Hydra-Enabled On-Chain ChatGPT for Secure & High-Speed AI

[Proposal setup] Proposal title

Please provide your proposal title

Hydra-Enabled On-Chain ChatGPT for Secure & High-Speed AI

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

90000

[Proposal Summary] Time

Please specify how many months you expect your project to last

6

[Proposal Summary] Translation Information

Please indicate if your proposal has been auto-translated

No

Original Language

en

[Proposal Summary] Problem Statement

What is the problem you want to solve?

AI inference is opaque, centralized and unverifiable. Cardano lacks a secure, high-speed framework that will allow users to verify outputs, trace reasoning, and audit data sources in real time.

[Proposal Summary] Supporting Documentation

Supporting links

• https://app.nucast.io/
,
• https://x.com/NucastIO

[Proposal Summary] Project Dependencies

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

No

Describe any dependencies or write 'No dependencies'

No dependencies

[Proposal Summary] Project Open Source

Will your project's outputs be fully open source?

Yes

License and Additional Information

MIT License

[Theme Selection] Theme

Please choose the most relevant theme and tag related to the outcomes of your proposal

AI

[Campaign Category] Category Questions

Mention your open source license and describe your open source license rationale.

License: MIT

Widely adopted and recognised OS license, ensuring maximum compatibility.

Encourages broad adoption and contributions across the Cardano + AI developer community.

Permissive terms allow commercial and research use without barriers, ensuring faster ecosystem growth.

Aligns with Catalyst’s open-source goals by avoiding restrictions on forks, integrations, or derivative projects.

How do you make sure your source code is accessible to the public from project start, and people are informed?

Code will be hosted from day one on a public GitHub repository.

Commits tracked with version control and transparent history.

We will tag key milestones and releases for easy tracking.

Project updates (progress reports, changelogs, issues) will be shared openly with the community on GitHub.

How will you provide high quality documentation?

Provide developer-focused docs: README, setup guides, API references.

Provide user-facing docs: walkthroughs, examples, and tutorials.

Use clear structure and visuals using Gitbook

Host documentation publicly to ensure easy access & contribution.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

A Hydra-Enabled On-Chain GPT Framework that transforms AI inference on Cardano into a secure, transparent, and high-speed process.

Instead of AI operating as a black box, our framework will log every key element on-chain:

• Prompts & responses for auditability
• Token usage for cost transparency
• Reasoning traces for explainability
• Data-source proofs for trust in inputs
• Session metadata for verifiable context

Prompt and Response Hashes:

User prompts (e.g., “Explain Cardano”) and GPT-generated responses (e.g., text output) are the core data of a GPT interaction. Cryptographic hashes (e.g., SHA-256) of prompts and responses can be processed as transactions.

Token Usage Metadata:

GPT models often track token usage (e.g., number of input/output tokens) for billing, rate limiting, or performance monitoring. For example, a prompt might use 50 tokens, and the response 200 tokens.

Reasoning Traces:

Some GPT models, especially those with advanced reasoning capabilities (e.g., chain-of-thought prompting), generate intermediate reasoning steps (e.g., breaking down a math problem into steps). These traces can be voluminous but could be summarized or hashed for on-chain validation.

Data Source Validations:

If the GPT model uses external data sources (e.g., web search results, knowledge bases), ensuring their authenticity is critical. This could involve validating the source’s origin, timestamp, or content integrity.

Payments and Access Control:

Users may pay in ADA for access to the GPT model (e.g., per prompt or subscription). Access control ensures only authorized users can interact with the model.

Session Metadata:

Metadata about the GPT session, such as session ID, start/end times, or user ID, can be tracked to manage conversations.

Key Benefits:

• Developers gain verifiable logs for compliance and trust.
• Enterprises gain auditable AI interactions suitable for regulated industries.
• The Cardano Community benefits from transparent, cost-efficient AI tools built natively on Cardano.
• End-users can trust that AI responses are backed by verifiable reasoning and secure data sources.

Impact Metrics
We will demonstrate success through measurable outcomes, including:

• Adoption metrics: number of developers integrating the framework.
• Usage metrics: Number of AI prompts/responses logged on-chain.

Applications:

• Healthcare: Auditable AI diagnostics and trusted medical advice.
• Governance: Trustable AI policy advisors and dispute resolution.
• Web3/DeFi: Pay-per-prompt AI with transparent costs on-chain.
• AI Agents: Secure, verifiable agent-to-agent negotiations.
• Enterprise: Compliance-ready AI logs for regulated industries.

Hydra brings scalability and low latency, making real-time AI usage on Cardano practical. By combining on-chain verifiability with Hydra’s high-speed channels, we deliver an infrastructure where developers, enterprises, and the Cardano community can trust AI outputs, track costs, and ensure provenance of data.

[Your Project and Solution] Impact

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

This project positions Cardano as the blockchain for transparent and auditable AI systems, offering unique differentiation in the AI + blockchain space. By combining Hydra’s high-speed channels with AI verifiability, Cardano can provide the global community with secure, trustable AI infrastructure. This directly strengthens Cardano’s ecosystem by attracting developers, enterprises, and research communities seeking AI solutions with regulatory compliance and data provenance guarantees.

Our Hydra-Enabled On-Chain GPT Framework will create tangible value for the wider Cardano ecosystem by introducing verifiable, auditable, and transparent AI infrastructure directly on-chain. The positive impacts include:

Value to the Community

• Trustworthy AI: Every AI interaction is logged and verifiable, enabling enterprises, developers, and regulators to rely on Cardano for compliant AI solutions.
• Developer: we provides SDKs, and documentation so builders can integrate decentralized inference into their dApps.
• Enterprise Adoption: Positions Cardano as the blockchain of choice for regulated industries (healthcare, legal) where explainable AI and auditability are essential.
• Community Growth: Attracts researchers, startups, and enterprises interested in secure AI infrastructure, expanding Cardano’s developer base.

Measuring Impact
We will measure success using clear, trackable metrics:

• Adoption metrics: Number of developers, projects, and enterprises integrating the framework.
• Usage metrics: Number of prompts/responses, reasoning traces, and sessions logged on-chain.
• Performance metrics: Latency benchmarks comparing Hydra vs. standard chain transactions. - Community engagement: Participation in workshops, hackathons, and developer forums.

Sharing Outputs

• Open-source tooling: SDKs, libraries, and reference implementations will be published for free community use.
• Knowledge sharing: Host technical workshops, AMAs, and documentation hubs to onboard developers.
• Collaborations: Partner with Catalyst projects, research groups, and enterprises to ensure real-world adoption.
• Reports and dashboards: Provide transparent reporting on usage, adoption, and cost savings to the Cardano community.

[Your Project and Solution] Capabilities & 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?

Proven Track Record:Our team has deployed blockchain solutions that required meticulous planning and robust technical implementation, recognized for their innovation and impact. Our previous Projects can be found at https://www.nucastlabs.xyz/

Development Team: Our developers have extensive experience in blockchain development, particularly on the Cardano platform. They have contributed to successful Cardano-based projects and are proficient in cardano dapp development.

Strong Partnerships: We have established relationships with key platform operators, service providers, developers, ensuring the solution is well-positioned for adoption and scalability.

Community Engagement: Our team actively contributes to the Cardano community, demonstrating our commitment to the ecosystem’s growth and values.

Budgeting and Financial Reporting: We will maintain a transparent budget and provide for the community according to the catalyst guidelines. Regular updates on our progress, challenges, and milestones will be shared with the Cardano community via forums and social media. We will actively seek and incorporate community feedback.

We will validate our approach through Hydra-enabled testnet deployments, building on our proven experience with Hydra-based subscriptions and a successfully implemented pay-as-you-go SDK.

To ensure trust and accountability, we operate with open-source transparency. All code, smart contracts, and documentation will be released under the MIT License and made publicly available for community review. Development progress will be shared via GitHub, with detailed milestones and deliverables tracked in real time.

[Milestones] Project Milestones

Milestone Title

Project Kickoff & SRS (Software Requirements Specification)

Milestone Outputs

We will complete the initial project setup, ensuring the foundation for all future development. This includes creation of planning documents, and establishing the repository structure. A detailed Software Requirements Specification (SRS) will be drafted, and published, capturing both technical and functional aspects.

Acceptance Criteria

The SRS document is prepared by the internal team, confirming alignment with project scope, technical requirements, and functional specifications. The project repository is created and initialized with defined structure and planning documents, ensuring readiness for development.

Evidence of Completion

Public GitHub repository containing the finalized SRS (PDF).

Repository structure visible with initial setup and planning documents.

Delivery Month

1

Cost

25000

Progress

20 %

Milestone Title

High-level system and component architecture diagrams

Milestone Outputs

We will complete the architecture phase, ensuring the system is well-structured for scalability and integration. This will include the creation of high-level system and component architecture diagrams, along with a clearly defined integration approach for Hydra, GPT agents, and smart contracts. The outputs will serve as the technical blueprint guiding subsequent development.

Acceptance Criteria

The proposed architecture will be prepared by the team to ensure technical feasibility and alignment with project goals. All major modules, components, and data flows must be clearly defined and documented within the project repository, enabling smooth collaboration and reducing ambiguity in later development phases.

Evidence of Completion

Proof of completion will be provided through a dedicated GitHub folder containing the finalized architecture diagrams and supporting documentation.

Delivery Month

2

Cost

25000

Progress

40 %

Milestone Title

Development and Testing

Milestone Outputs

We will develop SDK and deliver a functional prototype that demonstrates Hydra-integrated GPT agent capabilities.

The prototype will validate the end-to-end functionality of decentralized inference on testnet, ensuring that users can interact with the system in a practical and measurable way.

Acceptance Criteria

The prototype built with the SDK must be successfully deployed on the Cardano testnet.

Basic testing scripts, along with a comprehensive README, will be shared publicly in the repository to enable independent verification.

Internal testing will confirm the reliability of transactions, inference flows, and AI execution.

Evidence of Completion

Proof of completion will include publicly accessible testnet transaction links and detailed GitHub commits.

Additionally, a recorded video demo or walkthrough will be published, demonstrating the working Hydra-enabled GPT agent and its interaction with the pay-per-use contracts.

Delivery Month

4

Cost

25000

Progress

70 %

Milestone Title

Final Close-Out

Milestone Outputs

We will complete the project close-out phase by delivering a comprehensive final report that documents the full development journey, outcomes, and lessons learned. A public summary video will be produced to present results in a clear and accessible way for the Cardano community. In addition, all final updates, documentation, and contributions will be made available.

Acceptance Criteria

The final close-out report and summary video will be published. Final posts will be made in Twitter/X, ensuring transparency and visibility of results. Documentation will be covering technical details & usage guides.

Evidence of Completion

Proof of completion will include direct links to the PDF version of the close-out report and the summary video.

Delivery Month

6

Cost

15000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1: Project Kickoff and SRS

Total: 25,000 ADA

Project Manager: 8,000 ADA

Senior Cardano Developer: 12,000 ADA

Operational & Research Costs: 5,000 ADA

Milestone 2: High-level system and component architecture diagrams

Total: 25,000 ADA

Project Manager: 5,000 ADA

Senior Cardano Developer: 15,000 ADA

Junior Cardano Developer: 5,000 ADA

Milestone 3: Development and Testing

Total: 25,000 ADA

Project Manager: 8,000 ADA

Senior Cardano Developer: 12,000 ADA

Junior Cardano Developer: 5,000 ADA

Milestone 4: Final Close-Out

Total: 15,000 ADA

Project Manager: 5,000 ADA

Senior Cardano Developer: 10,000 ADA

[Final Pitch] Value for Money

How does the cost of the project represent value for the Cardano ecosystem?

This project delivers strong value to the Cardano ecosystem by enabling GPT-powered AI agents to run on-chain using Hydra, showcasing the true speed and scalability of Cardano’s infrastructure. It addresses the growing interest in AI while proving that Cardano can handle low-latency, intelligent agents with verifiable outputs anchored to the blockchain.

By making AI logic and outputs transparent, reproducible, and tamper-proof, the project introduces a new paradigm: verifiable on-chain AI. These agents can serve in governance, DAOs, gaming, and data processing bringing trustless intelligence to decentralized apps in a way that centralized AI services cannot.

Built entirely in the open, the code, testnet deployments, and documentation will be publicly available from day one. With a budget aligned with industry-standard development rates this proposal offers high-impact infrastructure at excellent cost-efficiency.

Most importantly, the outcomes are reusable: open SDKs, architecture docs, and testnet deployments will provide long-term value well beyond this project’s lifetime. By funding once, the ecosystem gains a perpetual foundation for verifiable on-chain AI innovation.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes