[Proposal setup] Proposal title

Please provide your proposal title

DiamondHooves<>Adaxon: Elevating NFTs with Private Chatbots

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

45000

[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?

DiamondHooves CNFT community lacks secure AI chatbots for personalized engagement, limiting interaction and growth. We aim to optimize CNFT engagement in DiamondHooves with private personalization.

[Proposal Summary] Supporting Documentation

Supporting links

• https://www.youtube.com/watch?v=0VdLDrW-NrE
,
• https://x.com/DiamondHoovesio
,
• https://x.com/adaxon_labs
,
• https://diamond-hooves.gitbook.io/diamond-hooves
,
• https://jbba.scholasticahq.com/article/94452-towards-confidential-chatbot-conversations-a-decentralised-federated-learning-framework

[Proposal Summary] Project Dependencies

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

Yes

Describe any dependencies or write 'No dependencies'

Yes, this project depends on collaboration with the Diamond Hooves community for insights, feedback, and support. Technical dependencies include cloud services for chatbot deployment and integration with Cardano's ecosystem.

[Proposal Summary] Project Open Source

Will your project's outputs be fully open source?

Yes

License and Additional Information

Yes, all outputs from this project will be fully open source. This approach promotes transparency, encourages community contributions, and allows for broader adoption and collaboration within the Cardano ecosystem.

[Theme Selection] Theme

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

CNFT

[Campaign Category] Category Questions

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

HarmonyAI is innovative because it uniquely combines secure, privacy-centric AI with federated learning in the NFT space, something not seen in previous Catalyst-funded projects.

While prior funded efforts in Cardano AI have explored chatbots or NFT utility, none have integrated federated learning to train AI models without centralizing user data, nor applied it in a live NFT community context. Our approach ensures sensitive user interactions remain encrypted, anonymized, and fully consent-driven while still improving the AI through distributed learning.

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

Our prototype will demonstrate a privacy-focused chatbot integrated within the Diamond Hooves NFT ecosystem, showcasing secure, personalized AI interactions powered by federated learning. Users can experience real-time, tailored responses while their data remains private and encrypted. The MVP will be accessible through the Diamond Hooves Community Discord and linked to their NFTs, allowing community members to seamlessly interact with the chatbot and provide feedback to refine the experience.

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

Success is measured by on-chain interactions such as ≥20 contract transactions and ≥50 unique wallet addresses engaging with the chatbot. Federated learning rounds will be tracked with ≥3 aggregation events recorded on-chain. User engagement targets include ≥30 active users and ≥500 chatbot messages. Privacy will be ensured with encrypted data and user opt-in protocols. Community uptake will be measured via ≥20% NFT holders using the bot and positive user feedback (≥4/5 rating), demonstrating initial adoption and impact.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Diamond Hooves is creating a next-generation gamified racing ecosystem on the Cardano blockchain, where players compete in strategic horse races, breed new champions, rent or trade NFT assets, upgrade stables and land plots, and participate in a player-driven economy. At its core is the $DMND token: a deflationary digital currency designed with multiple in-game use cases and integrated burn mechanisms. Players spend $DMND for race entry fees, stable, land, and equipment upgrades, cooldown reductions, and marketplace transactions, with portions of these tokens permanently removed from circulation, increasing scarcity and reinforcing long-term value. Additional token demand is generated through staking rewards, liquidity pool participation, and rental markets, creating a sustainable loop that benefits active players and long-term holders alike.

To elevate engagement, accessibility, and community retention, we are introducing HarmonyAI: a secure, privacy-first chatbot powered by cutting-edge federated learning. This AI assistant, trained on Diamond Hooves–specific datasets, will provide personalized gameplay guidance, race performance tips, NFT management support, and community updates, all without centralizing sensitive user data. HarmonyAI will streamline onboarding for new players, improve strategic decision-making for veterans, and foster a more vibrant, active community. Beyond Diamond Hooves, this initiative represents a pioneering integration of decentralized AI within Cardano’s NFT ecosystem, offering a replicable model for other projects seeking to combine blockchain gaming, tokenized economies, and privacy-preserving AI to deliver richer user experiences and drive wider adoption across the network.

The solution unfolds in three progressive milestones:

1. Initial Development and Internal Testing: We will develop an initial version of the HarmonyAI chatbot, tailored specifically to the Diamond Hooves community. This early prototype will be trained on Diamond Hooves-specific datasets, enabling it to provide relevant responses related to the NFT ecosystem, horse performance tips, community updates, and gameplay assistance. This version will be deployed internally within the Diamond Hooves core team to collect detailed feedback and identify usability issues or feature gaps. Internal testing allows us to fine-tune the chatbot’s responses, improve interaction quality, and ensure technical stability before public exposure.
2. Federated Learning Pre-Beta Testing: The next phase involves integrating federated learning capabilities, enabling the deployment of multiple chatbot instances across selected users within the Diamond Hooves community. Federated learning will allow the chatbot to learn and improve collectively from decentralized user interactions without transmitting raw personal data to a central server. This approach ensures privacy preservation while enhancing the chatbot’s accuracy and personalization. During this phase, performance data and user feedback will be collected and analyzed to iteratively improve the primary chatbot version, refining its conversational abilities and relevance to community needs.
3. Community-Wide Beta Testing: The final development milestone involves releasing the optimized chatbot to the wider Diamond Hooves community. This broader beta testing phase is designed to gather extensive user feedback, validate scalability, and assess the chatbot’s real-world impact on community engagement. We will implement iterative improvements based on user suggestions, with a focus on enhancing responsiveness, relevance, and usability. The chatbot will assist users by answering questions, offering personalized tips for NFT-based horse performance, and facilitating community events and updates. This phase will culminate in a stable, feature-rich HarmonyAI chatbot ready for long-term integration within the Diamond Hooves ecosystem.

Value Proposition

HarmonyAI goes beyond traditional chatbot applications by pairing NFTs with decentralized AI in a privacy-first manner. It serves as a pioneering use case on the Cardano blockchain, showcasing how federated learning can enable intelligent, personalized AI services without centralizing sensitive user data. This innovation enhances the overall user experience within the Diamond Hooves NFT community and sets a precedent for similar applications across the broader Cardano NFT (CNFT) ecosystem.

• Security and Privacy Measures:
• All data exchanged between users and the chatbot is encrypted end-to-end to protect sensitive information from interception.
• Clear user consent protocols will be implemented, allowing community members to opt-in explicitly for data sharing used to improve chatbot performance.
• Training data for improving the chatbot will be anonymized, preventing the exposure of personally identifiable information (PII) and ensuring compliance with privacy regulations and community trust.
• Federated learning enables model improvements across decentralized devices, minimizing data centralization risks and reinforcing user privacy.

Technical Overview:

• The chatbot backend is built to integrate seamlessly with the Cardano blockchain, ensuring native compatibility and security.
• Federated learning architecture is designed to distribute model training across user devices or secure environments, collecting only model updates rather than raw data.
• The system includes modular components for AI inference, blockchain interaction, and user interface, enabling flexible upgrades and scalability.
• Deployment will be initially through the Diamond Hooves Discord server and NFT interface, providing easy community access.

[Your Project and Solution] Impact

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

Integrating HarmonyAI within the Diamond Hooves community is set to create a ripple effect throughout the wider Cardano ecosystem. Here’s how:

Imagine a personalized AI chatbot that knows your preferences and can provide tailored assistance. This integration is designed to make interactions within the Diamond Hooves NFT community much more engaging, helping members connect and participate actively.

By leveraging federated learning, this project is pushing the boundaries of what's possible in the NFT space. It’s not just about pretty pictures; it’s about showcasing how Cardano can support cutting-edge AI applications, which might inspire other developers to explore similar avenues.

Other advantages:

• Privacy First: With federated learning, users can feel confident that their data isn’t just sitting in one place, which helps build trust—a crucial element in any community.
• Elevating Cardano's Status: Successfully demonstrating this innovative use case can put Cardano on the map as a go-to platform for advanced applications. It’s like showing the world that Cardano can play in the big leagues, attracting attention from other projects and partnerships.
• Empowered Communities: With real-time assistance from the chatbot, community members will have their questions answered and issues resolved instantly. This empowerment can foster a culture of collaboration and shared success, benefiting the entire Cardano network.
• Knowledge Sharing: Being the first project to combine AI and NFTs on Cardano opens the door to valuable insights. We plan to document our journey and share lessons learned, giving other developers a roadmap for exploring decentralized AI on Cardano. This collaborative spirit can spark even more innovation in the ecosystem.

In a nutshell, this integration is more than just a chatbot - it's a significant step towards showcasing the potential of Cardano for decentralized, privacy-first AI applications. The benefits extend far beyond the Diamond Hooves community, setting the stage for a thriving, interconnected ecosystem.

[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?

Our team consists of highly skilled professionals with expertise in relevant fields, ensuring our capability to deliver the HarmonyAI project with high levels of trust and accountability.

Dr. Bharath Ramesh, Ph.D. in Computer Science

As the CEO of Adaxon, Dr. Ramesh is a pioneering academic at the intersection of artificial intelligence and blockchain. His expertise in developing trustless federated frameworks is evident in his publication on decentralized and confidential deep learning. Leading the HarmonyAI project, he is dedicated to applying technology for societal impact, particularly in revolutionizing mental health support on the Cardano blockchain. With a strong background in AI and decentralized systems, he is shaping the future of technology.

Mr. Nitish Sri Ram, Blockchain Lead, Adaxon

Nitish has demonstrated exceptional coding proficiency, contributing significantly to our team throughout the past year. His expertise in functional programming languages, particularly Haskell and C/C++, positions him as a valuable asset for steering our development efforts within Cardano's programming language. Hongxu's commitment and skills enhance our team's capabilities, ensuring we can navigate the intricacies of Cardano's programming landscape.

Mr. Parth Hanchate, AI Lead, Adaxon

Parth brings expertise in artificial intelligence, focusing on developing innovative AI solutions that align with our project goals. His experience will be critical in enhancing the chatbot's functionalities through federated learning.

Speechmoor, CEO, Diamond Hooves

Speechmoor is the Co-founder and CEO of Diamond Hooves and a PhD student in Applied Microeconomics, specializing in behavior, incentive schemes, and token-based economies. With 15 years of experience in analytics roles at Fortune 500 companies, Speechmoor blends academic insight with practical expertise. His work at Diamond Hooves focuses on developing innovative token-based economic models that drive user behavior and optimize incentives within the gamified racing ecosystem

Vince, COO, Diamond Hooves

Vince Rijken is the COO and Cofounder of Diamond Hooves and brings over a decade of operational expertise to the team. At Diamond Hooves, Vince oversees the operational and community strategies, ensuring seamless execution and scalability within the growing gamified racing ecosystem. His focus on efficiency and team management is key to driving Diamond Hooves’ success.

Proven Track Record

Adaxon's track record includes the successful development of projects like Fetachain - Cardano IIoT Framework in Fund 9.

[Milestones] Project Milestones

Milestone Title

Initial Development and Internal Testing

Milestone Outputs

Develop and deploy a fully functional initial version of the HarmonyAI chatbot tailored to the Diamond Hooves community. Conduct internal testing with the core team to identify usability issues and gather detailed feedback for improvements.

Acceptance Criteria

Successful deployment and operational use of the chatbot within the Diamond Hooves core team. Collection of comprehensive and constructive feedback from at least 5 core team members. Implementation of initial optimizations based on the collected feedback to improve chatbot performance and user experience.

Evidence of Completion

An internal feedback report documenting detailed user experiences, issues encountered, and suggestions for improvement from the core team. A subsequent updated chatbot version reflecting the optimizations and bug fixes made after feedback analysis.

Delivery Month

1

Cost

5000

Progress

20 %

Milestone Title

Federated Learning Implementation

Milestone Outputs

Integrate federated learning technology into the HarmonyAI chatbot, creating secondary chatbot versions for decentralized training. Deploy these versions for testing to improve personalization while preserving user data privacy.

Acceptance Criteria

Successful deployment of multiple federated learning-enabled chatbot versions for real-world testing. Collection and analysis of performance data and user feedback from at least 10 selected community members, demonstrating measurable improvements in the chatbot’s functionality and personalization.

Evidence of Completion

Successful deployment of multiple federated learning-enabled chatbot versions for real-world testing. Collection and analysis of performance data and user feedback from at least 10 selected community members, demonstrating measurable improvements in the chatbot’s functionality and personalization.

Delivery Month

3

Cost

10000

Progress

40 %

Milestone Title

Community Beta Testing

Milestone Outputs

Launch the optimized HarmonyAI chatbot for wide beta testing within the Diamond Hooves community. Collect extensive feedback and usage data to evaluate chatbot performance and user satisfaction on a larger scale.

Acceptance Criteria

Achieve positive feedback from at least 30% of active community participants. Implement a minimum of three iterative improvements based on community suggestions. Demonstrate increased engagement and chatbot utility within the user base.

Evidence of Completion

Comprehensive feedback report documenting user experiences, suggestions, and issues encountered during the beta phase. Documentation of chatbot improvements made in response to user input, showcasing the iterative refinement process.

Delivery Month

5

Cost

25000

Progress

90 %

Milestone Title

Project Closeout and Evaluation

Milestone Outputs

Complete a thorough evaluation of the HarmonyAI integration project. Produce a comprehensive final report summarizing achievements, challenges faced, lessons learned, and recommendations for future development or scaling.

Acceptance Criteria

Finalize and submit a detailed project report to all stakeholders. Conduct a closing meeting to review project outcomes and discuss opportunities for future collaboration and continued development beyond this project phase.

Evidence of Completion

Final project report delivered, including all key insights and documentation of the project lifecycle. Meeting minutes from the closing session, confirming stakeholder engagement and consensus on next steps.

Delivery Month

6

Cost

5000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Budget Costs and Breakdown

Total Budget: 45,000 ADA

Milestone 1: Initial Development and Internal Testing - Amount: 5,000 ADA

1. Development & Personnel: 2,500 ADA (Design, coding, initial chatbot training, testing within core team)
2. Server & Hosting: 2,500 ADA (Cloud resources and infrastructure for internal testing)

Milestone 2: Federated Learning Implementation - Amount: 10,000 ADA

1. Development & Personnel: 6,500 ADA (Integration of federated learning, secondary chatbot deployment, data collection)
2. Server & Hosting: 3,500 ADA (Hosting for federated learning nodes, performance data processing)

Milestone 3: Community Beta Testing - Amount: 25,000 ADA

1. Development & Personnel: 12,000 ADA (Optimizations based on pre-beta results, deployment for wider community beta)
2. Community Engagement & Marketing: 13,000 ADA (Promotions, onboarding, community support, feedback collection)

Milestone 4: Project Closeout and Reporting - Amount: 5,000 ADA

1. Personnel Costs: 2,000 ADA (Final evaluations, reporting, documentation preparation)
2. Reporting & Documentation: 1,500 ADA (Compiling lessons learned, best practices, future recommendations)
3. Contingency Fund: 1,050 ADA (Reserve for unforeseen expenses or final adjustments)

[Final Pitch] Value for Money

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

The costs associated with the HarmonyAI project are thoughtfully aligned with the substantial value it offers to the Cardano ecosystem. Each financial allocation has been carefully estimated based on industry benchmarks, the expertise of our team, and the anticipated deliverables, making this an investment in a robust and scalable mental health support solution.

• The costs associated with HarmonyAI are proportionate to the complexity of the project and the expertise required for successful execution.
• They are consistent with industry benchmarks for similar blockchain and AI development initiatives, ensuring competitive pricing while maintaining quality.
• The allocation of funds reflects a commitment to excellence, security, and community engagement, guaranteeing that the project will deliver substantial value to the Cardano ecosystem.

Alignment with Cardano Ecosystem

1. Cardano-Centric Development - Our decision to port the chatbot functionality to Plutus demonstrates a strong commitment to utilizing Cardano's native smart contracts. This not only ensures seamless integration but also enhances the security and reliability of the HarmonyAI solution within the Cardano framework.
2. Security and Performance - Milestone 2 focuses on rigorous testing to validate the federated learning concept. This aligns with Cardano’s priority on security, contributing to the overall robustness of the ecosystem by ensuring our solution meets high-performance standards.
3. Community Engagement - Funds allocated for community testing in Milestone 3 underscore our Cardano-centric approach, emphasizing community involvement and ownership of the HarmonyAI project. Engaging the Diamond Hooves community fosters collaboration and increases the solution’s relevance and usability.
4. User-Centric Design - Resources set aside for user feedback and iterative improvements in Milestone 4 adhere to Cardano’s user-centric philosophy. This commitment to enhancing the overall user experience will make the HarmonyAI chatbot a valuable tool for community members.

Overall, the strategic investment in the HarmonyAI project guarantees tangible value for the Cardano ecosystem, making it a judicious and impactful use of resources.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes