SME RWAs Tokenization: Tapping Into a $4.5T Market for 150M+ Businesses in APAC on Cardano

[GENERAL] Name and surname of main applicant

Phani Deepak Chodisetti

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

Entity (Incorporated)

[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)

SME Tokenization Framework that enables businesses to tokenize ownership on Cardano, offering a dividend structure for token holders and unlocking global liquidity for small and medium enterprises.

[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 core components of the platform will be open-source, with smart contracts, APIs, and developer tools available under the MIT License. Community collaboration will be encouraged to foster innovation and integration.

[METADATA] Horizons

RWA

[SOLUTION] Please describe your proposed solution

The SME Tokenization Framework on Cardano enabliling small and medium enterprises (SMEs) to tokenize their equity, raise global capital, and provide automated dividend payouts. Using Cardano’s secure infrastructure, it creates liquidity pools for investment, democratizing access to capital and global markets. Launching with a pilot in Da Nang, Vietnam, with our own business.

Our business link: https://maps.app.goo.gl/TqnKC87E9SSmJLdZ9

SMEs, which account for over 90% of businesses and 50% of global employment, often struggle to raise capital due to slow, costly, and restrictive traditional funding methods. Our cardan-based framework solves this by simplifying the process, allowing SMEs to scale, engage global investors, and overcome complex regulatory barriers, unlocking greater opportunities for growth.

By tokenizing equity into regulated digital securities, SMEs can offer fractional ownership and access global liquidity through liquidity pools. Investors benefit from flexible trading and automated dividend payouts, making it a secure and efficient capital-raising tool for both businesses and investors.

Tokenization of Equity:

• SMEs convert their equity into security tokens on the Cardano blockchain.
• Fractional ownership is offered to investors, providing access to dividends and governance rights.

Automated Dividend Payouts:

• Automated calculation and distribution of dividends to token holders.
• Ensures secure and timely payouts based on equity holdings.

Global Compliant Liquidity Pools:

• Investors can buy and sell tokens through decentralized, compliance-driven liquidity pools.
• Provides liquidity for traditionally illiquid SME assets, creating a global market for equity.

Regulatory Compliance:

• Issued tokens adhere to local and international regulations such as Reg D and Reg A+.
• Ensures full legal compliance across jurisdictions for security token offerings.

Step-by-Step Process

1. Onboarding SMEs: Businesses in Da Nang, Vietnam, will be the first to use the platform. They will tokenize a portion of their equity and issue security tokens through a compliance vetting process that ensures regulatory adherence.
2. Issuing Security Tokens: Approved SMEs issue digital securities, linked to liquidity pools, making them available to global investors. Each token represents fractional ownership and rights to dividends.
3. Investor Engagement: Investors can purchase tokens through DeFi integrations, enabling seamless cross-border investments via ADA or other assets. The liquidity pools ensure flexible trading and liquidity for investors.
4. Automated Dividends:Automatically calculating payouts based on performance and distributing them to token holders in real time.
5. Secondary Market Trading: Token holders can trade tokens on secondary markets, ensuring liquidity and offering both SMEs and investors greater flexibility.

Why This is Critical for SMEs and Cardano

This framework will revolutionize how SMEs raise capital and engage with investors, especially in regions like Vietnam, where businesses need better access to global liquidity. The integration of DeFi liquidity pools offers a seamless, efficient, and scalable solution that traditional financial systems cannot match due to siloed liquidity in web2.

For Cardano, this solution showcases the power of blockchain in real-world applications, driving adoption and generating increased on-chain activity. The introduction of liquid investment pools tied to tokenized SME equity demonstrates the network’s ability to support decentralized finance and cross-border investments at scale.

This framework will significantly boost transaction volumes and ADA utility on Cardano, positioning the platform as a leader in the real-world asset tokenization space.

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

The SME Tokenization Framework will significantly benefit the Cardano community by driving the adoption of real-world asset tokenization and decentralized finance (DeFi) on the network. By enabling SMEs to raise capital and engage global investors through tokenized equity, the project will showcase Cardano’s utility, increase on-chain activity, and boost ADA demand as a transactional currency.

Measuring Impact

We will track both quantitative and qualitative metrics through the projects built on top of this framework, including:

• SMEs onboarded and capital raised using our framework.
• Transaction volume and liquidity pool activity.
• Investor participation and SME feedback on the platform’s effectiveness.

Value to Cardano

This project will highlight Cardano’s scalability and compliance capabilities, positioning it as a leader in real-world applications of blockchain. The framework will also generate demand for ADA and foster increased liquidity and community involvement.

Sharing Outputs

We will share project results through:

• Open-source tools 
• Regular updates via blogs, reports, and social media.

This will ensure the project’s success and outputs are accessible, encouraging collaboration and innovation within the Cardano ecosystem.

[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 team has extensive expertise in asset tokenization and blockchain solutions. An iterative development approach, community feedback, and partnerships with local businesses will validate feasibility and ensure project milestones are met with transparency.

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

Idea Validation and Market Research

A: Milestone Outputs

• Comprehensive Market Analysis Report: Detailed assessment of the tokenized ownership and dividend structure for small and medium enterprises (SMEs) on blockchains, focusing on Cardano’s unique advantages. This will include an overview of current SME tokenization solutions, competitors, market demand, and liquidity potential.

B: Acceptance Criteria

• Completion of Market Analysis: The report must comprehensively cover the market landscape, growth projections, and opportunities for SMEs using tokenization. It should also highlight key competitors and potential liquidity unlocked through Cardano's global reach.

C: Evidence of Milestone Completion

• Market Analysis Report: A finalized and peer-reviewed document will be submitted to the project repository, detailing findings and strategic insights.

Concept Development and Design

A: Milestone Outputs

• Technical Specifications Document: A detailed overview of the technical architecture required to tokenize SME ownership on Cardano, including dividend distribution mechanisms, compliance features, and tools.
• User Interface (UI) Mockups: Visual designs for a user-friendly platform that facilitates SME token issuance, dividend tracking, and investor engagement for both retail and institutional users.

B: Acceptance Criteria

• UI Prototype Development: A functioning prototype of the core platform UI, allowing for basic interactions and showcasing the primary functionalities for SME token issuance and dividend distribution.
• Technical Specifications Completion: A full outline of the technical requirements and technology stack with no critical omissions.

C: Evidence of Milestone Completion

• UI Prototype: A Figma link or similar with UI mockups that demonstrate the user experience for token holders and businesses.
• Technical Specifications Document: A completed and approved technical document, accessible in the project documentation repository.

Technical Feasibility and Prototyping

A: Milestone Outputs

• Prototype Demonstration: A working prototype of the tokenization platform on Cardano, showcasing essential features such as ownership token issuance, dividend distribution, and global liquidity unlocking.
• Lifecycle Management Operations: A system that effectively manages SME token lifecycles, from issuance to dividends, ensuring smooth operations without major bugs.

B: Acceptance Criteria

• Lifecycle Management Operations: Demonstration that the platform can handle full ownership lifecycle management, including dividend disbursement and liquidity tracking without critical errors.
• Successful Prototype Demo: Internal testing and stakeholder reviews confirm that all critical features work as intended, with positive feedback.

C: Evidence of Milestone Completion

• TALM System Documentation: Detailed architecture and functionality documentation for the Tokenized Asset Lifecycle Management (TALM) system.
• Prototype Demonstration Recording: A video recording or live demo session that illustrates the prototype’s working features.

Milestone Outputs

• Final Project Completion Report: Documentation of the entire project lifecycle, including key achievements, challenges, and solutions, along with performance metrics (KPIs).
• Development Roadmap: A roadmap outlining future phases of development, testing, and full-scale launch on the Cardano blockchain.

Acceptance Criteria

• Comprehensive Completion Documentation: The final report should capture all project phases and provide a clear overview of lessons learned and the achieved KPIs.
• Actionable Roadmap: The roadmap must set clear milestones for scaling the platform, optimizing for Cardano, and further testing.

Evidence of Milestone Completion

• Final Report and Video: A closure report along with a video summary, documenting the achievements, KPIs, and lessons learned.
• Development Roadmap: A detailed roadmap for future development phases, available on the Cardano blockchain for transparency

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

Phani Deepak: With over 13 years of experience, Phani Deepak has honed his expertise as a skilled brand development strategist, building and scaling successful SMEs across India, the USA, Hong Kong, Vietnam, and beyond. As the Head of Brand Development at Creme Foods, he oversees 27 stores across Andhra Pradesh, Orissa, and Telangana, playing a key role in expanding the brand's presence. He is also part of Chai Mandi, a supermarket and restaurant in San Francisco, and Baamaata, an exporter of retail food products to the USA.

His ventures extend to Sova, a restaurant in Da Nang, Vietnam, and Palate Pals Pvt Limited, an F&B consulting firm based in Hyderabad. Known for creating scalable, successful brands, Phani has a proven track record of turning innovative ideas into international businesses.

In addition to his work in the F&B sector, he has successfully onboarded CNFTs to the Web2 space, blending web3 with traditional industries, as highlighted in this tweet: https://x.com/Padierfind/status/1728796769079714194.

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

Milestone 1: Idea Validation and Market Research

Cost: 25,000 ADA

• Project Manager: 5,000 ADA
• Market Researcher: 10,000 ADA
• Data Analyst: 5,000 ADA
• Technical Writer: 5,000 ADA

Milestone 2: Concept Development and Design

Cost: 35,000 ADA

• Project Manager: 10,000 ADA
• UI/UX Designer: 10,000 ADA
• Cardano Solution Architect: 10,000 ADA
• Front-End Developer: 5,000 ADA

Milestone 3: Technical Feasibility and Prototyping

Cost: 50,000 ADA

• Project Manager: 10,000 ADA
• Cardano Solution Architect: 25,000 ADA
• Senior Fullstack Developer: 15,000 ADA

Final Milestone:

Cost: 25,000 ADA

• Project Manager: 10,000 ADA
• Cardano Solution Architect: 15,000 ADA

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

The costs of the SME Tokenization Framework are carefully calculated to ensure value for money while delivering a high-impact solution for the Cardano ecosystem. The budget reflects the industry standards for blockchain development, including competitive rates for smart contract engineering, UI/UX design, compliance, and security audits. By utilizing local talent and resources in Vietnam, where the project is piloted, we are able to maintain a lean budget, keeping costs proportional to the average wage and well below typical global rates for similar blockchain projects.

Furthermore, the project is designed to deliver long-term value through scalable infrastructure that benefits both SMEs and investors. By driving increased on-chain transactions, liquidity pool activity, and ADA utility, the framework will generate ongoing returns for the Cardano ecosystem, making the initial investment highly efficient and impactful.

This lean yet impactful approach ensures that every dollar spent contributes directly to real-world adoption and ecosystem growth, maximizing the return on investment for Cardano’s community and stakeholders.