HydroTrace - Trustworthy Water Allocation and Tracing

[Proposal setup] Proposal title

Please provide your proposal title

HydroTrace - Trustworthy Water Allocation and Tracing

[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?

Water management relies on outdated systems that make it hard to track use, enforce quotas, and plan sustainably, leaving regulators and users unable to manage this critical resource effectively.

[Proposal Summary] Project Dependencies

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

No

Describe any dependencies or write 'No dependencies'

HydroTrace does not have a direct technical dependency. The core development can progress independently, however, our collaboration with Namibia’s Ministry of Agriculture, Fisheries, Water and Land Reform (MAFWLR) provides critical real-world context and validation. This partnership enables us to: (1) Ensure regulatory alignment with Namibia’s Water Act Access real-world data for technical validation and (2) Co-design workflows that reflect actual government operations.

[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.

Agriculture

[Campaign Category] Category Questions

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

HydroTrace is one of the first blockchain-based initiatives focused on integrated water resource management and governance, both within Project Catalyst and the wider blockchain space. Unliked previously funded Projects in the Use Case caterogy, we directly partner with a national ministry to test how Cardano can support transaparent water allocation and useage recording in a regulatory context.

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

Our prototype/MVP will demonstrate how water quotas can be issued, tracked and verified in a regulatory context using HydroTrace tools. Farmers will use a mobile app to submit meter readings, while the ministry validates allocations, manages quotas, and monitors compliance through a web dashboard. All records are anchored on Cardano using an extension of Originate for batching, ensuring tamper-proof, auditable histroy.

The MVP will be accessible through a dedicated GitHub repository. For full technical detail, please see the Solution section of the proposal.

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

PoC is specifically in Stampriet basin however Namibia has 4,000 farms (and growing). Assuming Namibia decides for full-scale adoption may lead to ~36–40k annual tx: quota issuance (4k), monitoring (200), water meter batches (8k), compliance (8k), and credit trades (16k). Quotas minted (~4k/yr), then burned/reminted with compliance adjustments. Namibia’s water use is dominated by agriculture (45% water use), reflecting global trend where agriculture accounts for 70% of water use, showcasing massive potential to scale.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Water scarcity is an increasingly large and complex global challenge, driven by climate stress, overuse and rising demand. While supply-side infrastructure such as reservoirs, dams, and well-fields still play a role, these measures are now hitting their physical, economic and ecological limits. Lasting solutions now require effective water governance which hinges on knowing who is using how much, under what rights and encouraging fair allocation.

Current water resource management remains fragmented across agencies and jurisdictions, with licensing and reporting systems that remain largely paper-based or maintained in disconnected digital files. Usage reporting is often delayed, unverifiable and enforcement depends on labor-intensive manual checks. Without transparent and verifiable systems, regulators cannot respond quickly to overuse, adjust allocations to changing conditions or build trust among water users.

HydroTrace’s mission is to bring transparency, traceability, and accountability to water agencies and users through a secure, verifiable digital layer that complements existing workflows and complies with existing regulations. HydroTrace will explore how:

• Trusted, high-quality water records can build confidence between users and agencies, inform efficient water allocation and guide more responsive, sustainable water management.
• Secure digital reporting tools such as mobile entry, Optical Character Recognition (OCR) assisted meter reading, or IoT integration can standardize submissions and reduce administrative burden.

Proof of Concept in Namibia

Our first step is to validate this approach in the field through a focused proof-of-concept centered on agricultural water management in Namibia, in partnership with the country’s Ministry of Agriculture, Water, and Land Reform (MAFWLR).

Technical Approach and Feasibility

We plan to deliver a minimal viable product for the proof of concept that can be tested in a live regulatory environment. This will combine a lightweight, modular technical build with structured engagement to understand operational realities at the ministry level, pain points for farmers, and hydrogeological factors that influence water allocation. The aim is to produce both a working prototype and actionable insights that will guide refinement, scaling, and policy alignment. The PoC will not be a final, production-ready institutional system but will provide preliminary functional tools that allow for testing, feedback, and iterative development toward that goal.

Technical Architecture Overview

The HydroTrace solution architecture is designed to achieve two primary goals: (1) sensor data collection from diverse sources and (2) tokenization of water quotas for compliance. For sensor data collection, the architecture utilizes a combination of unstructured storage (e.g. for images of water meters) and a timeseries database. The Cardano blockchain is used for storing hashed content identifiers on-chain at regular intervals to make the data immutable. The Proof of Concept (PoC) focuses on demonstrating the feasibility of this approach for water management and governance, with a long-term vision of enabling water credits and tokenization, including minting and burning tokens.

Design Decisions and Integration

In water resource management, there is a critical need for trustworthy and tamperproof records for water quota issuance, and for handling high-volume data such as water meter readings in addition to surface and ground water levels. To address this, we will integrate the Cardano Foundation's Originate transaction manager (Metabus module). We will evaluate Originate with HydroTrace use cases, and adapt the Metabus components to handle IoT sensor data loads. The HydroTrace approach aims to achieve tamperproof, traceable records of water quotas from their origin, enabling trust in water resource management systems, increased throughput, and cost efficiency. During our PoC we will also evaluate Layer 2 solutions like Hydra and Midgard for decentralization and scalability.

The subsequent sections will outline the key components of the HydroTrace solution architecture and its integrations.

HydroTrace System Design and Integration

• User Management: Provides identity and access management for ministry members, farmers and researchers.
• Transaction Management: Batches and anchors water-specific data on-chain for immutability and compliance.
• APIs: Three APIs will support the HydroTrace system:

1. HydroTrace API for backend interactions (users, quotas, abstraction data, GW levels).
2. Data collection API for field uploads (flow meter photos, OCR processing and IoT/M-Bus data).
3. User data API for access to verified quotas, useage history, compliance status and basic analytics.

• Web App: Dashboard for user management, quotas visualization, compliance monitoring and water data analytics.
• Mobile App: Enables farmers to capture flow meter readings, view quotas and verify compliance with a cross-platform mobile development toolkit, e.g., React Native.

HydroTrace Protocol

Bootstrapping Water Quota Tokenization: The HydroTrace Protocol prioritizes simplicity and low technical barriers for farmers. The Ministry manages a central custodial wallet to handle all on-chain transactions, including to issue digital water credits and batched water abstractions, acting as the sole trusted authority within the system. Farmers interact through the app without needing to manage their own wallets. Key work involves specifying JSON schemas for water quotas, and adapting Originate's core data-anchoring functionality, and aligning regulatory requirements and HydroTrace’s core logic. The proposed solution provides the basis for evaluation and evolution of Cardano native tokens for water allocation, establishing the foundations for decentralized, peer-to-peer interactions and automated compliance through smart contracts.

HydroTrace will support the following scenarios for water governance. In this Proof of Concept we will implement scenarios for water credit transactions and abstraction traceability (1) and compliance checks (2) with preparatory work to enable water credit trading (3), and evaluate these scenarios to determine the most effective path for a full-scale rollout.

SCENARIO 1: Water Credit Transactions and Abstraction Traceability

1. The Ministry issues digital water quotas (credits) to farmers. Farmer identities are verified and linked to their HydroTrace profile using Cardano Originate’s identity features.
2. Farmers use the smartphone app to submit water meter readings by taking a photo. Water meter data is extracted from these photos via OCR. The farmers are then asked for confirmation of the extracted data. Finally the data is saved along with the photos for later data verification.
3. Simultaneously, water utilities and authorities can provide basin and groundwater level data via an API.
4. The HydroTrace backend batches all incoming data, creates a content identifier (CID) hash, and uses the Ministry's custodial wallet to anchor the hash on-chain. This process uses CF Originate batching for efficiency and affordability.
5. Each transaction is tagged with searchable metadata (e.g., WaterCreditID, DataSource, Timestamp, etc.), making the complete water usage and allocation history auditable.
6. The HydroTrace Web App includes a dashboard showing analytical data (e.g. ground water levels, abstraction volumes etc.)

SCENARIO 2: Compliance Check

1. The Ministry issues water credits and distributes them to farmers' based on their allocated quota.
2. When a farmer submits a meter reading value via the app (e.g., by photographing a meter), the balance of the water credits is calculated.
3. The HydroTrace platform automatically verifies if the farmer has sufficient water credits.
4. If the water quota account lacks the required credits, the system flags the account for non-compliance, notifying the ministry and the farmer. This provides the basis for evaluating and evolving towards a) water quota tokens (Cardano native tokens) and b) automated compliance checks by smart contracts, and c) license fee transactioning for HydroTrace compliance engine.
5. Optionally, if the water quota drops below a configurable threshold, e.g., 15% of the allocation, the farmer is notified via the mobile app, and logs the event on-chain. This would support proactive compliance and give farmers a chance to adjust before breaching limits.

SCENARIO 3: Water Credit Trading

1. A farmer with a verified water deficit (calculated from on-chain data) uses the app to request additional water credits. Farmers with a surplus under given rules can transfer a portion of their quota to another farmer.
2. The Ministry receives the request and uses the HydroTrace web app to review it against regional water policies. This provides the basis for the evaluation of automated policy enforcement supported by HydroTrace services.
3. Upon approval, a Ministry official authorizes the transfer.
4. The backend updates the quota balances for farmers via Originate and anchors a transaction on-chain with metadata detailing the approved water credit upgrade, creating an immutable record.

HydroTrace long-term Vision in Water Resources Management

The initiative will begin with a concrete, ministry-backed test case in Namibia that aims to support their existing water policies. This will generate practical insights and open-source outputs that can inform digital water management frameworks and allocation systems in other water-stressed regions.

While the first deployment will focus on a specific groundwater management challenge, the same issues of fragmented data, weak enforcement, and limited transparency exist in water sectors worldwide. Lessons from this proof of concept will help inform transparent, accountable water management that can be applied across agriculture, industry and even transboundary water governance.

[Your Project and Solution] Impact

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

1. Demonstrating Cardano in Real-World Governance

HydroTrace aims to showcase how Cardano can address complex governance challenges through the use of native tokens, identity-linked permissions, on-chain data logging and smart contracts. Issued quotas, adjustments, and usage reports in the proof of concept will be recorded on-chain, creating a measurable stream of transactions directly tied to verified users, water policy and real-word water usage.

2. Driving Novel Water Governance While Advancing Sustainable Development Goals (SDG) and Environmental, Social, and Governance (ESG) Objectives

To our knowledge, HydroTrace is among the first blockchain-based water resource management projects within Project Catalyst and in the broader blockchain space. It demonstrates how Cardano can directly support global sustainability goals while advancing blockchain-powered infrastructure.

The project also aims to advance SDG 6 (Clean Water and Sanitation) and SDG 16 (Peace, Justice and Strong Institutions), while also working towards tackling ESG objectives by enabling verifiable accounting of water use and water footprints.

3. Live Environment for Cardano Tooling

HydroTrace will operate as a live testing environment for applying and assessing existing Cardano ecosystem tools in a regulated, government-level context.

4. Gateway to Government Partnerships

Direct collaboration with a national ministry builds trust, creates a repeatable engagement model, and demonstrates that Cardano can meet institutional compliance and regulatory requirements.

6. Expanding Native Asset and Smart Contract Use Cases

By tokenizing water quotas, HydroTrace showcases Cardano’s demonstrated utility for native assets and smart contracts beyond finance, paving the way for applications such as carbon credits and other sustainability markets.

Long-Term Ecosystem Value:

• On-Chain Growth: Recurring transactions from quota issuance, usage reporting, trading and policy adjustments.
• New Users: Introduction of non-crypto stakeholders such as government staff, water managers, and farmers to Cardano wallets and applications.

Together, we believe these impacts can show how Cardano can support vital governance systems but also drive measurable network activity, institutional adoption, and ecosystem integration.

[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?

HydroTrace is led by an interdisciplinary team with expertise in groundwater science, computer science, embedded systems engineering, and finance. All technical staff hold doctorates in their field and have delivered applied, real-world solutions in complex, regulated environments.

Our development will be managed fully in-house, ensuring quality control and rapid iteration. The team’s combined experience ensures the project is grounded in scientific rigor, technical feasibility, and practical deployment considerations. The secured collaboration with Namibia’s Ministry of Agriculture, Water, and Land Reform provides an ideal environment to validate our approach in a live regulatory setting.

Feasibility will be tested through institutional alignment, user onboarding, technical performance evaluation, and collection of operational insights to guide future scaling.

[Milestones] Project Milestones

Milestone Title

Kickoff & Initial Design

Milestone Outputs

1. PoC scope and implementation plan
2. Kickoff presentation to MAFWLR and meeting summary
3. Questionnaire responses from partial set of participating farmers and ministry staff
4. Documentation from 1–2 site visits
5. Preliminary brief on groundwater resource management, farming practices, allocation practices and operations in the context of Namibia’s water act

Acceptance Criteria

1. MAFWLR engagement established
2. At least one in-person kickoff and one operational follow-up
3. Questionnaires distributed and responses collected from 3–5 stakeholders
4. Site visit photos and farmer interviews collected
5. Early findings summarized in short internal technical memo

Evidence of Completion

1. PDF of PoC scope and kickoff slides
2. Attendance log or photos from MAFWLR meeting
3. Sample completed questionnaires
4. Site visit notes and images
5. Memo on initial policy + operational insights

Delivery Month

3

Cost

20000

Progress

10 %

Milestone Title

Technical & Hydrogeological Requirements Analysis

Milestone Outputs

Water data needs and operations assessment:

Documentation and review of the Ministry’s current agricultural water policies such as quota allocation methodology, in the context of regional hydrogeology.

• Identification of agricultural practices influencing water usage, such as multiple crop cycles, crop rotations, irrigation practices, and associated water-use.
• Assessment of existing farm-level monitoring practices, including climate, groundwater abstraction records, soil moisture measurements, and irrigation methods. We will evaluate how these datasets could support a more adaptive and evidence-based allocation policy.
• Coordination and review sessions with MAFWLR to present progress, gather feedback, and agree on next steps.

State Of The Art Analysis:

• Review of existing Cardano related tools/solutions and best practices
• Assessment of how the existing tools and best practices align with HydroTraces’s requirements
• Evaluation of possible co-operation with other Cardano projects (e.g. Originate)

Acceptance Criteria

1. Current Ministry quota allocation methodology and approach in the context of regional hydrogeology and seasonal water availability documented in a clear, shareable format.
2. Preliminary evaluation of current agricultural practices used by farmers participating in the PoC.
3. Existing farm-level monitoring practices documented and evaluated.
4. At least one documented meeting (virtual or in-person) with MAFWLR held during the milestone, with meeting notes summarising input and decisions uploaded to the project repository.
5. Cardano related tools/solutions (like Originate and Hydra) and their fit for the HydroTrace system have been analyzed.
6. Contact to the maintainers of such tools has been initiated

Evidence of Completion

1. PDF report containing the documented allocation method, summary of key agricultural practices affecting water use in the PoC area, inventory and evaluation of existing farm-level monitoring practices and assessment of quota allocation in the context of water availability.
2. Meeting notes or minutes from at least one coordination/review session with MAFWLR during the milestone, including date, participant list, and key decisions.
3. PDF report containing architectural design decisions for the integration of CF (including which tools/solutions will be used/adapted for HydroTrace and what input came from the maintainers of such tools)

Delivery Month

5

Cost

20000

Progress

20 %

Milestone Title

Identity, Authentication, and Hydro Allocation Logic

Milestone Outputs

• Coordination and review sessions with MAFWLR to present progress, gather feedback, and agree on next steps.
• Identity and authentication specification focussing on domain specific constraints, e.g., network availability, infrastructural prerequisites, and user acceptance.
• Specification and justification of two water governance scenarios, informed by and aligned with the results of the requirements analysis.

Acceptance Criteria

• At least one documented meeting (virtual or in-person) with MAFWLR held during the milestone, with meeting notes summarising input and decisions uploaded to the project repository.
• A specification document for identity and authentication, detailing user roles, onboarding processes, and CF Originate integration, is delivered.
• A specification document detailing custodial wallet-based water governance scenarios, including logic for issuance and reporting is delivered.

Evidence of Completion

• Meeting notes or minutes from at least one coordination/review session with MAFWLR during the milestone, including date, participant list, and key decisions.
• Link to the identity and authentication specification document in the project repository.
• Link to the source code for the identity management prototype in the project repository.

Delivery Month

9

Cost

18000

Progress

20 %

Milestone Title

Backend Development with Cardano Integration

Milestone Outputs

• A functional backend API supporting the water governance scenarios
• A functional system for off-chain data storage (JSON based object storage/database)
• Integration with CF Originate to anchor data hashes on-chain using a custodial wallet for water resource management transparency and enable successive scenarios
• Test cases in place that demonstrate the system’s ability to process ingested data correctly (off-chain data storage and on-chain anchoring works as expected)
• Stress tests in place to assess the system’s ability to handle large data volumes
• Coordination and review sessions with MAFWLR to present progress and gather feedback.

Acceptance Criteria

• Meeting notes or minutes from at least one coordination/review session with MAFWLR during the milestone, including date, participant list, and key decisions.
• Link to the backend source code in the project repository.
• Documentation for the HydroTrace API (e.g., Swagger/OpenAPI spec).
• A list of testnet transaction IDs demonstrating successful on-chain data anchoring for different use cases.
• Documented test run results including:

1. Successful data ingestion
2. Successful data off-chain data storage
3. Successful on-chain anchoring (TestNet)
4. Successful on-chain anchoring on Mainnet for two representative scenarios with a small number of farmers chosen for PoC
5. Data volume handling capabilities

Evidence of Completion

• API for data ingestion
• OCR backend service
• API endpoints for both scenarios:

1. Water quota (credit) issuance by ministry officials.
2. Scenario 2

• Test of Originate extensions via TestNet

Delivery Month

9

Cost

18000

Progress

20 %

Milestone Title

Web & Mobile App MVP

Milestone Outputs

• A web app (MVP) for Ministry stakeholders to manage users and support both scenarios (issuing water credits)
• Dashboard (MVP) for data analytics
• Explorer to visualize ingested data and their transaction status
• A mobile app (MVP) that allows a user to submit photographs and displays their water quota (remaining water quotas).
• Components to enable selected scenarios, e.g., automated compliance checks and alerting via asynchronous messaging.
• Coordination and review sessions with MAFWLR to present progress and gather feedback

Acceptance Criteria

• The web app can successfully issue quotas
• The web app can show basic statistics about verified water quotas, water levels, water abstraction
• A mobile app (MVP) can transfer photographs of water meter readings to the HydroTrace data ingestion endpoint
• OCR photographs (of water meter readings) >= 60% recognition rate, with bounce back logic to ask users to repeat the upload
• At least one documented virtual meeting with MAFWLR held during the milestone, with meeting notes summarising input and decisions uploaded to the project repository.

Evidence of Completion

• Meeting notes or minutes from at least one coordination/review session with MAFWLR during the milestone, including date, participant list, and key decisions.
• Links to the web and mobile app source code in the project repository.
• A video demonstrating the web app and the mobile applications showcasing the core functionalities

Delivery Month

12

Cost

18000

Progress

20 %

Milestone Title

Wrap-Up, Handover, and Knowledge Sharing

Milestone Outputs

• Final project report summarizing objectives, activities, deliverables, and results.
• Lessons-learned document capturing technical, operational, and institutional insights from the PoC.
• Recommendations for scaling, including technical roadmap, governance considerations, and integration opportunities.
• Handover package for MAFWLR including technical documentation, admin guides, and user instructions.
• Public communication assets such as a blog post or recorded demo summarizing project outcomes for the Cardano community.

Acceptance Criteria

• Final report delivered to MAFWLR and uploaded to the project repository.
• At least one meeting was held with MAFWLR to present findings and recommendations.
• All source code, documentation, and non-sensitive data available in the open-source repository.
• Public update shared with the Cardano community summarizing results and next steps.

Evidence of Completion

• PDF of final report and lessons-learned document.
• Presentation slides used for the final meeting with MAFWLR.
• Link to public GitHub repository with code and documentation.
• Link to public blog post or video update.

Delivery Month

12

Cost

6000

Progress

10 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1: 20,000 ADA

HydroTrace PoC scope and implementation plan

Initial Design Breakdown:

• PoC scope and initial design: 5,000 ADA
• Stakeholder engagement and site visits: 10,000 ADA
• Requirements documentation: 3,000 ADA
• Administrative and Operational Costs: 2000 ADA

Milestone 2: 20,000 ADA

Technical & Hydrogeological Analysis Breakdown:

• Technical Requirements Specification: 7,000 ADA
• Hydrogeological & Agricultural Practice Analysis: 6,000 ADA
• Stakeholder Workshops & Feedback Sessions: 7,000 ADA

Milestone 3: 18,000 ADA

Identity & Authentication Breakdown:

• Identity and Authentication Specification: 3,000 ADA
• Backend Development (Identity Service): 11,000 ADA
• Integration and Testing: 4,000 ADA

Milestone 4: 18,000 ADA

Backend & Cardano Integration Breakdown:

• Backend API Development: 8,000 ADA
• Originate Integration and Extension: 7,000 ADA
• Testing: 3,000 ADA

Milestone 5: 18,000 ADA

Web & Mobile App MVP Breakdown:

• Web App Development: 8,000 ADA
• Mobile App Development: 8,000 ADA
• UI/UX Design & Prototyping: 2,000 ADA

Milestone 6: 6000 ADA

Comprehensive documentation creation

• Closing report compilation
• Final adjustments and bug fixes Breakdown:

1. Documentation and report writing: 2,000 ADA
2. Public Dissemination: 3,000 ADA
3. Final development tweaks: 1,000 ADA

[Final Pitch] Value for Money

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

The budget for this project has been carefully structured to deliver high output at minimal cost. Our team brings a high level of technical expertise across multiple disciplines that would normally command significantly higher market rates. By contributing substantial in-kind time and resources, we are able to execute an ambitious proof of concept at a fraction of its commercial value.

Open-Source, Reusable Tools

All code produced will be open source, enabling other developers in the Cardano ecosystem to adapt the components for related use cases, such as other natural resource allocations. This amplifies the value of the initial investment well beyond the Namibia PoC.

Expanding Cardano into a New High-Value Vertical

This will be the first blockchain-based water resource governance project in the Cardano ecosystem. By demonstrating how native tokens, identity-linked permissions, and on-chain audit trails can be applied to water quotas, HydroTrace opens a new vertical for Real-World Asset (RWA) management. This can attract institutional interest from governments, NGOs, and development banks, significantly increasing Cardano’s visibility and adoption in the public infrastructure space.

Ecosystem and Long-Term Benefits

The system’s architecture will be designed to be modular, meaning it can scale beyond the PoC to manage more complex allocation frameworks and integrate new data sources (e.g., IoT sensors). Each on-chain quota issuance, transfer, or adjustment will generate blockchain transactions, contributing to network activity and fees.

Positive Environmental and Governance Impact

Beyond the technical gains, HydroTrace addresses an urgent sustainability challenge. By providing novel tools to manage scarce water resources more transparently and efficiently, we align Cardano with global goals, reinforcing its position as a purpose-driven blockchain for real world impact.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes