Gero - ZkFiat: The Future of Confidential Compliance

[Proposal setup] Proposal title

Please provide your proposal title

Gero - ZkFiat: The Future of Confidential Compliance

[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?

Users must choose between privacy and regulatory compliance, revealing personal data in traditional KYC processes, which hinders blockchain adoption and contradicts the privacy values users cherish.

[Proposal Summary] Supporting Documentation

Supporting links

• https://www.gerowallet.io/post/what-is-zk-fiat
,
• https://www.youtube.com/watch?v=-hiy_UsEcVg

[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

We are not planning to open source this project at this POC stage

[Theme Selection] Theme

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

Privacy

[Campaign Category] Category Questions

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

ZK Fiat uses zero-knowledge proofs to enable private fiat transactions on Cardano. Unlike existing solutions, it implements decentralized identity where users hold KYC proof, wallets generate bankIDs without seeing KYC data, and banks verify without knowing user-bank relationships. This eliminates central data control while enabling direct bank-blockchain integration via Satchel.eu partnership.

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

The MVP will demonstrate zero-knowledge proof fiat transactions, privacy-preserving KYC verification, and seamless bank account linking to Cardano wallets. It will be accessible through Gero Dashboard platform with Satchel.eu bank integration. The system allows users to make fiat-backed blockchain transactions while maintaining complete privacy of their financial details.

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

Success metrics include: number of ZK-proof verified transactions on Cardano, volume of fiat-backed transactions processed, unique wallet addresses using ZK Fiat, transaction growth rate, and gas efficiency of ZK verifications. Additional metrics: bank accounts linked via API, active KYC proof holders, and successful privacy-preserved verifications without data breaches.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

zkFiat is unique because it harmonizes regulatory compliance with user privacy without centralizing user data. By ensuring that only users hold all their personal information, we eliminate single points of failure and reduce the risk of data breaches. We are already working with a European bank, which demonstrates the practical applicability and effectiveness of our solution in real-world financial systems. Our solution leverages zero-knowledge proofs within the Cardano blockchain, making it a pioneering approach in privacy-preserving compliance.

Described Solution

zkFiat introduces a decentralized mechanism where only the user holds all necessary information for compliance. No single entity has complete access to user data, preserving privacy while ensuring compliance.

User:

• Receives a KYC proof from the bank.
• Obtains a unique User ID from the bank.
• Receives a Bank ID from Gero.
• Holds all the information securely.

Wallet:

• Does not have access to KYC information and cannot verify the proof.
• Receives the User ID from the bank.
• Generates a Bank ID corresponding to the User ID.

Bank:

• Holds KYC information securely.
• Cannot verify the proof independently.
• Does not know that the User ID and Bank ID are related.
• If the user is verified, the transaction is created and can then be signed by the user. This decentralized knowledge approach keeps information secure and private, enabling seamless, compliant transactions without revealing personal data to the bank.

This architecture ensures:

• Enhanced Privacy: Users comply with regulations without disclosing personal information.
• Regulatory Compliance: Financial institutions process transactions confidently, meeting compliance standards without handling sensitive data.
• Decentralization: Eliminates single points of failure or data breaches.

[Your Project and Solution] Impact

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

Who Will Benefit and Why This Is Important to Cardano

Users: Gain the ability to transact securely and privately, complying with regulations without sacrificing confidentiality.

Financial Institutions: Can process compliant transactions confidently without the burden of handling sensitive personal data.

Cardano Ecosystem: Enhances its value proposition by offering advanced privacy solutions, attracting more users and institutions, and fostering innovation.

Prototype Development and Testing: Creating a functional prototype that showcases the effectiveness of zkFiat in real-world scenarios.

User Adoption Metrics: Tracking the number of users and transactions processed using zkFiat.

Partnerships with Financial Institutions: Establishing collaborations to validate the practicality and compliance of our solution.

Community Feedback: Engaging with the Cardano community for continuous improvement based on user experiences and suggestions.

[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?

Gerowallet won Cardano's first Hackathon hosted by NMKR in Berlin with zkFiat demonstrating a proof of concept of this idea.

We are in the middle of creating a bank integration with our partners, Satchel.eu https://projectcatalyst.io/funds/13/cardano-use-cases-concept/gerowallet-bank-api-and-wallet-integration

We successfully fullfilled all of Cardano Shield milestones, a Catalyst fund10 project which is a wallet security addon.

Our team comprises experienced professionals with a proven track record in blockchain development, financial integrations, and security compliance.

We successfully led multiple blockchain projects from inception to deployment, ensuring they meet deadlines and compliance requirements. Our UX is known to be user-friendly interfaces for fintech applications, enhancing user adoption and satisfaction.

Satchel, founded in 2018, is one of Europe's fastest-growing digital banking providers offering fast, reliable, and cost-effective payment processing solutions. With 8 Billion EUR turnover in 2023, regulated by the National Bank of Lithuania (LB000448) and authorized to operate across the EU. Satchel operates its own cryptocurrency exchange & OTC desk Kaiserex.

Committed to personalized service, it offers European IBAN accounts, SEPA and SWIFT payment processing, Mastercard-powered payment cards.

[Milestones] Project Milestones

Milestone Title

Team Assembly and Technical Design

Milestone Outputs

• Assemble core development team
• Complete technical architecture design for zkFiat MVP
• Select appropriate ZKP protocol (zk-SNARKs or zk-STARKs)
• Define banking partner API requirements
• Create technical documentation and development roadmap

Acceptance Criteria

• Development team in place and onboarded
• Technical architecture documented
• ZKP protocol selected with justification
• Banking API requirements defined
• Clear development roadmap established and signed

Evidence of Completion

• Team member profiles and signed contracts
• High-level architecture summary (non-technical)
• Confirmation letter from banking partner
• Public roadmap with milestone dates only

Delivery Month

1

Cost

15000

Progress

20 %

Milestone Title

MVP Development and Banking Integration

Milestone Outputs

• Build functional zkFiat MVP with zero-knowledge proof implementation
• Develop bank KYC integration allowing users to receive ZK credentials
• Create basic wallet interface for fiat-crypto transactions
• Complete banking partner API integration
• Deploy smart contracts to Cardano testnet

Acceptance Criteria

• Users can complete KYC and receive ZK proof credentials
• Successful fiat-to-crypto transactions with privacy protection
• Banking API connected and functional
• Smart contracts deployed and tested on Cardano testnet
• Basic user interface operational

Evidence of Completion

• Private demo video for Catalyst reviewers only (NDA required)
• Transaction confirmation screenshots (with sensitive data redacted)
• Testnet deployment confirmation (contract addresses only)
• Letter from banking partner confirming successful integration
• Testing metrics report (numbers only, no code)

Delivery Month

3

Cost

40000

Progress

70 %

Milestone Title

Security Audits and Project Completion

Milestone Outputs

• Complete external security audit by reputable firm
• Address all critical vulnerabilities
• Verify compliance with financial regulations
• Create project close-out report
• Produce demonstration video

Acceptance Criteria

• Security audit completed with no critical issues remaining
• Compliance requirements validated
• All major vulnerabilities documented and resolved
• Final documentation complete
• Professional demo video ready

Evidence of Completion

• Security audit certificate from external firm (summary only, no technical details)
• Compliance verification letter
• Audit firm's attestation of resolved issues
• Public project summary report (no proprietary details)
• Marketing demo video (showing UI/UX only, no technical implementation)
• Public announcement of successful completion

Delivery Month

4

Cost

45000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Development Costs – 20,000 ADA

• Lead Developer (David Edri): 10,000 ADA

1. Technical architecture design and ZKP protocol implementation
2. Smart contract development and Cardano integration
3. Code review and quality assurance
4. Project technical leadership

Supporting Developer: 10,000 ADA

• Frontend wallet interface development

1. API integration support
2. Testing and documentation
3. Development assistance across all components

Security Audits – 45,000 ADA

1. External ZKP Security Audit: 35,000 ADA
2. Comprehensive cryptographic implementation review
3. Smart contract vulnerability assessment
4. Zero-knowledge proof verification testing
5. Performance and optimization analysis
6. Conducted by tier-1 audit firm (e.g., CertiK, Hacken)

Compliance Verification: 10,000 ADA

1. KYC/AML regulatory compliance assessment
2. Data privacy regulation review (GDPR, etc.)
3. Financial services compliance validation
4. Legal consultation and documentation

Banking Integration – 25,000 ADA

• API Development and Integration: 10,000 ADA

1. Custom API endpoint development
2. Authentication and security implementation
3. Data mapping and transformation logic
4. Integration testing and debugging

Banking Partner Technical Costs: 15,000 ADA

1. Bank-side development resources
2. Technical support and consultation
3. API access and infrastructure fees
4. Testing environment and sandbox access

Operations & Contingency – 10,000 ADA

Infrastructure and Tools: 5,000 ADA

1. Cloud hosting services
2. Development tools and software licenses
3. Third-party service subscriptions

Contingency Fund: 5,000 ADA

1. Unexpected technical challenges (5% of total budget)
2. Additional security fixes if required
3. Extended testing or audit requirements
4. Currency fluctuation buffer

[Final Pitch] Value for Money

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

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

Breaking New Ground in Privacy-Preserving Finance

The 100,000 ADA investment in zkFiat delivers exceptional value by solving one of blockchain's most critical challenges: bridging traditional finance with DeFi while maintaining user privacy. This positions Cardano as the first blockchain to offer truly private, compliant fiat on/off ramping through zero-knowledge proofs.

Multiplier Effect on Ecosystem Growth

User Acquisition: By removing the privacy concerns that keep traditional finance users away from DeFi, zkFiat could onboard thousands of new users who currently avoid blockchain due to data exposure fears

TVL Growth: Easier, private fiat access directly translates to increased Total Value Locked in Cardano DeFi protocols

Transaction Volume: Each new user enabled by zkFiat generates ongoing transaction fees for the network

Competitive Advantage for Cardano

While other blockchains struggle with the privacy-compliance paradox, zkFiat gives Cardano a unique selling proposition. The 100,000 ADA investment is minimal compared to the potential market share Cardano could capture from privacy-conscious institutional and retail users.

Cost Efficiency Analysis

Development: 20,000 ADA for two experienced developers over 4 months is below market rate

Security: 45,000 ADA for ZKP security audits represents 45% of budget, ensuring robust security from day one

Banking Integration: 25,000 ADA unlocks access to the entire European banking system through our partner

Return on Investment Metrics

If zkFiat enables just 1,000 new users with average holdings of 10,000 ADA each, that's 10 million ADA entering the ecosystem

Banking integration costs of 25,000 ADA could facilitate millions in daily transaction volume

Security investment prevents potential losses from exploits (average DeFi hack in 2024: $20+ million)

Strategic Ecosystem Benefits

First-Mover Advantage: Cardano becomes the go-to blockchain for privacy-preserving financial services

Developer Attraction: Success of zkFiat will attract more developers to build privacy-focused applications

Institutional Adoption: Compliance-ready solution opens doors for banks and financial institutions

Network Effects: Each user and partner brought by zkFiat increases value for all ecosystem participants

Long-term Sustainability

Unlike one-time marketing campaigns or temporary incentives, zkFiat creates permanent infrastructure that will:

Generate ongoing transaction fees

Attract continuous user growth

Enable new DeFi products and services

Position Cardano as the privacy-first blockchain

Comparative Value

Traditional bank integration projects cost $500K-$1M

Enterprise ZKP implementations typically exceed $250K

Our lean approach delivers both for 100,000 ADA (~$35,000 at current rates)

The 100,000 ADA investment in zkFiat is not just funding a project, it's securing Cardano's position as the leading blockchain for private, compliant financial services, with potential returns far exceeding the initial investment through user growth, transaction volume, and ecosystem expansion.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes