ZK-RWA Tokenization Library: Secure and Compliant Real-World Asset Tokenization on Cardano Powered by Midnight

[GENERAL] Name and surname of main applicant

Rahul Konudula

[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)

Develop an open-source RWA tokenization library on Cardano, powered by Midnight ZKP for token issuance compliance, security, and privacy

[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 entire library, including smart contracts, SDKs, APIs, and documentation, will be released under the MIT License on GitHub. We encourage community contributions and transparency, ensuring that all components are accessible for audit, enhancement, and integration by developers worldwide.

[METADATA] Horizons

RWA

[SOLUTION] Please describe your proposed solution

The ZK-RWAs Tokenization Library solves the critical problem of securely tokenizing real-world assets (RWAs) on the Cardano blockchain, ensuring privacy and regulatory compliance. The main challenge in RWA tokenization is the need to verify asset data (e.g., ownership, compliance) without exposing sensitive information on-chain. Our library integrates Midnight and leverages Zero-Knowledge Proofs, allowing issuers to tokenize assets privately while giving investors the confidence that assets meet regulatory standards.

Problem Perception

Tokenizing RWAs on public blockchains often leads to:

• Privacy Concerns: Sensitive asset information such as ownership and legal details are exposed on-chain.
• Regulatory Compliance Challenges: Ensuring assets adhere to jurisdictional regulations while maintaining privacy.
• Trust Issues: Investors need assurance that the assets are legitimate and compliant without compromising sensitive data.

Solution Approach

The ZK-RWAs Tokenization Library uses ZKPs through Midnight to allow secure, privacy-preserving verification of asset data on-chain. Issuers can tokenize RWAs while keeping critical details hidden, and investors can trust that compliance and authenticity are verified without needing to access sensitive information.

Core Components of the ZK-RWAs Tokenization Library

ZK Proof Generation Module:

• Generates Zero-Knowledge Proofs for asset tokenization, allowing issuers to create proofs for ownership and compliance without revealing underlying data.

Midnight Compliance Layer:

• Ensures tokenized assets meet regulatory standards through private, automated compliance checks, integrated with Midnight

Asset Issuance Library:

• A Library that integrates with ZK Modules and Compliance layer to issue ZK-RWAs on Cardano

Examples of ZK Use Cases

Real Estate: ZKPs verify property ownership and legal title without exposing the owner's identity.

Commodities: ZKPs ensure that gold reserves meet quality standards while keeping storage locations and audits private.

Financial Securities: ZKPs verify bond compliance and legitimacy without disclosing full portfolio details.

Artwork: ZKPs authenticate artwork provenance without revealing owner identities or past ownership records.

Supply Chain: ZKPs ensure goods are ethically sourced and meet safety standards without exposing supplier information.

Why This Solution is Unique

The ZK-RWAs Tokenization Library stands out by combining privacy and regulatory compliance through the integration of Midnight and Zero-Knowledge Proofs. Traditional tokenization solutions often compromise on privacy or compliance, but our library balances both by:

• Protecting Sensitive Data: Issuers can tokenize assets without exposing critical information, providing privacy and security for all stakeholders.
• Simplifying Compliance: Built-in automated compliance checks ensure regulatory standards are met without revealing data on-chain.
• Flexible and Scalable: Adaptable to different asset classes and regulatory environments, ensuring wide application across sectors.

To keep the scope of this proposal realistic, we will start with commodity support for granite, leveraging our previous experience in tokenizing the GRNT token [https://app.finest.investments/assets/materials/66b75505685877ae05a27d07].

Why This Matters to Cardano

This solution is critical for expanding Cardano’s use cases and adoption in real-world asset tokenization by:

• Enhancing Privacy Features: By integrating ZKPs and Midnight, Cardano becomes a more attractive platform for sectors requiring privacy and compliance, such as real estate, finance, and commodities.
• Institutional Engagement: Solving privacy and compliance issues will drive institutional participation, as organizations can confidently tokenize assets without regulatory or privacy concerns.
• Expanding Ecosystem Use Cases: The ability to securely tokenize RWAs opens new doors for Cardano’s growth, positioning it as a leader in blockchain-based asset tokenization.

Conclusion

The ZK-RWAs Tokenization Library revolutionizes how real-world assets are tokenized on Cardano by integrating Zero-Knowledge Proofs and Midnight for privacy and compliance. This approach solves the key challenges of privacy, security, and regulatory hurdles, making Cardano the ideal platform for tokenizing real-world assets at scale while maintaining trust and transparency.

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

The ZK-RWAs Tokenization Library will have a transformative impact on the Cardano ecosystem by enabling secure and compliant tokenization of real-world assets (RWAs) through privacy-preserving solutions. This addresses key issues around privacy, regulatory compliance, and trust, positioning Cardano as a leader in blockchain-based asset tokenization.

Key Impacts:

1. Increased Adoption of Cardano for Institutional Use: By providing a privacy-first tokenization solution, the library will attract institutional players looking to tokenize assets such as real estate, commodities, and financial securities while meeting regulatory standards.
2. Enhanced Privacy and Compliance Features: Integrating Zero-Knowledge Proofs (ZKP) and Midnight will enhance Cardano’s appeal to industries that require privacy, fostering trust and regulatory adherence across sectors.
3. New Use Cases for Cardano: Expanding the ecosystem to include RWAs tokenization opens up sectors like finance, real estate, and supply chain management to Cardano, driving broader adoption and innovation.

Measuring Impact:

• Quantitative Metrics:
• Number of assets tokenized using the library
• Increase in institutional participants on Cardano
• Growth in Cardano’s transaction volume and value of tokenized assets
• Qualitative Metrics:
• Industry feedback on privacy and compliance features
• Increased trust from investors and issuers in tokenization processes
• Partnerships formed with institutional players and asset issuers

Sharing Outputs: We will share results through:

• Open-source Release: The ZK-RWAs Tokenization Library will be made available to the broader Cardano community via GitHub, allowing developers to integrate and extend the solution.
• Community Outreach: Reports on tokenization volumes and use case studies will be published, shared through Cardano forums, newsletters, and presentations at ecosystem events.
• Partnerships: Collaborating with Cardano-focused projects and institutional partners to integrate and scale the library across different sectors.

By delivering a secure, compliant, and scalable solution, the ZK-RWAs Tokenization Library will unlock new opportunities for Cardano, driving adoption and expanding its reach into real-world asset markets.

[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?

Team and Expertise

Our team consists of seasoned blockchain and financial services professionals with a proven track record of delivering top-tier Cardano solutions. With over 30 years of combined experience, we ensure transparency, accountability, and high-quality execution that the Cardano community expects.

Development Team

Our skilled development team focuses on building enterprise-grade blockchain solutions for Cardano. They have successfully led multiple Cardano-based projects and specialize in developing scalable, secure dApps tailored to the ecosystem.

Core Competencies

• Enterprise Blockchain Solutions: Expertise in creating decentralized, secure infrastructure for governments and corporations.
• Real-World Asset Tokenization: Specializing in converting physical assets like commodities and real estate into blockchain tokens, enhancing market liquidity.
• Zero Knowledge Proofs (ZKPs): Developing privacy-focused solutions for secure data handling in government and enterprise use cases.
• AI and Blockchain Integration: Leading AI innovations that boost enterprise operations when integrated with blockchain technologies.

Key Projects

• Government Forensics: Partnered with the Indian state of Uttar Pradesh to build a ZKP-powered forensic system on Cardano, ensuring secure and tamper-proof data management.
• Granite Market Tokenization: Transforming India's $2.89 billion granite market by creating the GRNT-1 token on Cardano using Finest, boosting transparency and liquidity in natural resource investments.

Strategic Partnerships

We have established strong collaborations with industry giants and fund managers, including:

• Navayuga, Intercontinental Infra, Godavari Project, NCD, and Navayuga Engineering, focusing on proof-of-concept initiatives for Real-World Asset (RWA) tokenization on Cardano.

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

 Project Kickoff

A. Milestone Outputs

1. Project Initiation Report:

• Analysis of existing tokenization libraries and their applicability to Cardano’s ecosystem.
• Review of current compliance frameworks and their integration capabilities with zero-knowledge proof (ZKP) technologies.

B. Acceptance Criteria

1. Completion of Initiation Report:

• The report provides an in-depth understanding of the RWA tokenization needs within the Cardano ecosystem.
• Includes a comparative study highlighting the unique advantages of integrating ZKP-based compliance with Cardano’s native token standards.
• Clearly identifies the project's scope, objectives, and potential impact on the adoption of RWA tokenization by financial institutions and developers.

C. Evidence of Milestone Completion

1. Initiation Report:

• A finalized and comprehensive document submitted to the project repository.
• Presentation of key findings to stakeholders for approval.

Library Technical Design

A. Milestone Outputs

Technical Feasibility Report:

• Detailed outline of the technical requirements for developing the RWA tokenization library.
• Identification of necessary APIs, data flows, and integration points with financial platforms and exchanges.
• Potential challenges in ensuring compliance, security, and interoperability, along with proposed solutions leveraging Midnight ZK’s ZKP.

High-Level Architectural Design:

• Comprehensive architecture diagram of the tokenization library, illustrating modules such as Standardized Token Templates, Metadata Management, Compliance Integration, Security and Privacy, Interoperability, and User-Friendly Tools.
• Specifications for scalability, security, and compatibility with various financial systems and regulatory frameworks.

B. Acceptance Criteria

Technical Feasibility Confirmation:

• Validation that the library can technically meet the tokenization and compliance requirements of major financial institutions.
• Clear identification of all technical dependencies and mitigation strategies for potential challenges.

Architectural Design:

• The architectural design adequately supports the development of a robust and scalable tokenization library.
• Ensures that the design aligns with Cardano’s security and trustless principles, as well as regulatory compliance standards.

C. Evidence of Milestone Completion

Technical Feasibility Report:

• A detailed report submitted and reviewed by the technical team, confirming feasibility.

Architectural Design Document:

• A finalized architecture document available in the project repository.

Technical Prototyping

A. Milestone Outputs

Tokenization Library Prototype:

• A functional prototype of the RWA tokenization library demonstrating key features such as:
• Standardized Token Templates: Simplified token creation for various asset classes like gold, real estate, and collectibles.
• Metadata Management: Handling asset metadata, including provenance, valuation, and legal documentation.
• Compliance Integration: Implementation of ZKP-based checks and regulatory reporting.
• Security and Privacy: Ensuring data integrity and ownership validation without exposing sensitive information.
• Interoperability: APIs for seamless integration with financial platforms and exchanges.
• User-Friendly Tools: Dashboards and developer tools for managing and monitoring tokenized assets.

Sandboxed Testing Environment:

• A secure environment configured to test the library’s tokenization and compliance capabilities.
• Simulation of asset tokenization processes with dummy data to validate functionality, security, and regulatory compliance.

B. Acceptance Criteria

Successful Prototype Demonstration:

• The prototype effectively showcases essential functionalities, including seamless tokenization of various assets and robust compliance integration using ZKP.
• Demonstrates the ease of use of the library’s tools and interfaces for developers and financial institutions.

Stable Sandboxed Testing:

• The sandbox operates reliably without critical bugs or security vulnerabilities.
• Successfully executes test scenarios replicating real-world asset tokenization and compliance processes.

C. Evidence of Milestone Completion

Prototype Documentation:

• Comprehensive documentation detailing the prototype’s capabilities, usage instructions, and technical specifications.

Sandboxed Testing Documentation:

• Detailed records of the testing processes, scenarios executed, and outcomes achieved within the sandbox.

Final Milestone: 

A. Milestone Outputs

Final Project Completion and Closure Report:

• Comprehensive documentation covering all project phases, from inception to mainnet deployment.
• Summary of key achievements, lessons learned, and evaluation against initial KPIs.

Mainnet Deployment:

• Full deployment of the RWA tokenization library on the Cardano mainnet.
• Deployment guidelines and best practices for financial institutions and developers to adopt the library seamlessly

B. Acceptance Criteria

Comprehensive Documentation:

• The closure report thoroughly details the project’s technical achievements, strategic insights, and overall impact.
• Includes an evaluation of project success against predefined KPIs and objectives.

Mainnet Deployment:

• The library is fully functional and accessible on the Cardano mainnet.
• Clear and detailed usage guidelines are available for financial institutions and developers to facilitate adoption.

C. Evidence of Milestone Completion

Final Project Closure Report and Presentation:

• A detailed report submitted to the project repository, accompanied by a video presentation summarizing project outcomes, KPIs, and key achievements.

Mainnet Deployment Documentation:

• Developer and user guidelines available in Markdown format on GitHub, ensuring easy access and usability for financial institutions and developers.

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

Rahul Konudula, CEO - Trivolve

He has founded companies across real estate, international commodities, and mineral mining that have been running successfully for more than a decade with 8 figure annual revenue in USD. He has over eight years of experience in the RWA sector, focusing on bringing innovative solutions by integrating AI and Blockchain and consistently being one of the leading contributors to industry advancements in South India.

Trivolve Tech 

We are a prominent AI and Blockchain development studio based in Dubai and India, specializing in creating innovative solutions for the Asia-Pacific region. With a dedicated team of 31 professionals, we have been serving over 20 enterprise clients, including governments, venture capital firms, and Fortune 500 companies, for more than three years. Our expertise extends to consulting for leading Cardano projects, leveraging our extensive experience in product development.

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

Milestone 1: Project Kickoff

Total: 30,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer: 20,000 ADA

Milestone 2: Library Technical Design

Total: 45,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer x 2 : 35,000 ADA

Milestone 3: Technical Prototyping

Total: 40,000 ADA

• Project Manager: 10,000 ADA
• Senior Cardano Developer x 2: 30,000 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

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

The proposed 135,000 ADA investment will deliver a comprehensive, open-source RWA tokenization library that significantly enhances Cardano’s ecosystem. By enabling secure, compliant, and privacy-preserving tokenization of real-world assets, the project facilitates increased liquidity, attracts institutional investors, and drives broader adoption of Cardano’s blockchain technology. Leveraging Midnight ZK’s advanced zero-knowledge proof solutions ensures regulatory compliance and user privacy, reducing potential legal risks and fostering trust within the community. The open-source nature promotes community collaboration and continuous improvement, maximizing long-term value and sustainability. Additionally, the integration of developer tools and comprehensive documentation lowers the barrier to entry for new projects, expanding Cardano’s use cases and reinforcing its position as a leading blockchain platform. This investment not only supports immediate project goals but also contributes to the long-term growth and diversification of the Cardano network.

We utilize a lean development methodology, emphasizing the prioritization of development and enhancements based on feedback from partners, the community, and users, which ensures efficient and cost-effective use of resources. Our strategic employment of a geographically diverse team spanning the US, Singapore, and India allows us to optimize development costs while upholding high quality and efficiency standards.

This method, along with our dedication to transparency and strategic financial planning, guarantees that the proposal delivers great value for money.