Lock'n': Cardano L1 & Hydra L2 support for bypp IoT smart hardware products (e.g. GachaGacha)

[GENERAL] Name and surname of main applicant

bypp Inc. / Osamu Takahashi

[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)

12

[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)

By integrating bypp IoT hardware with L1 and Hydra L2, we enable control via ADA and cNFTs. Our open-source SDK drives Cardano adoption among hardware developers and companies, fostering innovation.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[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.”

Some of the hardware and software that make up our smart hardware contains IP from partners with whom we have signed NDAs. These play an important role in the security of our products and are essential for a secure system linked to the blockchain.

Therefore, any parts of the project deliverables that conflict with the NDA will be kept private unless the partner company agrees otherwise in the course of the future.

[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 status of open-sourcing the deliverables of this project is outlined below:

Open Source

• Client software for Layer 1 chain Cardano
• Client software for Layer 2 chain Hydra
• Developer documentation for the above

Closed Source

• bypp IoT Solution software*
• bypp IoT Solution hardware*

*Our bypp IoT solution includes intellectual property from partner companies under NDA, which prevents certain parts from being open-sourced.

[METADATA] Horizons

IoT

[SOLUTION] Please describe your proposed solution

In this proposal, we aim to integrate Cardano's L1 and L2 control capabilities into our company's IoT smart hardware products, creating a blockchain-driven hardware control system that extends beyond internet-based operations.

In the hardware domain, real-time events such as sensor data acquisition and actuator control (e.g., motors) generate a high volume of events that need to be processed within a specified time frame. It is impractical to process each of these events directly on-chain.

This proposal envisions handling events that occur close to the hardware using Hydra L2, while processing critical transactions on Cardano L1.

This approach reduces the "low-value data ledger entries" and "overly complex transactions" on L1, while still ensuring the integrity and tamper-resistance of transaction results off-chain.

【日本語】

本提案では弊社byppのIoTスマートハードウェア製品にCardanoのL1,L2を制御する機能を追加することで、インターネットのみで完結しないブロックチェーン駆動のハードウェア制御システムを実現します。

ハードウェア領域ではセンサー値の取得、モーター等のアクチュエーター制御等でリアルタイムに多数のイベントが発生し、それを規定時間内に処理する必要があります。これらのイベントを都度オンチェーンで処理するのは非現実的です。

本提案では、ハードウェアに近い領域のイベントをHydra L2で処理し、取引として重要なイベントはCardano L1で処理する構成とします。

これによりL1に対する「価値の低いデータの台帳記載」「煩雑なトランザクション」を抑制しつつも、オフチェーンで取引の整合性、処理結果の耐改ざん性を実現します。

Attachment 1: Overview

Attachment 2: Block Diagram

Attachment 3: Sequence Diagram

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

Bringing Cardano Closer to the Real World

Through the deliverables of this project, we will enable hardware control using Cardano ADA payments and NFTs. This will make a wide range of use cases possible.

Example Use Cases

• Capsule toy machines with ADA payments
• Electronic lock control with NFTs for check-in and check-out at hotels and event venues
• Rental locker boxes for luggage at stations and tourist sites
• Paid power outlets and charging systems
• Rental bicycles with ADA payments
• Smart homes and smart cities

Reducing L1 Transaction Load with Hydra L2

In systems utilizing smart hardware, a variety of events occur rapidly, such as opening/closing electronic locks, turning lights on/off, changes in power consumption of outlets, and real-time sensor readings. Processing all of these events on the L1 chain is not feasible in terms of response speed, transaction load, and the value of the information written on-chain.

This proposal achieves the required throughput for hardware systems and reduces the L1 transaction load by processing essential transactions on Cardano L1 and handling other events with Hydra L2.

Providing Open-Source L1, L2 Client Software and Developer Documentation

The deliverables of this project include open-source software and developer documentation. These resources will encourage and accelerate the interest, engagement, and participation of other companies and individuals, especially those with expertise in hardware development, in the Cardano ecosystem.

【日本語】

Cardanoが現実空間でより身近に

本プロジェクトの成果物により、Cardano ADA決済、NFTによってハードウェア制御を行える機能が実現されます。

これにより幅広いユースケースを実現可能となります。

ユースケース例

• ADA決済のガチャガチャ
• NFTによる電子錠制御で宿泊施設やイベント会場のチェックイン、チェックアウト
• 駅、観光地で手荷物を預ける貸しロッカーBOX
• 有償の電源コンセント、充電システム
• ADA決済のレンタサイクル
• スマートホーム、スマートシティ

Hydra L2活用によるL1トランザクションの負荷軽減

電子錠のオープン/クローズ、ライトのON/OFF、コンセントの電力消費量変化、センサーのリアルタイム値….etc　このようにスマートハードウェアを用いたシステムでは多種多様なイベントが目まぐるしく発生します。これらを全てL1チェーンで処理するのは、応答速度、トランザクション負荷、オンチェーンへ書き込む情報の価値等の観点で現実的ではありません。

本提案では必要不可欠な処理はCardano L1、他はHydra L2で処理することでハードウェアシステムに要求されるスループットの確保と、L1トランザクション負荷の低減を実現します。

オープンソースL1,L2 クライアントソフトウェア、開発者ドキュメントの提供

本プロジェクトの成果物ではオープンソースなソフトウェアと、開発者ドキュメントが提供されます。本成果物は我々bypp以外のハードウェア領域の開発を得意とする企業・個人がCardanoエコシステムへの興味、関心、参加を促し加速させます。

[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 bypp hardware products are used for various controls, such as motors, electronic locks, lighting, and AC power, and have proven successful in the smart home, smart appliances, amusement, and factory sectors.

Our IoT solutions also utilize private blockchains, and we possess expertise in both blockchain and hardware technology.

The success of this project will be demonstrated by verifying that our smart hardware products work with both the Cardano Testnet and Mainnet. Please refer to the next section, Milestones, for details on the validation method.

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

Research and Development of a System Utilizing the Hydra L2 Chain

We will conduct research and development of a blockchain backend that leverages Hydra L2, which provides lower latency and higher throughput transaction processing compared to L1, to handle micro-transactions from IoT devices in real-time.

Development Items

• A mechanism to process events from smart hardware in real-time using L2.
• A system for managing L2 event logs in a tamper-resistant format.

Achievement Criteria

• Developer documentation, including the architecture and block diagrams of the developed system.
• Evaluation results of the system's real-time performance.

Development of L1 and L2 Client SDKs

We will develop Client SDKs for Cardano L1 and Hydra L2, serving as a bridge between bypp's IoT solutions and Cardano. This includes backend processing for APIs and the preparation of developer documentation.

Development Items

• Define, implement, and test the API specifications of the Cardano L1 Client SDK
• Define, implement, and test the API specifications of the Hydra L2 Client SDK
• Prepare developer documentation for the above

Achievement Criteria

• Release API specifications available as open source
• Publish developer documentation available as open source

Customization of Smart Devices and Apps

We will customize the hardware and software of bypp's smart devices to implement new features for Cardano compatibility.

Development Items

• Implement functionality to send events from smart devices to the blockchain network
• Add new features to the bypp smartphone app

Achievement Criteria

• Establish network session functions and data flow that allow events from smart devices to reach Hydra L2
• Verify backend control from the smartphone app

Testing and Launch of the Prototype Service

We will conduct operational testing, performance measurement, and tuning of the prototype service on the Cardano Testnet and Mainnet.

Development Items

• Run and conduct performance tests of the prototype service on the Cardano Testnet
• Run and conduct performance tests of the prototype service on the Cardano Mainnet

Achievement Criteria

• Confirm the successful operation of the entire system on Cardano.

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

At bypp Inc., we focus on research and development of IoT solutions primarily for homes, commercial spaces, and factories.

Our expertise lies in embedded systems, with a strong track record in developing total solutions for controlling devices such as lighting, power outlets, and electronic locks using smartphones, web interfaces, and blockchain technology.

We are also advancing research and development in hardware that is highly compatible with blockchain, with proven experience in systems utilizing private blockchains.

Project team ;

Mainly bypp employees + partners

Project Manager

• project leader, sales, pr

bypp Inc. Osamu Takahashi- Founder/Product Manager

Since 2018, he has been involved in supporting the planning and development of blockchain-based products & services.

From 2021, he has been working on research and development of products and services that increase security of hardware through blockchain functionality.

As an activity to connect IoT and blockchain, he has given technical lectures at events hosted by global semiconductor manufacturers and contributed to technical magazines.

In 2024, he released “GachaGacha,” an electronic control it that enables data protection at the industrial application level, and “Lock'n'” a smart framework for IoT devices that enables various objects to become smart devices.

Previously, he led digital communications and branding for a global goods manufacturer. He developed systems and service operations for consumer online customized e-commerce and active log collection and management services. He then went independent with a company that helped develop and deploy brands and content digitally, and participated in a US-headquartered startup of a consumer logistics service operating in two countries, the US and Japan.

Hardware Engineer

• hardware design, firmware development, mechanical design

Software Engineer

• blockchain, front-end and back-end

Architectural Engineer

• electrical work, interior, exterior, building materials processing

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

Proposal Budget & Costs TTL ₳300,000

Personnel Costs SubTTL ₳240,000

-Project Manager ₳60,000

-Hardware Engineer ₳80,000

-Software Engineer ₳80,000

-Architectural Engineer ₳20,000

Material Costs SubTTL₳30,000

-Production costs for various devices

Communication Costs SubTTL ₳10,000

-Server expenses

-Cloud service fees (AWS etc.)

Miscellaneous and Reserve Costs SubTTL ₳20,000

-Contingency funds (additional budget for unexpected events)

-Minor office supply costs (stationery, consumables, etc.)

-Licensing and software renewal fees

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

The outcomes of this project will accelerate the entry of blockchain technology into the IoT/M2M and AI sectors, which have an annual market size exceeding 1 trillion dollars. This will significantly enhance Cardano's recognition, liquidity, versatility, applicability, and value.

Additionally, the open-source components included in the deliverables will encourage technology companies without prior blockchain expertise to enter the blockchain sector, thereby accelerating the adoption of Cardano.