MLabs: Pisa-Fees: Enabling Decentralized Fee Trading on Cardano

[GENERAL] Name and surname of main applicant

MLabs Ltd.

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

Entity (Incorporated)

[GENERAL] Co-proposers and additional applicants

NA

[GENERAL] Requested funds in ada

499693

[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

No

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

Pisa-Fees solves Cardano's ADA token exchange requirements by enabling decentralized fee trading, without the need to convert to ADA allowing for simple token for token conversions.

[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.”

• Plutarch: On chain validator development framework
• Atlas: Off chain application framework
• CTL: Off chain application framework
• (Custom indexer library if we use one)

[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

Our project outputs will not be open source to safeguard intellectual property, maintain commercial viability, and strategically position ourselves in the market. While we acknowledge the benefits of open-source development for fostering collaboration, certain proprietary algorithms and integration frameworks are needed to be private to preserve our competitive advantage.

[METADATA] Horizons

DeFi

[SOLUTION] Please describe your proposed solution

Problem

Pisa Fees proposed in Catalyst Funds 12 showed technical feasibility of adding non-Ada transaction fee via its demonstration of prototype features. However, with lacking toolings and technical support, it is not possible for Pisa Fees to be widely adopted across the Cardano community. 

Solution

To increase adaptation of this non-Ada fee feature, it is necessary to integrate the Pisa Fees protocol into other DApps. In order to do so, a well thought-out framework integration of Pisa Fee and an intuitive web interface that allows easy interaction with the Pisa Fees protocol is required.

Market

Pisa-Fees allows easier access of users to Cardano ecosystem as it removes requirements of users to have Ada balance to make any interactions. Current Defi protocols will be beneficial as transactions that do not involve Ada will no longer require Ada to be present in transactions. For example, users only holding AGIX will be able to interact with DEXs to exchange AGIX for LQ without adding or transferring Ada when using functionalities Pisa-Fees provide. 

Pisa-Fees also provide liquidity providers with new ways to profit and exchange their ADAasset to non-ADA assets by providing an exchange of fees as service. This solution benefits Cardano by enhancing protocol functionality, attracting liquidity providers, and promoting token utilization. 

Features

Unique features include flexible on-chain architecture, integration with off-chain frameworks, and optional protocol treasury contributions. Pisa-Fees targets users seeking efficient fee payment mechanisms and contributes to Cardano's growth.

Related work

Currently, there is no protocol or features that provides service to pay transaction fees in different tokens. Pisa-Fees will be the first of its kind to allow users to interact with Cardano ecosystem without holding any Ada.

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

With Pisa Fees APIs and off-chain framework in place, more Cardano protocols can integrate non-Ada fee features into their services. Number of protocols that support non-Ada transaction fees will be a good measure of Pisa Fees’ impact on the Cardano community. With wider adaptation of Pisa Fees, regular users of Cardano network will enjoy more protocols that require less preparation–i.e. Buying Ada– for using decentralized protocols. 

[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?

As part of Catalyst Fund12, MLabs developers have already proved technical feasibility of integrating non-Ada transaction fees to Cardano. This is showcased in the following demonstration:

https://youtu.be/vjgHzJioQrU

To ensure fund management, we have created transparent budgeting and milestone-based funding releases. Additionally, our team members have a history of responsible financial management and adhere to best practices in project governance. We are dedicated to upholding the trust of the Cardano community and delivering impactful results.

Multiple layers of testing suites and demonstrations written by our developers who have profound experiences in Cardano decentralized protocols will ensure most if not all aspects of the protocol are tested with different magnitudes of testing, such as unit tests, property tests, end-to-end tests, benchmarking, and more.

By having an external auditor review our protocol we ensure that the final product is a secure and safe environment for all users of the contract.

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

Testing Pisa Protocol

Outputs

Testing for importation/exportation logic and small-scale pseudo-transaction validation is completed. Code formatting and linting for testing code is done. Utility functions for Pisa Protocol are tested. Internal review of the on-chain codebase with optimizations is performed.

Acceptance criteria

Testing suite for importation/exportation logic. Sample transactions are aligned with expected behavior. Scripts for importation/exportation are consistent between on-chain and off-chain codebases.

Evidence of milestone completion

• report of test suite passing for utility functions, pseudo-transaction validation, and import/export logic.

Third Party Auditor

Outputs

Third party review of produced codebase to fix possible bugs or exploits and build better community trust. Bugs or exploits are identified and fixed.

Acceptance criteria

Audit reports from a reputable third-party auditor. All discovered issues are addressed.

Evidence of milestone completion

Publicly available audit reports and documented fixes for issues.

Off-chain framework integration

Outputs

A REST or WebSocket API is designed to serve Pisa Fees UTXOs. Indexer performance is benchmarked and optimized. Efficient indexer caching mechanisms, such as round-robin UTXO selection, are implemented. API tests are conducted to ensure functionality and reliability.

Acceptance criteria

The API design for serving Pisa Fees UTXOs is completed and documented. Indexer benchmarks demonstrate improved performance. Caching mechanisms, such as round-robin UTXO selection, are implemented and verified. Indexer API passes all functional tests, ensuring it returns correct and consistent results.

Evidence of milestone completion

• Benchmark Report: A simple report showing before and after indexer performance metrics, highlighting improvements.
• Test Results: A list of successfully passed tests, confirming that the API works correctly (e.g., returns UTXO data consistently).

End-to-End Test Suite

Outputs

Demonstrate Pisa fees protocol is working as intended on actual Cardano networks(or its replica network like the one provided by Plutip) by submitting sample transactions for each possible action the user can use on Pisa Fees. 

Acceptance criteria

Provide testing workflow that would automatically launch protocol, create positions, perform protocol interactions, and other actions to demonstrate that Pisa fees works as intended on actual Cardano nodes environment.

Evidence of milestone completion

• Video demonstration of testing suite, demo transaction on mainnet network

API and Off-chain platform integration

Outputs

Assure consistent results from Pisa protocol API which will provide different fee positions for users to use. 

Acceptance criteria

Chain follower correctly cache and host API to provide data for fee positions for off-chain frameworks to use. It must be tested so that a new fee position created gets correctly parsed and presented in Pisa protocol API consistently. 

Evidence of milestone completion

• Public Pisa fee API that can be used to query a list of fee positions. 

Front End Development

Outputs

A fully interactable web interface that exposes some functionalities of Fisa Fees such as opening a new fee position, discarding a fee position, changing position parameters, and querying different positions on the protocol.

Acceptance criteria

Working websites provide an easy way to query values and interact with Pisa fees without needing to manually build transactions from scratch.

Evidence of milestone completion

• Publicly available interactive website

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

MLabs

MLabs has quickly become one of the premier development firms in the Cardano Ecosystem. We are an IOG Plutus Partner and work regularly with IOG to develop the Cardano blockchain and ecosystem. Our team is composed of talented developers who have helped build community projects such as:

• Indigo
• Liqwid
• SundaeSwap
• Minswap
• Optim
• Many others

Through our work with early-stage projects, we have one of the largest groups of Haskell/Plutus developers in the community.

Website: https://mlabs.city/

Core team

Veteran Software Engineer

Seungheon Oh

Software engineer who is experienced in smart contract and tooling development on the Cardano ecosystem proficient in Haskell, Purescript, Nix, and various frameworks for dApp development. He has been contributing to a variety of projects, such as Plutarch-Liqwid-Extra and Plutrach-QuickCheck, that make using Plutarch easier, safer, and more effective. At MLabs and Liqwid Labs, Seungheon develops and maintains large-scale decentralized finance protocol, Liqwid, written entirely in Plutarch. Also under Intersect grant, he maintains and implements new features to Plutarch, the onchain smart contract domain specific language. His main interest is over smart contract development and toolchain as well as programming language design.

Github: https://github.com/seungheonoh

Liqwid: https://github.com/liqwid-labs, https://github.com/liqwid-labs/liqwid-libs

Plutarch: https://github.com/plutonomicon/plutarch-plutus

Veteran Software Engineer

Mikhail Lazarev

Mikhail is a software engineer currently focusing on web 3 technologies. He has contributed to Cardano infrastructure projects, including Plutip, Bot Plutus Interface, and Cardano documentation, as part of the Cardano Community Support Initiative. He has participated in several Catalyst projects such as Seath and Embedano, in roles including developer and manager. Additionally, he is a member of the Clarity DAO protocol development team.

GitHub: https://github.com/mikekeke

Project Delivery Manager

Jordan Hill

Seasoned Delivery Manager specializing in blockchain technology and non-EVM chains, adept at orchestrating cross-functional teams for timely and budget-conscious project deliveries. With expertise in both on-chain and off-chain development, Jordan crafts blockchain solutions that harness the potential of decentralized systems, driving innovation in the field.

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

Budget/cost breakdown:

Data Handling and Testing - 110 h

44 h - Testing code for importation and exportation logic

44 h - Testing small-scale pseudo-transaction validation

22 h - Code formatting and linting for testing code

Onchain Code Review and Testing -249 h

44 h - Internal review of on-chain codebase, make possible optimizations

44 h - Testing utility functions used in the Pisa Protocol (unit tests, property tests)

117 h - Third-party auditor

44 h - Address any issues and suggestions from external audit

Indexer and API Development - 234 h

102 h - Spec out REST or WebSocket API for serving Pisa fees UTXOs

44 h - Indexer performance benchmark/optimization

44 h - Implement efficient indexer caching (e.g., round-robin UTXO selection)

44 h - Indexer API tests

Library Integration - 242 h

66 h - Cardano Transaction Library integration

66 h - Atlas

66 h - Lucid (or successor)

44 h - Ensure consistency among different library implementations

Off-chain Testing - 176 h

44 h - Testing Pisa integration on different off-chain platforms

44 h - End-to-end tests on position creation for each framework integration

44 h - End-to-end tests on position modification for each framework integration

44 h - End-to-end tests on position termination for each framework integration

Website Development - 320 h

117 h - Building the actual website (layouts and modals)

44 h - Building an adapter for reading protocol data to be presented

29 h - Transaction integration for users providing funds

29 h - Testing user experience

29 h - Testing all actions in the web application

44 h - Automated frontend testing

28 h - Testing data validation

Subtotal: 1331 hours @110 USD/hour = $146,410 USD

Total (@ rate $0.293 USD / ADA): 499,693 ADA

**In the interest of full transparency, please note we have applied a conservative USD/ADA exchange rate in pricing this proposal. This is to ensure our operations remain stable regardless of market conditions. Although we firmly believe the future of Cardano is bright, we recognize the price of ADA and all cryptocurrencies is inherently volatile. Our financial obligations are denominated in fiat. Most importantly, this includes the salary of our engineers whose hard work makes projects like this possible. 

In the unlikely scenario of severe negative price movement beyond our forecasted rate, it is possible that MLabs may need to temporarily suspend work on this proposal until the market recovers. Rest assured, this decision would be made solely to protect our business's long-term viability and never taken lightly. 

We appreciate your understanding and support, and we are excited to see what we can achieve together.

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

The cost of the Pisa-Fees project represents excellent value due to its potential to significantly enhance protocol functionality and promote decentralized fee trading. It is justified by the complexity of developing a robust smart contract that includes extensive research, on-chain and off-chain development, testing, and audits. Our budgeting process considers industry-standard rates for blockchain development, ensuring competitive compensation for our developers involved in the project.

The value derived from increased liquidity, transaction volume, and ecosystem growth far outweighs the initial investment. Pisa-Fees project offers a cost-effective means of advancing Cardano with delivering tangible benefits to its community.