Legal Framework

[GENERAL] Name and surname of main applicant

Edgar Esteban Cruz Ponce

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

Individual

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

8

[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)

Develop an integral legal framework to help governments and legislators create solid regulations for blockchain, DeFi, and crypto-assets, based on legal principles and international best practices.

[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 project will be completely open source

[METADATA] Horizons

Legal

[SOLUTION] Please describe your proposed solution

Our proposal is to develop an integral and practical legal framework that serves as a reference for governments and regulatory bodies in creating regulations tailored to blockchain, crypto-assets, and decentralized finance (DeFi). This framework aims to address the lack of legal clarity that currently hinders the growth of these technologies in South America, facilitating a stable regulatory environment that promotes both innovation and the protection of actors within the financial ecosystem.

The development of the legal framework will be structured through a methodical process that includes the following steps:

1. Comparative Research on Existing Legislation: A comprehensive analysis of international regulations that currently govern blockchain and crypto-assets will be conducted. Landmark cases like the Bitcoin Law of El Salvador and other pioneering regulations will serve as a basis to identify successes and areas for improvement. This phase will provide a clear overview of best practices applied in different jurisdictions. Additionally, we will leverage the local example of Ecuador, where data control regulations and their connection to the financial sector are taking their first steps.
2. Legal Analysis of Blockchain Technology: This step will involve a detailed evaluation of the technical principles that underpin blockchain, such as decentralization, smart contracts, and distributed consensus mechanisms, in relation to existing legal frameworks. We will identify regulatory gaps and opportunities to update or create new laws that align with these technological innovations.
3. Legal Evaluation of Decentralization, Cryptocurrencies, and DeFi: The legal challenges posed by decentralized finance and cryptocurrencies, such as their impact on financial sovereignty, consumer protection, and the integrity of the financial market, will be analyzed. This stage will prioritize issues like anti-money laundering measures, user security, and the mitigation of systemic risks.
4. Global Reality Analysis of Legislative Updates: We will study how different countries are responding to the mass adoption of blockchain and decentralized finance, identifying global trends and compiling best regulatory practices. This will include an analysis of successful legislative approaches, with a view to adapting them to South American legal frameworks.
5. Establishing Criteria for the Creation of a Legal Framework: Based on the previous analyses, we will develop a set of key principles to guide legislators and regulators. These principles will include recommendations on consumer protection regulations, legal security in transactions, and the prevention of illicit activities related to crypto-assets and DeFi.
6. Development of a Final Legal Framework: The final result will be a flexible legal framework, tailored to the specific needs of each country, that promotes the responsible and secure adoption of blockchain and DeFi. This framework will foster technological innovation and economic growth while ensuring financial system stability and protection.

This project will provide governments with clear and applicable tools to regulate these emerging technologies, strengthening their governance capacity and creating a more robust and secure ecosystem for investments in blockchain and crypto-assets. Therefore, we are requesting funds and resources to carry out the necessary research, development, and consultation for the creation of this comprehensive regulatory framework.

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

The success of this project will bring significant value to the Cardano community by creating a clear and adaptable legal framework for blockchain, DeFi, and crypto-assets. This framework will allow governments and regulators to adopt the technology in a secure and regulated manner, which will drive ecosystem development on multiple fronts.

With clear regulations in place, doors will open to greater investments, as blockchain-based projects will be able to operate with fewer legal and regulatory uncertainties. This, in turn, will facilitate the creation of new businesses on the Cardano network, eliminating legal barriers that often hinder innovation. Additionally, with standardized regulations, entrepreneurs and companies can develop products and services under an established legal framework, accelerating the adoption and growth of the ecosystem.

Finally, this legal framework will attract the attention of legislators, investors, and international organizations, who will see Cardano as a platform prepared to meet global regulatory requirements, strengthening its position as a leader in blockchain-based solutions.

How will you measure this impact?

• Growth of projects and businesses on the Cardano network: We will measure the impact by observing the increase in the creation of projects and companies using the Cardano blockchain. The legal framework will facilitate the launch of new initiatives, and we will track the number of applications, smart contracts, and businesses developed under these regulations.
• Increase in blockchain project investments: We will evaluate the impact by tracking the flow of investments directed towards projects within the Cardano ecosystem. A clear and stable regulation will attract more investors, enabling sustained growth of the platform.
• Feedback from entrepreneurs and users: We will collect feedback from entrepreneurs, companies, and end users on the effectiveness of the legal framework in simplifying regulatory processes, improving legal security, and facilitating the development of their businesses.
• Interest and collaboration with the legal community: We will measure the participation of legal professionals and regulators in using the legal framework as a reference for designing local or global regulations. This will be reflected in its adoption as an educational tool and in collaboration with the international legal community.
• Expert evaluations: We will obtain reviews from legal and blockchain experts to validate that the proposed framework meets the objectives of creating a safe, reliable, and conducive environment for blockchain development on Cardano.

How will you share the outputs and opportunities that result from your project?

• Publication of Documentation and Reports: We will publish comprehensive documentation and detailed reports on the development of the framework, its methodology, and key results. These documents will be made available to the entire Cardano community, governments, and interested entities.
• Publications in Specialized Media and Case Studies: We will produce articles and case studies detailing the impact and best practices derived from the project. These will be disseminated in academic journals, specialized publications, and research forums to maximize visibility.
• Promotion on Digital Platforms and Social Media: We will maintain a strong online presence through social media, blogs, and Cardano community platforms, sharing results and encouraging engagement from the community and stakeholders worldwide.

[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 ability to execute this project with high levels of trust and accountability is grounded in several key aspects:

Team Experience: We have a highly skilled team with a strong track record in the creation and development of regulatory frameworks. With over 10 years of collective experience in the legal field, we have advised and collaborated on public policy formulation in Ecuador for over 30 years. Additionally, our members have contributed to relevant publications on law, education, society, and innovation.

This experience ensures that our approach is aligned with international best practices, and we deeply understand the legal and regulatory challenges faced by emerging technologies such as blockchain and DeFi.

Transparency in Execution: We are committed to maintaining open and transparent communication throughout the project cycle. We will provide periodic reports detailing milestones achieved, challenges overcome, and the overall project status. These reports will be available to our funders and stakeholders, enabling rigorous tracking of progress and fostering trust in our ability to deliver.

Audits and Independent Evaluations: To ensure maximum transparency and accountability, we plan to conduct periodic audits by independent experts in blockchain, constitutional law, and financial regulations. These audits will not only ensure that the project progresses as planned but also validate the technical and legal quality of the regulatory framework we are developing. To guarantee an objective perspective, we will rely on professionals with recognized expertise, particularly from academia and the tech sector.

Validation of Feasibility: Our strategy is based on the integration of universal legal principles and a comparative analysis of existing international legislation. Additionally, we will validate our approach through consultations with international experts in law and technology, who will provide critical insights into global trends and regulatory challenges. Continuous reviews by these specialists will ensure that our framework is applicable and adaptable across various jurisdictions.

In summary, our experience, combined with our commitment to transparency and accountability, ensures that we have the capability to successfully execute this project. The combination of independent audits and ongoing evaluations will guarantee the feasibility of our approach, delivering a robust regulatory framework essential for the safe and regulated adoption of blockchain and crypto-assets.

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

Project Planning

• Scope Definition: We will develop a comprehensive project outline, detailing the macro tasks and subtasks that will form each work phase. The teams responsible for each task will be identified, assigning specific roles based on their experience.
• Schedule Establishment: We will define the project timeline, marking deadlines for each activity and intermediate milestones that will serve to monitor progress.
• Resource Allocation: Financial, technological, and human resources will be efficiently distributed, ensuring that each team has the necessary tools to complete their tasks.
• Work Methodology: We will establish the methods and processes that will guide the execution of the project, including the collaborative work approach, the use of digital platforms for tracking, and the quality control tools.
• Risk Assessment: We will identify potential risks that could affect the project's development and design mitigation strategies to reduce their impact.

Deliverables for this phase:

1. Project roadmap, including a detailed timeline, the teams involved, and the assigned roles.
2. Documentation on the work methodology and the tracking platforms to be used.
3. Resource allocation report.
4. Risk management plan.

Acceptance Criteria:

1. The roadmap must be clear, detailed, and easy to understand, with well-defined activities and responsible parties.
2. Planning and management documents must be published in an accessible repository (e.g., GitHub) to ensure transparency.
3. Resource allocation must be approved by the project management team.
4. The identification of risks and the mitigation plan must be validated by project management experts.

Research and Comparative Analysis

• Analysis of existing legislation: We will conduct a comprehensive comparative study of international legislation that already regulates blockchain, cryptocurrencies, and DeFi. We will focus on identifying best practices and pioneering regulations.
• Evaluation of the current legal framework: We will review the current legal framework in South America and assess the regulatory gaps that could be addressed through our project.
• Consultations with international experts: We will organize roundtables and workshops with specialists in blockchain and regulatory law to gather input and feedback on the specificities of each jurisdiction.
• Preparation of preliminary reports: Based on the results of the comparative analysis and consultations, we will develop preliminary reports that outline key areas where the legal framework needs adjustments or innovations.

Deliverables for this phase:

1. Comparative report on relevant international legislation.
2. Document evaluating the current South American regulatory framework.
3. Minutes from meetings and workshops with experts.
4. Preliminary report with initial recommendations.

Acceptance Criteria:

1. Reports must be comprehensive and based on verifiable analyses of the studied legislation.
2. Preliminary recommendations must be consistent with universal legal principles and the specific needs of the region.
3. All reports and documents from this phase must be reviewed by experts and published in the official repository.

Development of the Proposed Legal Framework

• Drafting the legal framework: Based on the research results, we will draft a legal framework for blockchain, crypto-assets, and DeFi, tailored to South American realities.
• Validation of the draft: The draft will be reviewed by experts in international law and blockchain technology. We will incorporate their suggestions to ensure the proposed framework is robust and applicable.
• Simulations and impact assessments: We will conduct regulatory simulations to predict how the proposed framework will affect the implementation of blockchain projects and their viability within the current legal environment.
• Public consultation workshops: We will invite the Cardano community, regulators, and other key stakeholders to participate in feedback workshops, where the proposed framework will be discussed and suggestions for improvement will be collected.

Deliverables for this phase:

1. Draft of the proposed legal framework.
2. External validation report with expert reviews.
3. Results of regulatory simulations and impact assessments.
4. Minutes from public consultation workshops.

Acceptance Criteria:

1. The framework must be validated by at least three international experts.
2. Simulations must demonstrate that the framework is applicable and creates a safe and attractive environment for blockchain development.
3. The final version of the legal framework must incorporate feedback collected during the workshops.

Dissemination and Implementation

• Publication of results: The final framework will be published on digital platforms and shared with governments, regulatory bodies, and the Cardano blockchain community.
• Training and capacity building: We will develop training programs for regulators, lawyers, and developers interested in implementing the framework.
• Monitoring and tracking: We will establish a tracking system to monitor the adoption of the framework and its impact on the creation of blockchain-based projects and businesses.
• Closing project : Project completion report.

Deliverables for this phase:

1. Publication of the final legal framework on international platforms.
2. Strategic partnerships with governments and organizations.
3. Training program implemented.
4. Monitoring report on the adoption of the framework.
5. Project completion report.

Acceptance Criteria:

1. The framework must be accessible to the global community.
2. The training programs must train a minimum number of participants.
3. The monitoring report must show clear metrics on the adoption and impact of the framework.

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

Edgar Esteban Cruz Ponce

Principal Researcher and Project Leader

https://www.linkedin.com/company/cruz-ponce-asociados/

• Director of Legal and Blockchain Research.
• 10 years of experience in legal advisory.
• 10 years as a consultant on legal matters.

Soraya Valentina Ponce Guerrero

Legal Researcher

https://www.linkedin.com/in/soraya-ponce-21479160/

• 10 years developing public policies for the Government of Ecuador.
• 15 years working on policy implementation for human talent management.

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

Phase 1: Research and Legal Framework Development

1. Legal Researchers

• Cost per researcher: ADA 2,500 per month
• Duration: 4 months
• Total cost for legal researchers: ADA 30,000 (3 researchers for 4 months)

2. Blockchain Expert

• Cost: ADA 5,000 per month
• Duration: 4 months
• Total cost for blockchain expert: ADA 20,000

3. Administrative Assistant

• Cost: ADA 1,500 per month
• Duration: 4 months
• Total cost for administrative assistant: ADA 6,000

Phase 2: Validation and Simulations

1. Professional Services

• Legal Advisory (external validation by experts): ADA 10,000
• Blockchain Auditing (simulation and impact review): ADA 8,000

Phase 3: Community Engagement and Workshops

1. Consultation Workshops with Stakeholders

• Cost: ADA 5,000
• Marketing and Promotion: ADA 5,000

Phase 4: Project Management and Reporting

1. Project Management

• Cost: ADA 10,000
• Documentation and Reporting: ADA 6,000

Total Budget: ADA 100,000

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

The cost of this project provides significant value for the Cardano ecosystem by addressing a critical barrier: the lack of clear regulatory frameworks for blockchain, DeFi, and crypto-assets, particularly in South America. By creating a robust legal framework, the project promotes the safe and regulated adoption of blockchain technology, directly benefiting developers, investors, and businesses within the Cardano ecosystem.

This investment will lead to:

1. Increased adoption: Clear regulations will facilitate the entry of new projects and businesses into the Cardano network, fostering innovation without legal uncertainty.
2. Attracting investment: With established regulations, the Cardano ecosystem becomes more attractive to institutional investors, allowing for greater capital flow and project development.
3. Scalable impact: The legal framework developed can serve as a model for other regions, extending the reach of the project beyond South America and generating long-term value for the global Cardano community.
4. Collaboration with governments: By working with regulatory bodies, this project will strengthen Cardano's position as a compliant, reliable blockchain for mission-critical applications.

Considering the regulatory clarity, investment potential, and business development this project will unlock, the cost represents a strategic investment in the long-term growth and sustainability of the Cardano ecosystem.