Bitcoin <> Cardano Atomic Swaps

[Proposal setup] Proposal title

Please provide your proposal title

Bitcoin <> Cardano Atomic Swaps

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

100000

[Proposal Summary] Time

Please specify how many months you expect your project to last

4

[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?

Moving BTC to Cardano and back is slow and expensive. Cardano lacks a fast, trustless path for BTC. Users can't easily swap native BTC into Cardano BTC tokens (cardinal-minted BTC, synthetics).

[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?

No

License and Additional Information

Some of the components will be open source

[Theme Selection] Theme

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

DeFi

[Campaign Category] Category Questions

Describe what makes your idea innovative compared to what has been previously funded (whether by you or others).

Our solution delivers BTC access to Cardano in a way that is both simpler and more cost-efficient than anything previously funded. Unlike prior bridges, we use a lean HTLC-based design with minimal Plutus code, drastically lowering build and operating costs. The core enables wallets, DEXs, and dApps to integrate BTC functionality without starting from scratch, reducing ecosystem-wide costs. This approach is paired with a proven “garden-style” UX that saves users years of transaction time elsewhere, bringing a tested, adoption-focused model to Cardano for the first time.

Describe what your prototype or MVP will demonstrate, and where it can be accessed.

On the testnet, the project will demonstrate a simple and intuitive user interface, similar in style to https://garden.finance, supporting multiple BTC versions on the Cardano side (bridge-agnostic), including Indigo’s iBTC and wrapped bitcoins from the BitVM bridge. It will also showcase an API library designed for seamless integration with wallets and DApps.

Describe realistic measures of success, ideally with on-chain metrics.

• Steady growth in the number of daily active users over a defined period, indicating increased adoption and sustained platform interest.

• Consistent or rising daily transaction volume, reflecting active usage and trust in the platform’s functionality.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Our solution will have a simple intuitive UI, similar to https://garden.finance. It will support different BTC versions on Cardano side (bridge-agnostic), including Indigo's iBTC and wrapped bitcoins from the BitVM bridge. On top of that, we plan to develop an API library for integration with wallets and DApps.

We build a trustless, UX‑friendly swap layer between native BTC and existing BTC tokens on Cardano. Scope clarity: we do not mint or custody any BTC token; we only facilitate swaps.

User flow:

1. Pick tokens and direction (BTC → wrapped BTC on Cardano or wrapped BTC on Cardano → BTC).

2. Get a quote with fees and ETA.

3. Once confirmed, user get's a browser wallet popup to send for funds.

4. Counter-party would lock funds on destination chain, once locked, user's browser would claim funds (no end-user interaction needed). However if counter-party fails to lock funds, automatic refund occurs for end-user.

To achieve this user flow, we utilize Hash Time Locked Contract (HTLC) scripts along with UX improvements to automatically handle for secret management, intermediate bitcoin wallet generation and refunds as further explained below.

-** Automatic secret management**: HTLC scripts require the generation of a secret per swap. However, it would be cumbersome if user is asked to generate such a unique secret for each swap. Our mechanism automates this complexity without requiring any user input.

**- Intermediate bitcoin wallet generation: **Let's say user want to swap from Cardano network to Bitcoin network. Then to claim funds on the Bitcoin network which were locked by counter-party, user would need to sign a transaction as Bitcoin does not natively support expressive smart contracts. This is cumbersome in terms of UX as it requires user to sign for second transaction (first being the one to lock funds on Cardano network). We solve this by the generation of secure, client-side intermediate Bitcoin wallet.

• **Automatic wallet signature and refund management: **If the counter-party fails to lock funds, we would like user to get back their funds. However, since Bitcoin network does not support expressive smart contracts, this necessitates wallet signature from user. This again is cumbersome in terms of UX as we don't more than one wallet popup for end-user. We mitigate this by requiring signature from securely generated client-side intermediate Bitcoin wallet. The way we currently formulate client-side Bitcoin wallet generation, requires user to not change their browser. But mishaps could lead to lose of user browser, refund transaction is generated (since it is deterministic) and stored as soon as user initiates the swap allowing server powered automatic refunds after timelock even user browser is lost.

• **Multi‑asset support: **Users choose which BTC token to receive/send (e.g., Cardinal BTC, Indigo's synthetic BTC, others).

[Your Project and Solution] Impact

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

Our project will deliver tangible, measurable benefits that strengthen Cardano’s position as a user-friendly and economically vibrant blockchain ecosystem:

1. BTC Access & User Choice

• We enable seamless, non-custodial swaps into a variety of BTC representations on Cardano, including Cardinal-minted BTC (https://github.com/input-output-hk/cardinal-spec.)) and Indigo’s synthetic BTC (https://indigoprotocol.io/))
• This removes reliance on a single provider or asset format, giving users the freedom to choose the BTC token that best matches their use case - whether for DeFi, payments, or savings.
• We are increasing the range of DeFi products that can flourish.

2. Faster Onboarding into Cardano DeFi

• Transfers happen quickly, reducing the friction typically associated with moving BTC liquidity into Cardano through traditional bridges.
• This speed advantage directly benefits DEXs, lending platforms, perpetual futures protocols, and payment processors, making them more competitive and attractive to BTC holders from outside ecosystems.
• Quicker onboarding means more BTC can enter active circulation in Cardano’s DeFi markets and more people can participate in Cardano’s DeFi markets.

3. Risk Reduction & Trustless Architecture

• Our solution eliminates the need for centralized custody or operator committees for retail-level flows, minimizing counterparty and governance risks.
• By relying on trustless mechanisms, we align with Cardano’s core values of decentralization and security, ensuring that BTC users maintain control of their assets at all times.
• This creates a safer and more appealing entry point for users who value self-sovereignty and want to avoid opaque, custodial bridge risks.

4. Ecosystem Synergy & Liquidity Amplification

• We integrate seamlessly with existing BTC issuers and bridges, driving usage of already-established BTC representations.
• By making BTC more practically usable on Cardano (for trades, lending, payments), we will generate new revenue streams for multiple stakeholders, from DEX operators to application developers, while making Cardano more attractive to BTC holders globally.

[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?

zkFold is a leading innovator in L1 and L2 scaling for Cardano, specializing in zero-knowledge proofs (ZKPs) to enhance blockchain performance. As one of the strongest experts in both the Cardano ecosystem and zero-knowledge technology, zkFold is driving innovation. With a team of seasoned Haskell, Rust, and ZKP developers, the company is set to deliver on multiple Project Catalyst initiatives.

[Milestones] Project Milestones

Milestone Title

Wallet connect & on-chain code

Milestone Outputs

• A functional web interface featuring a working “connect wallet” button compatible with both Bitcoin and Cardano wallets on the testnet
• On-chain scripts enabling trustless atomic swaps between Bitcoin & Cardano

Acceptance Criteria

Demonstrating a fully functional user interface on the testnet, where users can connect both Bitcoin and Cardano wallets via a working “connect wallet” button, and initiate trustless atomic swaps between the two networks using the implemented on-chain scripts.

Evidence of Completion

We will supply a direct link to the operational user interface, allowing access to the testnet version where users can connect Bitcoin and Cardano wallets and perform trustless atomic swaps via the on-chain scripts.

Delivery Month

1

Cost

30000

Progress

20 %

Milestone Title

The swap UI component & backend

Milestone Outputs

A fully functional swap UI component deployed on the testnet, enabling users to connect supported wallets and execute trustless atomic swaps between Bitcoin and Cardano using the integrated on-chain scripts.

Acceptance Criteria

The delivered swap UI component operates successfully on the testnet, allowing users to connect Bitcoin and Cardano wallets and carry out trustless atomic swaps through the integrated on-chain scripts.

Evidence of Completion

We will share a direct link to the functional swap UI component running on the testnet, enabling users to connect Bitcoin and Cardano wallets and perform trustless atomic swaps using the implemented on-chain scripts.

Delivery Month

2

Cost

30000

Progress

40 %

Milestone Title

"My orders" component & refund functionality

Milestone Outputs

A fully functional “My Orders” component and complete refund logic are implemented and deployed on the testnet, allowing users to seamlessly view active or past orders and execute refunds as designed.

Acceptance Criteria

The “My Orders” component and refund logic perform reliably on the testnet, enabling order tracking and refund operations to be carried out without errors, ensuring full compliance with the task requirements.

Evidence of Completion

We will provide a direct link to the working “My Orders” and refund logic components running on the testnet, allowing verification of correct functionality and confirmation of milestone completion.

Delivery Month

3

Cost

24000

Progress

80 %

Milestone Title

Complete application on the testnet

Milestone Outputs

We will deliver the full application deployed and accessible on the testnet, accompanied by a close-out video showcasing functionality and a close-out report summarizing outcomes, progress, and lessons learned.

Acceptance Criteria

All related documentation (where applicable), including the close-out video and close-out report, is complete, accurate, and publicly accessible, ensuring transparency and allowing stakeholders to review the delivered results.

Evidence of Completion

We will provide a direct link to the complete set of documentation, including the close-out video and close-out report, enabling public access and verification of the completed deliverables.

Delivery Month

4

Cost

16000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Wallet connect & on-chain code - 30,000 ADA

Blockchain developer - 16,000

Project manager - 6,000

Backend developer - 8,000

The swap UI component & backend - 30,000 ADA

Blockchain developer - 14,000

Backend developer - 16,000

"My orders" component & refund functionality - 24,000 ADA

Backend developer - 16,000

Senior Blockchain developer - 8,000

Final milestone - 16,000 ADA

Backend developer - 16,000

Total: 100,000 ADA

[Final Pitch] Value for Money

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

Our project is designed to deliver maximum impact at minimal cost, ensuring that every ADA of funding translates into sustainable benefits for the ecosystem:

Lean, Cost-Efficient Architecture

• Built on standard Hashed Time-Lock Contracts (HTLCs) and a minimal Plutus footprint, our design avoids costly complexity and over-engineering.
• More budget is directed toward features and integrations that deliver direct value to users, rather than being consumed by infrastructure overhead.

Open Source Core for Broad Reuse

• All smart contracts, SDKs, and documentation will be released under an open-source license, allowing the wider Cardano developer community to integrate BTC functionality without paying for closed, proprietary solutions.
• Wallets, DEXs, and dApps can adopt our codebase with minimal adaptation effort, cutting down integration costs and accelerating time-to-market.
• The reusable design ensures long-term ROI for the entire ecosystem, as the same infrastructure can serve multiple projects without re-investment.

Proven UX Thesis with Measurable ROI

• A well-designed UX directly increases adoption, trading volumes, and liquidity - key metrics that strengthen Cardano’s DeFi economy.
• By applying this tested approach to Cardano’s BTC tokens, we maximize the likelihood of fast adoption and strong returns on community investment.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes