science and Machine Learning and was a core contributor to user experience research at Fetcch, a Web3 research venture.

Coherence Labs Ltd

We are a RAK DAO-based blockchain development company headquartered in the UAE, with a team of 11+ developers specializing in web3 and AI solutions. Our team has collaborated with established projects, including Biconomy, 0g, Nillion network, NMKR, IAGON, IAMX and Nucast, contributing to the development of multiple projects across the ecosystem.

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

Budget Breakdown for the Delegated Signing Network (DSN) Project

Total Budget: 85,000 ADA

The budget is structured to ensure strategic resource allocation across all project stages, focusing on development, testing, community engagement, and project closure.

Milestone 1: Project Kickoff

Total: 10,000 ADA

• Project Manager: 5,000 ADA
• Senior Cardano Developer: 5,000 ADA

Milestone 2: Library Technical Design

Total: 25,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer x 2 : 15,000 ADA

Milestone 3: Technical Prototyping

Total: 30,000 ADA

• Project Manager: 5,000 ADA
• Senior Cardano Developer x 2: 25,000 ADA

Final Milestone: Mainnet Deployment and Project Close-out

Total: 20,000 ADA

• Project Manager: 5,000 ADA
• Senior Cardano Developer x 2 : 15,000 ADA

This concise budget ensures each phase of the DSN project is well-funded, focused on delivering high-quality outcomes, and aligned with the Cardano community's needs.

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

The Delegated Signing Network (DSN) project is a strategic investment in AI-driven automation on Cardano. The budget is carefully structured to ensure efficient execution, introducing innovative AI-powered use cases like autonomous DeFi strategies and smart contract automation, while maintaining a lean approach to avoid unnecessary expenditures.

Justification for Costs

• Industry-Standard Rates:
• Budget aligns with typical blockchain development rates, ensuring efficient use of resources without compromising quality.
• Maximizing Impact:
• Investments in code auditing and project tools ensure high security and reliability, contributing to Cardano’s technological growth.
• Lean Development Approach:
• Focuses on essential areas like development, testing, and deployment to deliver immediate value without excess costs.

By following this lean, cost-effective strategy, DSN enhances Cardano’s position in AI-driven blockchain solutions, ensuring long-term growth and innovation.