ZK-Stables: USDC/USDT Non Custodial Bridge

[Proposal setup] Proposal title

Please provide your proposal title

ZK-Stables: USDC/USDT Non Custodial Bridge

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

85000

[Proposal Summary] Time

Please specify how many months you expect your project to last

5

[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?

Cardano lacks native USDC/USDT. Liquidity is fragmented and depends on custodial bridges. A non-custodial, zk-verified bridge will bring USDC/USDT liquidity to Cardano and unlock DeFi growth.

[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

Interoperability

[Campaign Category] Category Questions

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

License: MIT License – a widely adopted, permissive open source license.

Rationale:

Maximizes adoption by allowing unrestricted use, modification, and distribution.

Compatible with both commercial and non-commercial projects, encouraging ecosystem integration.

Minimal legal overhead, making it accessible to global contributors.

Aligns with Cardano’s open innovation goals by enabling forkability and reuse.

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

Host all code in a public GitHub repository from project inception.

Tag and document each milestone with clear changelogs.

Provide readme, contribution guidelines, and developer docs to ensure easy onboarding.

How will you provide high quality documentation?

Maintain a full documentation site (e.g., Docusaurus) with user and developer guides.

Include setup instructions, API references, and architecture diagrams.

Use Markdown for easy version control and community edits.

Record video walkthroughs and host workshops.

Keep docs updated with each release and tag changes in repo.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Problem Perception:

Cardano currently lacks a native, non-custodial way to bridge USDC/USDT, forcing users into custodial routes that fragment liquidity, add delays, and increase trust assumptions. This limits DeFi growth, reduces capital efficiency, and discourages stablecoin-heavy strategies from entering the ecosystem.

Proposed Approach:

ZK-Stables introduces a non-custodial bridge leveraging zk-verified light clients through Midnight. This design ensures verifiable, privacy-preserving cross-chain transfers without relying on multisigs or custodial agents. The architecture combines Cardano smart contracts for mint/burn logic with Midnight’s zk-SNARK proofs for secure header verification and event finality.

How It Works:

On each chain, a light-client contract validates succinct proofs of finalized headers via Midnight.

Once a lock/burn event is proven, Cardano mints/releases the equivalent asset.

Liquidity is pooled non-custodially and rebalanced programmatically with MEV-aware routing to minimize slippage.

Key Features:

• Liquidity: Pooled liquidity with fast exits and programmatic incentives.
• Security: zk-SNARK-powered privacy, selective disclosure, rate limits, state machines, fuzz testing, and audits.
• UX: One-click widget and SDK, real-time fee/finality estimates, progress indicators.
• **Cardano + Midnight synergy: **Privacy-preserving proofs with Cardano handling mint/burn and pool logic.

Engagement & Impact Proof:

We will collaborate with wallets, DEXs, and dApps for integration pilots, conduct public incentivized testnets, and track on-chain metrics (volume, liquidity depth, adoption rate) to demonstrate impact. Workshops, developer docs, and SDK releases will enable community adoption beyond the initial integrations.

Uniqueness & Importance to Cardano:

Unlike custodial bridges, ZK-Stables is verifiable, privacy-preserving, and modular, enabling broad reuse in other cross-chain flows. By unifying stablecoin liquidity and lowering friction for entry, it enhances Cardano’s competitiveness as a DeFi hub, unlocking speed, efficiency, and trustless access for global users.

[Your Project and Solution] Impact

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

ZK-Stables brings immediate, meaningful liquidity to Cardano by enabling USDC/USDT inflows without custodial bottlenecks. More stablecoin depth boosts TVL, tightens spreads, and lifts DEX volumes, making swaps, lending, and payments cheaper and more predictable for everyday users and institutions.

For builders, we open up composability. The bridge’s open circuits, verifiers, and SDKs let dApps trigger cross chain lock mint burn flows natively with clear interfaces and examples. That lowers integration time, encourages experimentation, and helps new services such as aggregators, wallets, and payment rails plug into stable liquidity from day one.

Users gain trust and reach. By removing opaque multisignature signers and replacing them with verifiable on chain proofs, we cut custodial risk while keeping UX simple. The chain agnostic design invites cross ecosystem users and partners, and the model shares fees with LPs and community funds to sustain operations and growth, aligning incentives for the long run.

Value to the Cardano Community:

ZK-Stables will increase Cardano’s DeFi competitiveness by delivering non-custodial USDC/USDT inflows without centralized bottlenecks. This deeper stablecoin liquidity will:

• Boost TVL, tighten spreads, and increase DEX volumes.
• Make swaps, lending, and payments cheaper and more predictable for retail and institutional users.
• Enable builders to integrate trustless cross-chain flows via open circuits, verifiers, and SDKs—reducing integration time and encouraging innovation.

How We Will Measure Impact:

• **Quantitative: **TVL growth in stablecoin pools, reduction in average swap slippage, cross-chain transfer volume, number of integrations (wallets, dApps, DEXs), LP participation rate.
• Qualitative: Developer feedback on integration ease, user satisfaction surveys, and adoption case studies.

How We Will Share Outputs:

All code and SDKs released under MIT license in a public GitHub repo from project start.

Comprehensive documentation, reference implementations, and example integrations published on a public docs site.

Regular progress updates via Cardano forum and X.

Public workshops and recorded walkthroughs to accelerate adoption by ecosystem partners.

[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?

Dextr Labs – https://dextrlabs.com/ – is a team of 25 experienced developers and blockchain engineers with deep expertise in delivering secure, scalable Web3 infrastructure. Over the past two years, we have launched multiple production-grade products with a 100% delivery rate, building long-term client relationships through consistent, high-quality results.

Our portfolio includes Zodor (https://www.zodor.io/),,) a Real-World Asset (RWA) tokenization platform, and BePay (https://bepay.money/),,) a stablecoin-powered payments system. These products demonstrate our capability to integrate complex smart contracts, stablecoin liquidity management, and cross-chain interoperability key competencies for delivering ZK-Stables.

We bring proven experience in developing Subnets, appchains, and privacy-preserving integrations on Cardano, EVM-compatible chains, and other blockchain platforms. Our delivery approach ensures trust and accountability through:

Public GitHub repos with milestone tracking and open-source licensing.

Transparent communications via Cardano forums, social channels, and developer updates.

Independent testing & audits, plus incentivized testnets to validate functionality before mainnet launch.

By leveraging our technical depth and live product experience, we can deliver ZK-Stables with the same reliability and ecosystem value we’ve provided in prior high-impact deployments.

[Milestones] Project Milestones

Milestone Title

Project Initiation

Milestone Outputs

Landscape Review of non-custodial bridge designs, Midnight capabilities, current USDC/USDT routes, liquidity gaps, and regulatory considerations.

Technical Assessment of ZK light-client approach, proving systems, Cardano & Midnight script budgets, relayer needs, and monitoring setup.

Requirements Documentation (functional & non-functional specs) for circuits, on-chain verifiers, bridge core, liquidity pools, SDKs, wallets, and docs.

Acceptance Criteria

A comprehensive launch document is produced, defining:

• Project boundaries and measurable success metrics.
• All technical feasibility assessments are complete and validated.

Risks are fully identified, including:

• Chain reorganizations.
• Liquidity constraints.
• Relayer availability.
• Fee volatility.
• Initial mitigation strategies are documented for all identified risks.
• Functional and non-functional specifications are finalized for:
• Circuits and verifiers.
• Bridge core contracts.
• Liquidity pools.

Evidence of Completion

Launch Document published in public repository

Public repository shows full transparency for Scope and requirements

Delivery Month

1

Cost

21250

Progress

10 %

Milestone Title

Architectural Planning

Milestone Outputs

Feasibility Assessment Report with:

• End-to-end cross-chain workflow design (lock → proof → mint/release, burn → proof → unlock).
• Contract interfaces, SDK function surface, wallet integration points, and relayer endpoints.
• Risk evaluation & mitigations for reorgs, chain halts, proving latency, and privacy leaks.

System Architecture Blueprint:

• Diagrams of circuit modules, verifiers, bridge core, pools, relayer, and state machines.
• Component descriptions, responsibilities, and interfaces.

Acceptance Criteria

Architecture validated to meet all Milestone 1 requirements.

Integration-ready design supporting wallets, dApps, and other chains without custom forks.

Documented fallback strategies and dependency management.

Robustness and scalability addressed, including crash safety and transport security.

Evidence of Completion

Feasibility Report and Architecture Blueprint published in the public repository.

All architecture diagrams and technical descriptions included.

Delivery Month

2

Cost

21250

Progress

40 %

Milestone Title

Development

Milestone Outputs

Prototype Core Components:

• ZKcircuits and on-chain verifiers on Midnight testnet and Cardano pre-prod.
• Bridge core contracts (lock/mint/burn), pooled-liquidity module, and relayer prototype.
• TypeScript SDK alpha, one-click widget, and minimal bridge demo dApp.

Development Environment:

• Local/devnet scripts, synthetic headers/events, and faucet wiring.
• Unit and integration test suites for main flows and error handling.

Acceptance Criteria

End-to-end demo between Midnight ↔ Cardano testnets with confirmations and state synchronization.

Prototype integrates cleanly with wallets, contracts, and relayer.

Stable sandbox environment with reproducible CI results and no critical crashes.

Evidence of Completion

Prototype documentation and usage guides published in repo.

Passing CI badge visible in repository.

Demo recording, test reports, and tagged alpha release available publicly.

Delivery Month

4

Cost

21250

Progress

70 %

Milestone Title

Testing, Launch, and Project Closeout

Milestone Outputs

Load testing results, latency and throughput benchmarks.

SDK release, integration playbooks, full documentation website on gitbook, and developer onboarding workshops with recordings.

Project Closeout reports

Acceptance Criteria

15-day testnet uptime target met with incident postmortems published.

Proof/verify costs and settlement latency within documented budgets.

At least 2 internal POCs and dev examples completed successfully.

Project Close out Report and Video

Evidence of Completion

SDK packages registered and publicly available.

Documentation site, final report, and recorded workshops linked from project README.

Project Close out Report and Video

Delivery Month

5

Cost

21250

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1 – 21,250 ADA

Midnight ZK Dev: 6,250 ADA

Senior Cardano Developer: 15,000 ADA

Milestone 2 – 21,250 ADA

Midnight ZK Dev: 6,250 ADA

Senior Cardano Developer: 15,000 ADA

Milestone 3 – 21,250 ADA

Midnight ZK Dev: 6,250 ADA

Senior Cardano Developer: 15,000 ADA

Final Milestone – 21,250 ADA

Midnight ZK Dev: 6,250 ADA

Senior Cardano Developer: 15,000 ADA

Grand Total: 85,000 ADA

[Final Pitch] Value for Money

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

This project represents a cost-efficient investment for the Cardano ecosystem by delivering a reusable, non-custodial USDC/USDT bridge that will benefit multiple projects and partners beyond the initial deployment. The funding directly supports research, architecture design, development, security audits, and onboarding resources, creating infrastructure that will continue to generate value for years without repeated large investments.

We have structured the budget to cover only essential development and delivery activities, optimized through in-house expertise, open-source components, and lean processes. Comparable EVM-based solutions typically require 30–50% higher development costs due to additional licensing, infrastructure, and contractor overheads. By eliminating these inefficiencies, we maximize the ROI-per-ADA spent.

The resulting solution expands Cardano’s reach by enabling fast, secure, and trustless inflows of stablecoin liquidity. This increases TVL, deepens liquidity pools, tightens spreads, and improves the user experience for swaps, lending, and payments—benefiting both end-users and DeFi builders.

Because the bridge architecture is modular and reusable, additional integrations and onboarding campaigns can be launched at minimal cost, compounding the return on the initial investment and ensuring long-term ecosystem growth.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes