Decentralized On-Chain Data Encryption

[Proposal setup] Proposal title

Please provide your proposal title

Decentralized On-Chain Data Encryption

[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

12

[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?

We want to solve the encrypted NFT problem by creating a decentralized protocol for encrypting arbitrary data, where only the owner may decrypt the data, all the while maintaining tradability.

[Proposal Summary] Supporting Documentation

Supporting links

• https://www.logicalmechanism.io
,
• https://github.com/logical-mechanism/BLS12-381-Playgound
,
• https://www.researchgate.net/publication/221348480_Divertible_Protocols_and_Atomic_Proxy_Cryptography
,
• https://eprint.iacr.org/2005/028
,
• https://www.sciencedirect.com/science/article/pii/S0304397520305302

[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

GNU General Public License version 3

[Theme Selection] Theme

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

Research

[Campaign Category] Category Questions

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

Our innovation is our decentralised encryption protocol that is open source, secure, and allows tradable assets. Data access to the encrypted content, such as images, videos, or audio, is controlled via complex cryptographic proofs of ownership, allowing only the real owner to decrypt the data. The preservation of tradability implies the transfer of the decryption rights, preventing old owners from accessing the data but allowing a new owner to access it. This type of decentralized digital rights management is entirely new to Cardano.

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

The MVP will demonstrate a fully on-chain end-to-end data encryption flow. A user will encrypt data for some NFT and will store the data inside a smart contract. The original owner will then be able to transfer the decryption rights to a new owner. A publicly available repository will hold all MVP-related items like the required libraries, code, and research documentation. The goal of this MVP is to lay down the foundation for this research to prove that the concept works and applies to current use cases on Cardano.

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

Success for this project is two-fold. First, we will prove mathematically that a bidirectional multi-hop proxy re-encryption ECIES-AESGCM encryption protocol is possible on-chain. This research will be publicly available. Secondly, we will implement the protocol using Aiken and Python. All required code will be working, tested, and publicly available.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Our research will focus on the Elliptic Curve Integrated Encryption Scheme (ECIES), a hybrid encryption protocol. ECIES combines asymmetric cryptography with symmetric ciphers, allowing arbitrary data encryption while using on-chain cryptographic primitives available on Cardano. Our solution will integrate cutting-edge research into the ECIES backbone, adding bidirectional multi-hop proxy re-encryption. The goal for the complete PRE-ECIES-AESGCM protocol is a fully on-chain, decentralized encryption solution, where only the owner may decrypt the data while maintaining tradability via the transfer of the decryption rights. This approach ensures data privacy without relying on centralized entities, aligning with Cardano's decentralized ethos. The solution will benefit creators, collectors, and developers by providing secure, private NFT access, furthering Cardano as the leader in encrypted digital assets.

The project will show what is mathematically possible, will provide the code to use the protocol, and will demonstrate the encryption process inside the MVP on-chain, laying the foundation for future work and integrations into existing projects on Cardano.

[Your Project and Solution] Impact

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

Our solution will bring value to the Cardano community by providing a fully decentralized, privacy-focused encryption system that allows creators, collectors, and developers to securely manage encrypted NFTs without relying on centralized decryption services. The encryption protocol will foster innovation in privacy-preserving digital assets, positioning Cardano as a leader in encrypted digital assets.

We will measure impact through the adoption rate of our solution, tracking the number of encrypted NFTs, and user feedback on security and ease of use. Collaborations with developers and creators within the Cardano ecosystem will determine success. We will release open-source libraries, publish research findings, and provide detailed documentation on all aspects of this project.

[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?

We have extensive experience in smart contracts and cryptographic protocols. We are well-suited to deliver the project with high trust and accountability. Our track record of success includes working with Iagon, Dripdropz, TokenRiot, Cornucopias, and NEWM. Our preliminary research spike demonstrated that our research focus should lead us to a viable solution. We are giving ourselves ample time for this project, 12 months, and expect completion to be sooner than the estimated time.

[Milestones] Project Milestones

Milestone Title

Initial Research Report

Milestone Outputs

A comprehensive technical research report on ECIES, PRE, and AES in the context of on-chain data encryption. The report will include an analysis of the cryptographic primitives, security model, and threat analysis for the encryption/decryption scheme.

Acceptance Criteria

A detailed technical research report covering the encryption scheme, cryptographic primitives, performance considerations, security assumptions, and a threat analysis for the protocol. It will be available in raw markdown and as a PDF on the git repository.

Evidence of Completion

A publicly available report detailing key findings and implications, which will document all the learnings and findings.

Delivery Month

3

Cost

30000

Progress

20 %

Milestone Title

MVP Using Aiken and Python

Milestone Outputs

A MVP implementation of the encryption protocol using Aiken and Python. This milestone includes functional smart contracts and all the required code for happy path interaction. The MVP will undergo testing on-chain using the pre-production network. Tests will validate that NFT data can be securely encrypted and only decrypted by the correct wallet and that the token maintains tradability.

Acceptance Criteria

Demonstrates on-chain feasibility of decentralized encryption and decryption. All smart contracts will compile, all tests will pass, and the required code will work. All of this will be available on the git repository.

Evidence of Completion

Public git repository with tagged release for the MVP and documentation for reproducing tests locally.

Delivery Month

6

Cost

30000

Progress

60 %

Milestone Title

Testing The Encryption Protocol

Milestone Outputs

On-chain tests validating that NFT data can be securely encrypted and only decrypted by the correct wallet while maintaining tradability. Off-chain tests validating the encryption process and functionality.

Acceptance Criteria

Transaction hashes showing the end-to-end flow on the pre-production network and documentation for reproducing tests. All tests should pass, and contracts should compile. Testing will include both the happy and unhappy path.

Evidence of Completion

A list of transaction hashes showing the flow on the git repository and documentation describing how to reproduce the tests.

Delivery Month

9

Cost

30000

Progress

80 %

Milestone Title

Close Out Report And Video

Milestone Outputs

All the progress in the previous milestones will be reported in the form of a closeout video and a closeout report. The video will demonstrate a real interaction with the smart contract and encrypted NFTs.

Acceptance Criteria

Existence of the closeout video and the closeout report, showing all the progress in the previous milestones. The video will demonstrate interacting with the encryption protocol on the pre-production network.

Evidence of Completion

Existance of the closeout video on YouTube and the closeout report on the git repository. Links to the video will be provided in the git repository.

Delivery Month

12

Cost

10000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Research and Development: 12 Months = 100,000 ADA

All funding will be paid to Logical Mechanism LLC. This funding will pay for the cost of research and development of the protocol, and will cover miscellaneous expenses if required.

[Final Pitch] Value for Money

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

Enabling decentralized encryption will be a significant win for the Cardano ecosystem. The cost of this project is insignificant compared to the success it could bring Cardano. Creators, collectors, and developers will now have the ability to securely manage encrypted NFTs, where only the owner may access the content, and the trading of the NFT will result in the transfer of the access right. This is huge with respect to the fields of distributed storage and digital rights management.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes