KnightSafe: Stablecoin Vault with Staking & DEX Access

[Proposal setup] Proposal title

Please provide your proposal title

KnightSafe: Stablecoin Vault with Staking & DEX Access

[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?

Cardano lacks flexible solutions that allow DeFi users to earn returns by providing liquidity. This limits traders and investors from accessing strategies that work regardless of market direction.

[Proposal Summary] Supporting Documentation

Supporting links

• https://knightsafe.io/
,
• https://milestones.projectcatalyst.io/projects/1300171
,
• https://x.com/KnightSafeTeam

[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

Materials would be on (an) open-source Github repo(s) with Apache-2.0 license.

[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).

This proposal represents a significant evolution from the Fund 13 self-custodial vault with three key features: supporting stablecoin denomination, enhanced swap options across multiple DEXs and built-in staking encourage diversified DeFi engagement and TVL growth beyond Delta-DeFi. These additions enable stablecoin usage, seamless yield earning, and expanded trading options—all in one secure, user-controlled vault. This transforms the vault from a basic storage tool into a flexible, composable DeFi hub, directly addressing user needs and setting a new standard for Cardano DeFi infrastructure

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

The MVP will demonstrate an enhanced self-custodial vault supporting stablecoin denomination, integrated staking with Defi Protocols, and multi-DEX swaps beyond Delta-DeFi. Users can deposit, stake, and trade with full flexibility. The prototype will be open source and accessible via a public GitHub repo with documentation, demos, and walkthroughs to ensure transparency and easy adoption. This showcases a secure, composable DeFi hub expanding Cardano vault capabilities.

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

A steady increase in TVL denominated in both ADA and USDM will indicate growing user trust and capital committed to the vault, demonstrating the stablecoin denomination’s appeal and staking pull.

On-Chain Trading Volume: Tracking swap volumes across integrated DEXs will show active usage and liquidity flow enabled by multi-DEX support.

User Growth & Transactions: Number of unique vault users and frequency of deposits, withdrawals, staking actions, and swaps will measure ecosystem engagement.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

We will develop an enhanced open-sourced version of the existing fund 13 self-custodial vault with key new features:

Stablecoin Vault Denomination: Enable the vault to accept stablecoin as a denomination unit, providing users with a stable and familiar stablecoin peg for portfolio management and risk control.

Integrated Staking: Add staking functionality directly within the vault, allowing users to earn yield on idle assets without leaving the vault environment.

Multi-Dex Swap Capability: Expand swapping ability beyond DeltaDeFi, integrating additional decentralized exchanges to increase liquidity options and improve trading flexibility.

[Your Project and Solution] Impact

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

This project will have a significant positive impact on the wider Cardano community by making DeFi more accessible, flexible, and secure for a broader range of users. By enabling stablecoin denomination, the vault lowers entry barriers for users who prefer stable assets, attracting cautious retail investors and institutions seeking predictable value. Integrated staking within the vault encourages active participation in Cardano’s native yield opportunities, increasing on-chain engagement and loyalty. Expanding swap capabilities across multiple decentralized exchanges improves liquidity and trading options, fostering a more interconnected and composable DeFi ecosystem. Together, these advancements will drive higher TVL, boost trading activity, and accelerate mainstream DeFi adoption on Cardano, strengthening the ecosystem’s growth and sustainability.

[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?

Built on Fund 13 Vault: Core self-custodial architecture reused and enhanced for stability and development speed.

KnightSafe

Trust and Accountability

KnightSafe has built a strong reputation in the DeFi space, with a proven track record of generating significant trading volume on different DeFi protocols. KnightSafe’s capabilities have been officially recognized through a secured GMX grant, underscoring the value we deliver to the trading community. Our expertise is further validated by the significant Total Value Locked (TVL) on KnightSafe, showcasing our ability to bring substantial liquidity to the Cardano ecosystem. Current TVL reaches $30m and is still growing steadily. By maintaining transparent and secure operations, KnightSafe has become a trusted platform for DeFi users and traders.

Approach Validation

During the GMX's grant period, KnightSafe exceeded $180 million in trading volume, contributing over $100k in trading fees to the GMX protocol. This performance, combined with the additional liquidity KnightSafe provides to the market, has been instrumental in driving ecosystem growth. The volume generated during the grant period speaks to the effectiveness of KnightSafe as a tool, with our trading activities providing direct financial benefits to the GMX protocol and supporting liquidity in the broader market. Furthermore, KnightSafe's strategic partnership with BitBot, a project that recently raised over $3M, reinforces the value and impact of our approach.

Technical Approach Feasibility Research

KnightSafe’s technical approach is not only feasible but has been successfully implemented, as evidenced by the significant trading volume as well as TVL secured by KnightSafe, demonstrates our ability to handle high-frequency trading and liquidity provision. Additionally, the audit conducted by SlowMist underline the feasibility and security of our platform, ensuring KnightSafe’s place as a leading solution in the DeFi space.

Track Record: https://gov.gmx.io/t/knightsafe-gmx-grant-final-report/3847

Partnership: https://hackernoon.com/bitbots-presale-passes-$3m-after-ai-development-update

Audit Report: https://github.com/knight-safe/knight-safe-contracts-v2/blob/master/audits/26-7-2024_SlowMist_KnightSafe.pdf/

[Milestones] Project Milestones

Milestone Title

Trading Team Setup and Define Operation

Milestone Outputs

The project will clearly define roles and responsibilities, including Trader/Quant for strategy development, Execution Lead for trade operations, and Operations for overall project support. Additionally, an operating guideline will be established to ensure smooth workflows, risk management, and a transparent review process to maintain quality and accountability throughout the project lifecycle.

Outputs

• Roles and responsibilities (Trader/Quant, Execution Lead, Operations).

• Operating guideline

Acceptance Criteria

Acceptance criteria include publishing a clear, detailed public announcement that outlines the assigned roles and responsibilities within the project team. Additionally, there will be a publicly accessible post detailing the operating guideline

Acceptance criteria

• Public post announcing roles.

• Public post on operating guideline.

Evidence of Completion

Evidence will consist of publicly accessible links to the official announcement post detailing team roles and responsibilities. Additionally, a link to the comprehensive operating guidelines document will be provided.

Evidence

• Link to announcement post.

• Link to operating guidelines.

Delivery Month

1

Cost

12000

Progress

20 %

Milestone Title

Conceptual Architecture Framework

Milestone Outputs

The project will deliver a comprehensive, high-level framework detailing the architecture and functionality of the enhanced stablecoin vault, offering clear guidance for future development and integration. Additionally, a complete end-to-end flow diagram will be created, illustrating how users interact with all system components

Outputs

• High-level stablecoin vault framework

• End-to-end flow diagram

Acceptance Criteria

For successful milestone completion, the architecture design document outlining technical elements and design decisions. User workflow diagram showcasing the user journey and interactions with the system must also be made public.

Acceptance criteria

• The architecture design document is public.
• User workflow diagram and system interaction flow are public.

Evidence of Completion

Evidence of achievement will be provided through permanent, publicly available links to the finalized framework documentation and the end-to-end flow diagram. These resources will be published on trusted platforms such as GitHub or GitBook

Evidence

• Links to the framework and diagram.

Delivery Month

1

Cost

26000

Progress

50 %

Milestone Title

Prototype Development

Milestone Outputs

The project will deliver full functionality for users to deposit and withdraw assets denominated in stablecoin within the vault, providing stable and predictable asset management.

Outputs

• Enable vault deposits and withdrawals denominated in stablecoin

• Enable stake and unstake of assets

• Enable integration of vault with DEX on Cardano

Acceptance Criteria

Success will be measured by the completion and public availability of fully functional source code supporting all the above features. The codebase include comments for clarity, along with documentation explaining implementation details and user guidance.

Acceptance criteria

• Functional source code with comments and documentation

Evidence of Completion

Proof of achievement will include providing public URLs linking to the smart contract and source code repositories hosted on platforms such as GitHub. Additionally, detailed documentation or specification notes explaining the project’s technical design and usage will be made publicly available on GitHub, GitBook, or similar platforms, ensuring transparency and enabling community engagement.

Evidence

• Smart contract/code: URL to public repository.
• Documentation: URL to public specification/notes (GitHub or GitBook).

Delivery Month

1

Cost

52000

Progress

80 %

Milestone Title

Deployment & Close-Out

Milestone Outputs

The project will deliver a frontend that showcases the enhanced vault’s features and allows easy user interaction. Additionally, a comprehensive final close-out report will be prepared, summarizing project achievements, lessons learned, and future directions. To complement this, a concise final close-out summary video will be created to visually present key outcomes, demonstrate functionality, and facilitate broader community understanding and engagement.

Outputs

• Development of website frontend

• Final close-out report.

• Final close-out summary video.

Acceptance Criteria

Successful completion requires that the frontend is constructed and deployed on a publicly accessible domain for users and stakeholders to explore. The finalized close-out report must be submitted, providing detailed documentation and reflective insights on the project’s progress. Likewise, the close-out video summarizing major milestones and features must be completed and submitted to illustrate the project’s results clearly.

Acceptance criteria

• Construct the website frontend and deploy it in a public domain

• Close-out report submitted.

• Close-out video submitted.

Evidence of Completion

Evidence of milestone completion will be provided through publicly accessible links collated in a single, comprehensive public post. This post will include URLs to the live website frontend, downloadable versions of the close-out report, and access to the final summary video, ensuring full transparency and easy access for community members and evaluators.

Evidence

• Links to all final materials collected in a single public post.

Delivery Month

1

Cost

10000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1 — Trading Team Formation

• ADA 6,000 — Roles and responsibilities (Trader/Quant, Execution Lead, Operations).
• ADA 6,000 — Operating guideline (e.g., review process).

Milestone 2 — Conceptual Architecture Framework

• ADA 14,000 — High-level Architecture framework.
• ADA 12,000 — End-to-end flow diagram.

Milestone 3 — Prototype Development

• ADA 18,000 — Enable vault deposits and withdrawals denominated in USDM stablecoin.
• ADA 18,000 — Enable stake and unstake of assets.
• ADA 16,000 — Enable integration of vault with a DEX on Cardano.

Milestone 4 — Deployment + Close-Out

• ADA 10,000 — Frontend Deployment

Total: ADA 100,000

[Final Pitch] Value for Money

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

This project represents exceptional value for money by building upon the proven success of the Fund 13 self-custodial vault, minimizing development risks and accelerating delivery through a trusted, real-world tested architecture. The enhancements—supporting stablecoin denomination, integrated staking, and multi-DEX swap capabilities—address critical user demands and unlock broader participation, driving higher total value locked and increased on-chain activity. By fostering deeper ecosystem composability and synergy with existing Cardano DeFi protocols, the project amplifies network effects and long-term growth. The cost reflects an efficient investment in scalable, reusable infrastructure that significantly expands DeFi accessibility and utility, maximizing impact across the Cardano community while maintaining a lean development scope.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes