RWA focused permissioned layer 2 for Institutions and Govts

[GENERAL] Name and surname of main applicant

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

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

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

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

A permissioned Layer 2 on Cardano, tailored for RWAs, offers institutions and governments secure, compliant, and private blockchain infrastructure for asset tokenization and management.

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

[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?

[GENERAL] Please provide here more information on the open source status of your project outputs

The project will be open source under MIT License. This will allow anyone to do whatever they wish with the original code, as long as the original copyright and license notice is included either in the distributed source code or software.

[METADATA] Horizons

[SOLUTION] Please describe your proposed solution

Proposed Solution: Permissioned Layer 2 for Real-World Assets (RWA) on Cardano

Perception of the Problem:

The tokenization of Real-World Assets (RWAs), such as property, commodities, and financial instruments, has the potential to revolutionize asset management by increasing transparency, liquidity, and efficiency. However, institutions and governments face several key barriers when adopting public blockchains for this purpose:

• Privacy and Confidentiality Concerns: Public blockchains, while decentralized, expose transaction data to all participants, raising privacy concerns for sensitive assets.
• Regulatory Compliance: Governments and financial institutions must comply with strict regulations (e.g., KYC/AML), which are difficult to enforce on open, permissionless blockchain networks.
• Scalability and Security: The need for high transaction throughput and a secure environment for large-scale asset management requires a reliable solution.

These challenges make it difficult for institutions to adopt blockchain technology for managing RWAs in a secure, compliant, and private manner.

Approach to Solving the Problem:

We propose developing a Permissioned Layer 2 solution on the Cardano blockchain that is specifically designed to cater to the needs of institutions, governments, and enterprises dealing with Real-World Assets. This permissioned Layer 2 would operate on top of Cardano’s public Layer 1 network, inheriting its security and decentralization, but providing enhanced control and privacy features to meet institutional and governmental requirements.

Key Features of the Solution:

• Permissioned Access Control: Only verified and authorized participants (e.g., institutions, governments, and regulated entities) can join and interact with the Layer 2 network, ensuring compliance with regulatory requirements.
• Privacy and Confidentiality: Transaction details, user data, and asset information are kept private within the Layer 2, with the ability to share selective information with regulators or authorized third parties.
• Regulatory Compliance Tools: Built-in compliance features such as KYC (Know Your Customer), AML (Anti-Money Laundering) protocols, and auditing tools to ensure that institutions can meet regulatory obligations while utilizing blockchain technology.
• High Transaction Throughput: The Layer 2 solution will offer improved scalability, enabling high transaction volumes necessary for real-world financial and asset management use cases.
• Interoperability with Cardano Layer 1: Seamless integration with Cardano’s Layer 1, allowing RWAs to interact with broader DeFi (Decentralized Finance) ecosystems, while maintaining the privacy and security of sensitive operations within Layer 2.

Engagement and Beneficiaries:

This project will engage a wide range of stakeholders, including:

• Financial Institutions: Banks, asset management firms, and other financial services providers will benefit from a secure and compliant platform for tokenizing and managing RWAs.
• Governments: Government entities can use this Layer 2 solution for the issuance and management of digital securities, bonds, and public assets while ensuring regulatory oversight.
• Enterprises and Corporations: Large businesses and corporations dealing with real-world assets, from real estate to commodities, will benefit from secure and transparent asset management tools.
• Regulators and Auditors: The permissioned nature of the Layer 2 solution will enable seamless regulatory oversight and auditing without compromising the privacy and security of asset holders.
• Developers and Blockchain Ecosystem: Developers building institutional-grade dApps (decentralized applications) for RWAs can leverage the Layer 2 for creating compliant and private applications.

Demonstrating and Proving Impact:

We will measure the success of this solution through several key performance indicators (KPIs):

• Adoption by Institutions and Governments: Track the number of institutions and governmental bodies utilizing the Layer 2 network for RWA tokenization.
• Transaction Volume: Measure the total transaction volume and the value of RWAs managed on the Layer 2.
• Compliance Adherence: Evaluate the integration of compliance features such as KYC/AML processes and monitor audits by regulators.
• Interoperability Success: Monitor interactions between the Layer 2 and Cardano’s Layer 1 to ensure seamless RWA management in the broader blockchain ecosystem.

Additionally, pilot programs with select financial institutions and governments will help validate the framework’s usability, security, and regulatory alignment.

Uniqueness of Our Solution:

What sets this Permissioned Layer 2 apart is its ability to combine the security and decentralization of Cardano’s Layer 1 with the privacy, control, and compliance features needed by institutions and governments. Unlike fully public or permissionless blockchain solutions, this framework addresses critical concerns around privacy, regulation, and scalability, making it highly suitable for large-scale RWA management.

Furthermore, it enables institutions to engage with tokenized assets without compromising regulatory integrity or the privacy of sensitive operations, while still benefiting from blockchain's transparency and immutability. This balance of decentralization and control is crucial for the institutional adoption of blockchain technology.

Importance to Cardano:

This solution is vital to Cardano’s growth as it opens the door for large-scale institutional adoption, positioning Cardano as a leading blockchain for real-world asset tokenization and institutional-grade finance. By offering a tailored Layer 2 solution, Cardano will become an attractive platform for financial institutions and governments seeking to integrate blockchain into their operations securely and compliantly.

As more institutions tokenize assets on Cardano, it will increase the utility and liquidity of RWAs, foster cross-chain interactions, and drive broader adoption of the Cardano ecosystem in the global financial landscape. This will solidify Cardano's position as a blockchain of choice for secure and scalable real-world applications.

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

Our Permissioned Layer 2 for RWAs will drive institutional and governmental adoption of Cardano, bringing liquidity, legitimacy, and scalability to the network. By enabling the secure and compliant tokenization of real-world assets, the project will broaden the utility of Cardano beyond DeFi and into mainstream finance and governance, increasing overall network activity and value.

Measuring Impact:

1. Institutional Adoption: Number of institutions and governments using the Layer 2.
2. Asset Tokenization: Volume and value of RWAs tokenized on Cardano.
3. Transaction Growth: Increase in Layer 2 transaction volume and throughput.
4. Compliance Integration: Success in implementing KYC/AML tools and regulatory oversight.

Sharing Outputs:

• Open-Source Documentation & SDKs for developers and institutions.
• Partnership Announcements with institutions and governments.
• Regular Reports on adoption metrics and network impact, shared via community channels, social media, and Cardano developer portals.

This approach ensures transparency and encourages broader engagement, helping foster growth in the Cardano ecosystem.

[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 Expertise and Background

Raihan Khan and Amaan Khan bring over 7 years of combined experience in product development, specializing in Full Stack Development, Cardano, and cybersecurity. Raihan, as the tech lead at PinkSurfing, has a strong foundation in JavaScript, React, Node.js, and MongoDB, while Amaan's expertise lies in web3, blockchain, AI, and the MERN stack.

Project Delivery and Fund Management

• Structured Development Process: Our approach involves rigorous planning, development, testing, and deployment phases with clear milestones and deliverables.

• Open Communication: We commit to maintaining open lines of communication with stakeholders through regular updates via social media, project reports, and community forums.

• Financial Oversight: Implementing detailed budgeting, regular audits, and transparent reporting ensures proper fund management and accountability.

• Validation and Testing: Prototypes will be deployed in controlled environments for validation, with feedback used iteratively to improve the concept.

• Community Engagement and Feedback: Continuous engagement with the Cardano community ensures alignment with user needs and expectations through beta testing and feedback collection.

Conclusion

With over 7 years of combined experience in product development and a robust project management approach, our team is highly capable of successfully conceptualizing RWA focused L2 with trust and accountability, contributing significantly to the growth of the Cardano community.

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

Framework Architecture and Development

A: Milestone Outputs

• Complete architectural design for the permissioned Layer 2 solution.
• Development of smart contracts for permissioned access, asset tokenization, and regulatory compliance tools (KYC/AML).
• Initial version of the DePIN SDK for integration with Cardano Layer 1.

B: Acceptance Criteria

• Documentation of the system architecture is reviewed and approved by stakeholders.
• Smart contracts are tested on a testnet and verified for security and functionality.
• DePIN SDK is functional for basic integration with Layer 1, allowing deployment of real-world assets.

C: Evidence of Milestone Completion

• Architectural design documentation.
• Smart contract test reports, demonstrating successful deployment on testnet.
• Code repository and SDK documentation available for review.

Pilot Deployment and Testing

A: Milestone Outputs

• Launch of a pilot program with institutional partners on the permissioned Layer 2 network.
• Full integration of compliance tools (KYC/AML) and privacy features.
• Performance testing for transaction throughput, privacy protection, and scalability.

B: Acceptance Criteria

• Successful deployment of pilot programs with at least one institution or government entity.
• Performance benchmarks are met for transaction scalability, security, and privacy.
• Positive feedback from pilot users confirming the system’s operational effectiveness.

C: Evidence of Milestone Completion

• Deployment reports from pilot institutions.
• Performance metrics demonstrating compliance and scalability.
• User testimonials or feedback reports from participating institutions.

Project Closure Report and Video

A: Milestone Outputs

• Comprehensive project closure report summarizing achievements, challenges, and next steps.
• Video presentation showcasing the developed solution and pilot outcomes.

B: Acceptance Criteria

• Final report and video reviewed and approved by stakeholders.
• Project is fully documented with clear recommendations for next phases or improvements.

C: Evidence of Milestone Completion

• Submission of the project closure report.
• Video presentation shared with the Cardano community through official channels.

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

Amaan Khan is a full-stack developer, Opshin developer, and cybersecurity enthusiast with four years of professional experience. He has worked on numerous innovative projects across web3, blockchain, artificial intelligence, and the MERN stack. Amaan has successfully completed a variety of freelancing projects, delivering exceptional solutions to his clients. In addition to his development work, he runs a graphic design company, where he collaborates with his team to provide creative and impactful solutions.

Furthermore, Amaan is passionate about cybersecurity and shares his knowledge through a dedicated channel. On this platform, he creates informative content covering topics such as blockchain, AI, and cybersecurity, helping to spread awareness and educate people about these critical areas. His diverse skills and commitment to both technology and education make him a valuable contributor to the tech community.

https://twitter.com/amaan_sec

https://www.instagram.com/amaan_sec/

https://www.instagram.com/amaan.designlab/

https://amaancoderx.github.io/portfolio/

https://www.linkedin.com/in/amaan-khan-20292823a/

Raihan Khan, a Full Stack and Blockchain Developer with a comprehensive 3+ years of background in developing scalable and efficient web applications. He is currently a tech lead at https://pinksurfing.com/. Armed with a Bachelor's degree in Computer Science from Rajshahi University, He have deep expertise in a range of technologies including JavaScript, React, Node.js, and MongoDB. His approach combines a keen understanding of user experience with robust backend logic to create seamless digital solutions that drive business success.

https://www.instagram.com/theraihhan/

https://www.linkedin.com/in/raihan-khan-07a1aa21b/

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

• Research: 25,000 ADA
• Project Manager: 4,000 ADA
• Lead Developer: 8,000 ADA
• Protocol Architect: 10,000 ADA
• Technical Writers: 3,000 ADA

• Design: 20,000 ADA
• Project Manager: 2,000 ADA
• Lead Developer: 8,000 ADA
• Protocol Architect: 10,000 ADA

• Low-Fidelity Prototype: 25,000 ADA
• Project Manager: 4,000 ADA
• Marketing activities: 12,000 ADA
• Backend Developers (2): 6,000 ADA
• QA Engineers: 2,000 ADA
• Technical Writers: 1,000 ADA

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

The cost of the project, set at 70,000 ADA, represents significant value for money for the Cardano ecosystem, taking into account the following factors:

Expertise in Cardano: The project necessitates skilled professionals with specialized knowledge of the Cardano blockchain & ecosystem.

These skills are in high demand and command premium rates. The budgeted costs are aligned with industry standards for such expertise.

• Efficient Resource Allocation: The proposed costs for conceptualizing this idea on the Cardano blockchain are carefully evaluated to ensure efficient resource allocation. By leveraging existing infrastructure and expertise within the Cardano community, the project minimizes unnecessary expenditures while maximizing the impact of the investment.

• Feasibility Assessment: The costs are determined based on a thorough feasibility assessment, taking into account factors such as development complexity, regulatory considerations, and market dynamics. This rigorous evaluation process minimizes the risk of budget overruns and ensures that the project remains financially viable throughout its lifecycle.

• Value Proposition: The costs of the proposal are justified by the potential value it brings to the Cardano ecosystem. The project has the potential to unlock new opportunities for growth and development, ultimately delivering significant long-term value for stakeholders.

In summary, the costs associated with the proposal are justified by the efficient allocation of resources, community-driven development approach, thorough feasibility assessment, and the value proposition for the Cardano ecosystem.