Non-Collateralised Lending and Non-paired Liquidity 1.0

[GENERAL] Name and surname of main applicant

Shelton Mwanza

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

Entity (Not Incorporated)

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

11

[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)

We aim to build a DeFi platform on Cardano, that enhances DEX liquidity with non-collateralised lending, non-paired liquidity, and liquidity aggregation.

[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.”

For effective, efficient and timely execution of the project we will work with Satoshi Centre (https://satoshicentre.io/) since they have core working spaces, the expertise as well as most of the development, testing and deployment resources we require for this project.

[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 outputs will initially be non-open source as a result of the proprietary nature of some of the features in this project. However, once we manage go live on the Mainnet and gain enough momentum the project will fully become open source to allow improvements to be done by the larger community of developers.

[METADATA] Horizons

DeFi

[SOLUTION] Please describe your proposed solution

Title: Enhancing Cardano DeFi with Non-Collateralised Lending and Non-paired Liquidity

1. Problem Statement

DeFi is highly plagued by entry barriers for existing, potential or small liquidity holders hindering crypto mass adoption for potential and small liquidity holders. It is also faces liquidity fragmentation and centralisation risks. Many DeFi platforms only offer paired liquidity provision hence limiting the many existing and potential LPs, they also run lending services that require collateral preventing those without collateral from acquiring financial services. Additionally, liquidity is scattered across various DEXs, resulting in inefficiencies such as increased slippage and suboptimal trade executions. Furthermore, many DeFi protocols rely on centralised services for liquidity management, making them vulnerable to central points of failure. 

2. Solution

Felicity 1.0 aims to tackle these issues by offering non-collateralised loans and the option for non-paired or semi liquidity provision on the Cardano blockchain, This will also feature aggregating liquidity across DEXs on Cardano and yield farming. The project will focus on the following features during the initial phase:

•  Non-Collateralised Lending and Yield Farming
•  Non-Paired Liquidity Provision
• Felicity Token
• Omnipool
• Liquidity Aggregation
• Oracle Integration

3. Detailed Features

3.1 Core Features (Initial Phase)

1. Lending and Yield Farming:

• Lending: Felicity 1.0 will feature non-collateralised lending which is meant to allow users to borrow assets and use rewards to cover interest and loan repayments, offering a self-repaying loan mechanism.
• Yield Farming: The system will also enable users to stake their tokens and earn rewards in Felicity Token while maintaining flexibility through paired, semi-paired and non-paired liquidity provision.

2. Non-paired Liquidity Provision:

• With this function users can provide liquidity using only one asset, lowering barriers to entry and not limiting us to attracting paired liquidity providers but also those with small holdings and insufficient funds as they can opt for semi-paired liquidity provision.
• Our goal is making sure that we provide more options available for the Cardano Ecosystem.

3. Felicity Token

• Our objective was never to create a new currency as “too many” already exist, however in order for the above features to work we will have to introduce a new currency in the Cardano ecosystem and the cryptospace called JUF/JUE the Felicity token.
•  It is also necessary for the incorporation of additional features in Felicity 2.0.

4. Omnipool:

• This feature unifies liquidity across all connected DEXs in the Cardano Ecosystem, maximising rewards for liquidity providers and optimising trade outcomes.
• This ensures that liquidity is channeled where it is required the most enhancing rewards for the community.

5. Liquidity Aggregation:

• This feature is meant to aggregates liquidity from multiple DEXs on Cardano blockchain to provide the best trade execution with minimal slippage.
• It was one of our objectives to be an AMM for Dexs when we applied for funding in Fund 7 2021. It is still our desire to do so though not our key selling point since SteelSwap wonderfully did that.

6. Oracle Integration:

• We intend on using Charli3 an internal oracle to provide real-time price data and market information, ensuring accurate trades and efficient liquidity routing, with plans to integrate external oracles later on.

 

4 How Felicity Works

4.1 Initial Phase Workflows

1. Trade Execution:

• The trader initiate the swap (e.g., ADA to DJED) on Felicity. The liquidity aggregation system helps the trader to route their trade through the optimal pool to ensure minimal slippage and efficient execution.

2. Non-paired Liquidity Provision:

• Liquidity providers (LPs) deposit a single asset into Felicity’s omnipool, allowing them to earn rewards without needing to pair assets with JUF. JUF holders can preset the assets they desire to pair with based on their goals.

3. Yield Farming and Lending:

• Users can stake their assets in Felicity’s liquidity pools to earn JUF tokens as rewards. Borrowers can also take out loans, with rewards automatically routed to cover interest payments through yield farming.

 

4.2 Step by step guide to the trading process and borrowing from Felicity Reserve Lending Pool

4.21 Steps for the Trading Process:

a. Trade Initiation: Traders select the currency pair and enter the trade amount.

b. Route Suggestion: Felicity analyses and displays optimal routes and trader chooses one DEX.

c. Fee Payment & Transaction Confirmation: Ordinary traders pay standard DEX trading fees, transaction fees and a small Felicity fee (e.g., 0.1%) as they confirm payment.

d. Trade Execution: Trade is processed on the DEX/AMM offering the best terms as chosen by trader.

e. Settlement: Assets are delivered to the trader's wallet trader receives funds as shown in the flow chart below.

Steps for Normal Trade Execution

4.2.2 Steps for Borrowing from Felicity Reserve Lending Pool:

1

a.    Borrower Set Amount and IR: Borrowers enter the amount they want to borrow (minimum equivalent of 10 DJED) based on their stake and select their desired interest rate.

b.    The system checks for available funds in the Felicity Reserve Lending Pool, which takes precedence for funding loans.

c. Borrower Proceeds: If the Reserve Lending Pool has available funds matching the borrower’s request and borrower is to proceed.

2.    Borrower Accepts TCs: The borrowed funds are locked until the generate rewards that repays the principal and interest unless the borrower funds the repayment using another method.

3.    Borrower Confirms Transaction: The borrower pays platform fees (in ADA) and confirms the transaction, the loan is funded immediately.

 

Steps for Non-Collateralised Loan

Steps 4 and 5 are done automatically once there are enough funds for loan repayment

4.    Loan Repayment: Once rewards generated by borrowed funds are enough to pay for principal and interest the system sends the principal to the Reserve Lending Pool, and interest to its intended platform e.g conversion or insurance wallet.

5.    Borrower Owns Funds: Ownership of funds is transferred to borrower minus all rewards.

This primarily is the solution that we envisage for Felicity 1.0..

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

Benefits for Stakeholders

Felicity 1.0 is determined to bring the following benefits to Cardano Blockchain Stakeholders:

1.    Liquidity Providers (LPs):

• Higher Yields: Through semi/non-paired liquidity provision and yield farming, Cardano LPs can earn rewards with minimal risk and less complexity compared to traditional paired liquidity provision.

2.    Lenders and Borrowers:

• Self-Repaying Loans: These will allow lenders to provide liquidity and earn rewards, while borrowers benefit from automatically routed rewards to cover interest and principal at the end of repayment period, making loan repayment smoother and less burdensome.
•  Flexible Staking beyond Loan Repayment: Borrowers can continue to stake their assets after loan repayment to keep earning rewards.
•  Non-Collateralised Loans: Borrowers can benefit from not needing to have collateral to benefit from participating in the Cardano ecosystem.

3.    Traders:

• Optimized Trades: With liquidity aggregation and omnipool routing, traders benefit from lower slippage and better price execution.

4.    Decentralized Exchanges (DEXs):

• Increased Volume and Liquidity: Cardano DEXs will benefit from higher trade volumes due to liquidity aggregation, which increases market depth and user engagement.
• More Efficient Markets: Felicity routes trades through the most efficient pools, ensuring that liquidity remains optimised across all connected DEXs.
• Increase Visibility: Dexs who are listed on Felicity will benefit from visibility as the will be featured on platform and routing feeds hence enriching their ecosystems.

5.    Cardano Blockchain:

• Increased Liquidity: By aggregating liquidity and providing a simplified DeFi interface, Felicity 1.0 strengthens Cardano’s overall liquidity ecosystem, boosting DeFi activity on the blockchain.
• Wider Adoption: Felicity’s user-friendly and scalable DeFi infrastructure attracts non-DeFi native users, increasing the Cardano user base and encouraging new projects to build on Cardano as they will be feature amongst choices for liquidity routing.

[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

1.    Shelton Mwanza

Academics:

a. Introduction to Decentralised Finance - University of Nicosia (UNIC) 2022, (MOOC)

b. Introduction to Digital Currencies 2020 MOOC - UNIC

c. Bachelor of Science Honours Degree in Economics - University of Zimbabwe 2015.

 

Experience: Strong leadership in blockchain technology and project management, having been part of a number of teams spearheadeding multiple projects in blockchain such as QNG-Nigeria, Plaas Farmers Chain an incubation of Satoshi Center Botswana, Zimbocash - South Africa, and AfroDex Labs . I have a passion for pushing decentralised finance (DeFi) and financial technology systems worldwide starting in my own nation which has suffered from currency and banking sector failures multiple times.

 

2.    Romeo Musemburi  

Academics:

a. Masters in Business Administration (MBA) CIU, Nicosia Cyprus 2018

b. Bsc Hons Economics UZ Harare Zimbabwe 2015,

c. Certificate in Marketing Geographical Indicators CIU , Nicosia Cyprus 2017,

d. Certificate in Human Recources Administration, CIU Nicosia Cyprus 2017,

Experience: Romeo has a deep understanding of decentralised finance (DeFi) and financial technology systems and Economics

3.  Satoshi Centre Botswana

We are excited to collaborate with the team from Satoshi Centre Botswana (Plaas). Plaas has substantial experience in blockchain technology, having developed the Plaas token on Ethereum (listed on Uniswap and IndoEx CEX). Despite being hindered by high Ethereum transaction fees and lack of funding, the team gained valuable expertise in developing and deploying tokens and liquidity solutions. They also are a leading firm spearheading and supporting blockchain start-ups in Bostwana and the rest of Africa which makes them suitable to undertake this great project with us as we have an ongoing working relationship with them.

Plaas Overview:

• Plaas Token on Ethereum: Plaas created a token that was successfully listed on both Uniswap and IndoEx centralised exchange. More information about their token can be found on Etherscan here.
• Incubation by Satoshi Centre Botswana: Satoshi Centre is a leading blockchain hub in Botswana and Africa, supporting various projects in the fintech and blockchain space. They also operate a Fintech/Blockchain Hub with Co-Working Spaces for blockchain development and incubation. More information on their projects can be found on the Satoshi Centre website here.

This collaboration provides us with access to not only blockchain expertise but also the physical and operational infrastructure necessary for Felicity’s development as they have been there, done that and still doing it.

To ensure that our approach is feasible, we will leverage the following validation steps:

1. Development Expertise:

• Plaas has already demonstrated the ability to build and deploy blockchain solutions (e.g., Plaas Token). The experience gained from listing tokens on Uniswap and IndoEx demonstrates their understanding of liquidity, tokenomics, centralised and decentralised exchanges.
• Their resources will allow us to prototype and test Felicity efficiently while accessing their broader blockchain community for feedback and collaboration.

2. Testnet and Community Validation:

• Felicity will be tested rigorously on the Cardano testnet before deployment on the mainnet. We will gather user feedback through beta testing and engage with the Cardano community to refine the platform before the official launch.

3. Security tests:

• These will done to ensure that the Felicity 1.0 is robust and secure for users and Cardano stakeholders.

4. Provide feedback:

• We will provide feedback on progress and challenges as required by the rules governing Project Catalyst.

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

Months 1 & 2: Team Assembly, Research, and Platform Design

Budget Allocation: 14,700 ADA

Tasks:

•   Assemble team.
• Finalise platform design and liquidity aggregation architecture.
• Legal Consultations
• Document finalisation and integration plan.
• Develop specifications for non-paired liquidity and omnipool.

Deliverables:

• Complete team assembly.
• Platform design documentation, including lending, token dynamics, oracle integration omnichain and non-paired liquidity strategies.

Months 3 & 4: Smart Contract Development

Budget Allocation: 32,500 ADA

Tasks:

•  Develop smart contracts for liquidity aggregation, yield farming, lending, non-paired liquidity, and omnipool.
• Implement oracle integration for price feeds.
• Develop JUF token smart contract and token dynamics.

Deliverables:

• Deployed smart contracts on Cardano testnet with successful basic trade execution.
• Integrated oracle functionality, yield farming, lending, non-paired liquidity and JUF token.

Months 5 & 6: Web Development and Off-Chain Infrastructure

Budget Allocation: 22,700 ADA

Tasks:

•  Develop Felicity’s frontend and backend to interact with the Cardano blockchain and JUF token.
•  Create interfaces for yield farming and lending features.
•  Develop omnipool management interface.

Deliverables:

• Functional testnet version of Felicity’s platform with basic user interaction.
• User interfaces for yield farming, lending, and omnipool functionalities.

Months 7 & 8: Security Audits and Testing

Budget Allocation: 22,500 ADA

Tasks:

• Conduct external audits for smart contracts and platform infrastructure.
• Test the integration of all functionalities, including oracle, lending, yield farming, and JUF token.

Deliverables:

• Completed security audits with documented findings and applied adjustments.
•  Performance testing results for all features.

Months 9 &10: Beta Testing and Community Engagement

Budget Allocation: 29,500 ADA

Tasks:

•  Launch beta testing to gather feedback on platform functionalities.
• Engage the community to encourage participation and feedback.
• Conduct initial distribution of JUF tokens for beta participants.

Deliverables:

• Successful beta launch with integrated user feedback.
•  Documentation of community engagement efforts and feedback collected.

Month 11: Mainnet Launch and Token Deployment

Budget Allocation: 21,500 ADA

Tasks:

• Deploy Felicity on Cardano mainnet with full functionality (liquidity aggregation, yield farming, omnipool and non-collateralized lending).
•  Launch JUF token on the AMM and provide initial liquidity.

Deliverables:

• Mainnet launch with operational features.
• Initial liquidity pool formation and active trading of JUF token.
• Close-up report

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

1. Shelton Mwanza: Project Lead & Community Coordinator

LinkedIn: Shelton Mwanza Telegram: https://t.me/shelmwanza

Key Responsibilities:

• Overseeing the overall execution of the project, ensuring that milestones and timelines are met.
• Coordinating between the various teams, including developers, community members, and stakeholders.
• Managing outreach, engagement and overall administration
• Monitoring the budget and resource allocation to ensure efficient use of funds.
• Reporting progress, challenges, and outcomes to stakeholders and community leaders.

2. Romeo Musemburi: Strategy & Operations Manager

Telegram: https://t.me/TanyaMuse

Key Responsibilities:

• Developing and implementing strategic plans for the smooth operation of the platform, including yield farming, liquidity aggregation, and non-collateralized lending.
• Overseeing the tokenomics development of the JUF token, working closely with developers and economists.
• Handling administrative tasks and ensuring the project meets regulatory standards and compliance requirements.
• Organising beta testing, community feedback sessions, and documentation to refine the platform ahead of the main-net launch.
• Supporting the team with insights on financial management, risk mitigation, and day-to-day project operations.

3. Itireleng Alakanani: CEO of Satoshi Centre & Developer Lead

LinkedIn: Mrs. Alakanani Itireleng

Telegram: https://t.me/MotherPkay

A woman dedicated to mainstreaming of the blockchain in in Botswana and Africa through educating, pioneering and partnering with both grassroot and mature players n the industry.

Key Responsibilities:

• As the CEO of Satoshi Centre, Itireleng is responsible for administration and overseeing the development team, ensuring the technical development of the Felicity platform aligns with its goals.
• Managing the developer team to execute smart contract creation, web development, and integration with Cardano.
• Leading the security audit processes and coordinating with external auditors to ensure the platform is secure.
• Guiding the deployment of key features such as non-paired liquidity, the omnipool, and oracle integration.
• Facilitating collaboration between developers and other departments to ensure smooth communication and workflow.

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

Budget 150000 ADA (Approx. 53625 USD) on 01.10.24

Months 1 & 2: Team Assembly, Research, and Platform Design

Budget Allocation: 14,700 ADA

• Team recruitment: 1,500 ADA
• Provision of computers: 3,000 ADA
• Legal Consultations 2,500 ADA
• Research and design documentation: 2,500 ADA
• Miscellaneous (meetings, research tools, contingency): 1,000 ADA
• Admin Costs (Internet and Incentives): 4,200 ADA (2,100 ADA x 2 months)

Months 3 & 4: Smart Contract Development

Budget Allocation: 32,500 ADA

• Smart contract developers: 16,000 ADA
• JUF tokenomics development: 6,500 ADA
• Testing environments and tools: 5,500 ADA
• Admin Costs (Internet and Incentives): 4,200 ADA (2,100 ADA x 2 months)
• Contingency: 300 ADA

Months 5-6: Web Development and Off-Chain Infrastructure

Budget Allocation: 22,700 ADA

•  Web development team: 8,000 ADA
•  Backend development (off-chain infrastructure): 5,000 ADA
•  Infrastructure (servers, storage): 4,000 ADA
•  Testing and integrations: 1,200 ADA
• Admin Costs (Internet and Incentives): 4,200 ADA (2,100 ADA x 2 months)
• Contingency: 300 ADA

Months 7 & 8: Security Audits and Testing

Budget Allocation: 22,500 ADA

• Audit firms/security experts: 13,000 ADA
• Fixes and refinements: 5,000 ADA
• Admin Costs (Internet and Incentives): 4,200 ADA (2,100 ADA x 2 months)
• Contingency: 300 ADA

Months 9 & 10: Beta Testing and Community Engagement

Budget Allocation: 29,500 ADA

• Beta testing infrastructure and management: 10,000 ADA
• JUF token distribution for beta participants: 8,000 ADA
• Community engagement and feedback sessions: 5,000 ADA
• Miscellaneous (promotions, marketing): 2,000 ADA
• Admin Costs (Internet and Incentives): 4,200 ADA (2,100 ADA x 2 months)
• Contingency: 300 ADA

Month 11: Mainnet Launch and Token Deployment

Budget Allocation: 21,500 ADA

• Mainnet deployment: 10,000 ADA
• JUF token launch: 3,500 ADA
• Initial liquidity provision: 5,000 ADA
• Admin Costs (Internet and Incentives): 2,100 ADA (1 month)
• Close-up Reporting: 600 ADA
• Contingency: 300 ADA

Months 12++

Future Maintenance

• Budget Allocation: 5,000 ADA

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

Value for Money

Felicity 1.0 is intended to be a feature rich DeFi platform that incorporates liquidity aggregation, yield farming, noncollaterised lending and non-paired liquidity in its initial roll out on Cardano blockchain. It will make use of oracles for live price feeds, an omnipool, to allow LPs to direct liquidity were it is needed the most.

               

Non-Paired Liquidity promotes is inclusivity, allowing individuals with one asset to provide and benefit from participating in shares of yield farming with the option of possessing both assets at the end of the process. The lending platform will further increase the earning capacity of stakeholders whilst borrowers will benefit from non-colleterlised lending. Hence development and rolling out of the first set of features can surely be considered a bang for the bark based on the presented budget of 150000 ADA. Just reconsider the following budget matrix:

1.    Team Assembly and Design (9.8%)

• 14,700 ADA is allocated to team assembly and design, laying a solid foundation through skilled recruitment and comprehensive documentation.

2.    Smart Contract Development (21.40%)

• 32,100 ADA ensures robust contracts for liquidity aggregation, yield farming, and lending, securing operations essential for user trust.

3.    Web Development and Infrastructure (14.93%)

• 22,400 ADA mainly dedicated to creating a seamless user interface and off-chain infrastructure, enhancing user interaction with the platform.

4.    Security Audits (14.80%)

• 22,200 ADA is set aside for security audits, prioritising user safety and data integrity through expert evaluations.

5.    Beta Testing and Community Engagement (19.47%)

• 29,200 ADA will fund beta testing and community engagement, gathering valuable feedback to refine the platform before the main-net launch.

6.    Main-net Launch and Token Deployment (14.12%)

• 21,200 ADA is earmarked for the main-net launch and JUF token deployment, crucial for establishing market presence and initial liquidity.

7.    Future Maintenance and Contingency (5.33%)

• 5,000 ADA is reserved for future maintenance, ensuring sustainability, along with 3,000 ADA for miscellaneous costs to cover unforeseen expenses.