[Lowfee] Reduce Transaction Fee by 80% without Layer-2

[Proposal setup] Proposal title

Please provide your proposal title

[Lowfee] Reduce Transaction Fee by 80% without Layer-2

[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

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?

As the USD price of ADA increases, there is a need for innovations to reduce transaction fees without introducing a complex solution and compromising Cardano’s base layer security.

[Proposal Summary] Project Dependencies

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

Yes

Describe any dependencies or write 'No dependencies'

Cardano's On-chain: [Blockfrost.io]; Wallet: [Eternl]

[Proposal Summary] Project Open Source

Will your project's outputs be fully open source?

Yes

License and Additional Information

All outputs will be public under Apache 2.0 license

[Theme Selection] Theme

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

UTXO

[Campaign Category] Category Questions

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

Our innovation lies in unlocking a native feature of Cardano's EUTXO model to achieve significant fee reduction directly on the base layer. Unlike previously funded, more complex Layer-2 or side-chain solutions, our approach utilized Layer-1 efficiency without compromising its security or decentralization.

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

Our MVP will be a fully functional DApp on the Pre-production Testnet, demonstrating that multiple users can aggregate their transactions into a single on-chain transaction, achieving a fee reduction of up to 80%. The DApp will be accessible via a public website, and all code will be open-source on our GitHub.

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

Success will be measured by the number of aggregated transactions successfully submitted, with each on-chain transaction ID representing a successful batch for multiple users. We will also track the total volume of ADA transacted through our DApp and the number of unique participating wallet addresses as key on-chain indicators of adoption and utility.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

To solve the challenge of transaction costs on Cardano, we propose Lowfee, a DApp that leverages Cardano's UTXO model to aggregate multiple UTXOs from different users into a single, cost-efficient transaction. Our solution makes sending ADA significantly cheaper without requiring complex Layer-2 solutions. This allows for smaller, more frequent transactions to thrive on Cardano, unlocking more use cases.

In essence, the transaction's savings come from the aggregation and partial signings. Different users connect their wallets, such as Eternl, and enter their destination address and the amount they wanted to send. After clicking submit, our DApp would aggregate their UTXO along with other users, construct a single transaction, and dynamically compute splitted fee amongst participants. Then each participant can sign the aggregated transaction with a fee less than what it would’ve been if they didn’t use Lowfee.

There are areas we need to focus on in order to bring Lowfee to battle-ready production-scale, such as handling aggregation stalls and long waiting time. We already architect the solution for them with techniques such as exponential backoff, mandatory deposit stake, and configurable queue, all of which are ready for us to implement.

[Your Project and Solution] Impact

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

Lowfee enables up to 80% savings on transaction fees by aggregating multiple users’ UTXOs into a multi-participant partially-signed transaction, making small, frequent transactions economically viable and opening new use cases for micro-payments, DeFi interactions, and automated trades. As an open-source solution, it can be integrated directly into the community’s popular wallets like Eternl and Yoroi, ensuring widespread adoption across the Cardano ecosystem, even other UTXO-based blockchains like Bitcoin and Ergo.

[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 approach is grounded in a working Proof of Concept (PoC) that has been successfully tested on the Cardano Pre-production Testnet. Using cardano-cli, we built and validated the entire transaction aggregation flow, resulting in a successful aggregated transaction that can be accessed on-chain here: https://preprod.cexplorer.io/tx/a004106090ae6af1e896bed3070db6fd83014b3055fad770543dcc7883386f35

Our Project Team

Dani Ihza Farrosi (Blockchain Developer, Community & Growth):

LinkedIn: https://www.linkedin.com/in/daniihza/

Github: https://github.com/danivideda

Dani is an experienced software engineer having delivered backend services using Typescript with NestJS and PHP with Laravel. His deep involvement in Project Catalyst since Fund 6 (2021) as a reviewer and a moderator gives him a contextualized understanding of our project’s success factors.

• Interface & Blockchain Development: Dani will develop the DApp front-end interface and back-end services with emphasis on blockchain fundamentals. He will lead the project as we navigate through Cardano’s UTXO and transactions aggregation mechanism.
• Developer Advocacy & Community Growth: Dani had been involved in Plutus Pioneer, Eastern Town Hall, Catalyst School, and Cardano ecosystem very early on. He will lead as our project’s developer advocate, responsible for community engagement through our social media channels (Twitter/X, Discord).

Fitra Rahmani Khasyah (Full Stack Developer):

Linkedin: https://www.linkedin.com/in/fitra-rahmani

Github: https://www.github.com/khasyah-fr

Fitra is a software engineer with extensive experience in building scalable full-stack applications within e-commerce, finance, and AI industries. He managed funded projects from initial concept to complete implementation on SingularityNET, a decentralized platform powered by Cardano’s blockchain. He has been participating actively in the Project Catalyst, having served as a reviewer since Fund 8.

• DApp Interface & Backend Development: Fitra has a proven track record of architecting and developing front-end interfaces and back-end services using React, Node.js, Python, and Golang. He has managed large-scale PostgreSQL and Redis clusters and built systems that orchestrate over millions of transactions securely and reliably. He will assist the development of the DApp interface and handling back-end aggregation service.
• Project Management & Software Delivery: Fitra previously secured funding and delivered blockchain projects. He had hands-on experience managing timelines, deliverables, and requirements related to the projects. Thus, he will lead the project in terms of project management and testing, ensuring high-quality standards for our solution.

Khresna Pandu Izzaturrahman (Developer & Infrastructure Engineer):

LinkedIn: https://www.linkedin.com/in/khresna-pandu/

Github: https://github.com/KhresnaPanduI

Pandu brings a wealth of experience in building, deploying, and maintaining high-performance backend systems and the critical infrastructure required to support them. His expertise is perfectly aligned with the technical demands of creating a robust transaction batching service.

• High-Performance Backend & API Development: Pandu has extensive experience designing and deploying high-performance microservices using Python, FastAPI, and Gunicorn. He has built and scaled APIs capable of handling over 5000 requests per minute, demonstrating his ability to engineer services that are both fast and efficient.
• Robust Infrastructure & DevOps: He has hands-on experience managing server infrastructure, where he implemented and maintained a full CI/CD pipeline using Bash/SSH for automated Docker updates. He is highly proficient in configuring Nginx for load balancing and has deployed comprehensive system monitoring and alerting using Prometheus and Grafana, ensuring system stability and resilience.

Proven Track Record

Our team's ability is demonstrated by our track record on securing funding from strong ideas on other decentralized funding platforms.

• Sign Language Translator AI (SLTA): Our team secured a $50,000 grant from SingularityNET's Deep Funding, a funding program for novel AI services. SLTA ranked 3rd out of 91 competitive technical projects and passed rigorous review evaluation for technical feasibility and impact. For more info: https://deepfunding.ai/proposal/sign-language-translator-ai-slta/
• SingularityNet & Deep Funding: Indonesia Chapter: Our team also secured funding for and delivered a community-building initiative, proving our management skills in a project's full lifecycle, from the first milestone all the way to final reporting and handover. For more info: https://deepfunding.ai/proposal/singularitynet-and-deep-funding-indonesia-chapter/

[Milestones] Project Milestones

Milestone Title

Preparation and Setup

Milestone Outputs

- Repository & Account Initialization: Create a dedicated GitHub organization for the Lowfee project and initialize a repository for the frontend and backend. Set up a team account for the Blockfrost API to access on-chain data and network parameters.

- Community Channel Setup: Launch the official Twitter/X account and a Discord server for the Lowfee community. These channels will be used for project updates, community engagement, and collecting future feedback.

- UI Design: Develop low-fidelity wireframes and user flow diagrams for the DApp, outlining the core user journey.

- Infrastructure & Domain: Acquire the Lowfee.io (or similar) domain name. Set up initial server infrastructure and deploy a placeholder landing page explaining the project's vision.

Acceptance Criteria

• All required developer accounts (GitHub, Blockfrost) are created and configured.

• The community channels are established and accessible to the public.

• The UI/UX designs are finalized for development, consisting:

1. Connect Wallet page
2. Submit transaction page
3. Sign transaction page

• The placeholder landing page is publicly accessible

Evidence of Completion

• Public links to the GitHub organization and repositories.

• Public links to the active Twitter/X and Discord channels.

• A link to the live landing page.

• Screenshots and design files for the UI/UX wireframes.

Delivery Month

1

Cost

25000

Progress

20 %

Milestone Title

Interface and Initial UTXO Aggregation

Milestone Outputs

- DApp Frontend Development: Implement the DApp interface based on the UI/UX designs. This includes the "Connect Wallet" functionality (using a library compatible with major Cardano wallets) and an input form for transaction details.

- Backend Queue System: Develop the backend service to manage an in-memory queue of transaction requests using Redis.

- Initial Aggregation Logic: Implement the backend logic that triggers when the queue reaches 5 users. This service will:

1. Gather all participants UTXOs.
2. Construct a single transaction body with all inputs and outputs.
3. Calculate the total transaction fee and correctly assign it to each participant's change output.

Acceptance Criteria

• The DApp successfully connects to a testnet wallet and reads the user's balance and UTXOs.

• The backend correctly queues transaction requests from 5 different users.

• The aggregation service produces a valid, unsigned transaction body in CBOR format that accurately reflects all inputs, outputs, and the correctly calculated shared fee.

Evidence of Completion

• Access to the GitHub repository for the frontend and backend codebase.

• A short video demonstration showing multiple transaction requests being submitted via the DApp, processed by the backend, and resulting in a single, correctly structured transaction body (viewable as CBOR/JSON output).

Delivery Month

3

Cost

30000

Progress

50 %

Milestone Title

Partial Signing and Deposit System

Milestone Outputs

- Partial Signing Integration: Integrate the frontend with the wallet's signing function (signTx). The DApp will present the aggregated transaction to each participant and prompt them to sign it. The backend will be updated to receive and store these partial signatures.

- Multi-Signature Assembly: Implement the logic on the backend to collect all partial signatures and assemble them into a final, valid, multi-signed transaction ready for submission.

- Deposit System Development: Create the flow for the deposit system. This includes:

1. A user flow to submit their ADA deposit before joining a queue.
2. Logic to automatically take the deposit in case of malicious user activity that deteriorates the queuing system.
3. A user flow to withdraw their ADA deposit in case they no longer want to transact in the DApp.

- Internal Testing: Conduct internal testing of the end-to-end flow on the Pre-production Testnet, including the successful case (all users signed) and the failure case (one user fails to sign).

Acceptance Criteria

• An aggregate of 5 transactions can be successfully signed by all 5 participants and submitted to the Pre-prod Testnet, resulting in a single, successful on-chain transaction ID (hash).

• The user can withdraw their deposited ADA upon their request

• In a test scenario where one participant fails to sign, the batch is correctly stalled, and their deposit will be taken by the DApp. These scenarios are:

1. User failed to provide valid UTXOs
2. User hasn’t signed the aggregated transaction after 2 minutes

Evidence of Completion

• An on-chain transaction ID from the Pre-prod Testnet for a successfully completed 5-person aggregated transaction.

• A video demonstration of the entire process, including the deposit, queuing, multi-signature signing by different "users" (different wallet accounts), and final submission.

• The internal test report document.

• Updated GitHub repositories containing the multi-signature and deposit system code.

Delivery Month

5

Cost

30000

Progress

80 %

Milestone Title

Deploy to Pre-prod and Collect User Feedback

Milestone Outputs

- Public Beta Launch: Deploy the fully functional DApp to the Pre-production Testnet for community testing.

- Community Announcement & Feedback: Announce the public beta through our Twitter/X and Discord channels, inviting the community to test the DApp. Create and share a structured user feedback form (e.g., Google Form) to collect insights on user experience, bugs, and potential improvements.

- Bug Fixes & Refinements: Actively monitor community feedback and address any identified bugs or critical issues.

- Project Closeout Reporting: Prepare the final Project Closeout Report (PCR) and a comprehensive project summary video (PCV) that demonstrates the live DApp, explains its impact, and details the project's journey and insights.

Acceptance Criteria

• The public beta DApp is live and remains stable under community testing for at least two weeks.

• At least 50 unique users have submitted feedback via the official form.

• The final PCR and PCV are completed and ready for submission to the Project Catalyst team and the public.

Evidence of Completion

• A public URL to the live Lowfee DApp on the testnet.

• A link to the feedback form and a public document summarizing the feedback.

• The final Project Closeout Report and a link to the published Project Closeout Video on a platform like YouTube.

• Links to posts on our social channels announcing the public beta and sharing the final project outcomes.

Delivery Month

6

Cost

15000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Our total requested budget is 100,000 ADA. This funding is allocated across four key milestones, covering personnel costs for our team of three experienced developers, as well as essential infrastructure and operational expenses.

Milestone-Based Budget Breakdown (nominal in ADA)

Milestone 1: Repository & Account Initialization [1,000], Community Channel Setup [1,000], UI/UX Design [10,000], Infrastructure & Domain Setup [13,000]

Milestone 2: DApp Frontend Development [15,000], Backend Queue System [7,500], Initial Aggregation Logic [7,500]

Milestone 3: Partial Signing Integration [10,000], Multi-Signature Assembly [8,000], Deposit System Development [9,000], Internal Testing & QA [3,000]

Milestone 4: Public Beta Launch & Deployment [8,000], Community Feedback Management [2,000], Bug Fixes & Final Refinements [2,500], Project Closeout Reporting [2,500]

The detailed budget breakdown per milestone can be seen here:

https://docs.google.com/spreadsheets/d/1nUYlW_xzMzp5bDBCLYIx5ociaiUIzzvDOn4rd3_qgro/edit?usp=sharing

[Final Pitch] Value for Money

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

Our project directly supports Cardano adoption, delivering up to 80% lower transaction costs that make on-chain activity more affordable, expand use cases, and attract more users. By releasing our solution as open-source, it can be seamlessly integrated into existing wallets like Eternl, Yoroi, Nami etc, reused by DApps, and even inspire other UTXO-based blockchains with partial signing capabilities. Built by a Catalyst-experienced team active since Fund 6, we combine our ecosystem knowledge with software development rates well below market averages, ensuring maximum value for the community.

References:

Freelance Full-Stack Developer: https://www.upwork.com/hire/full-stack-developers/

Freelance AI Engineer: https://www.upwork.com/hire/ai-developers/

Freelance Blockchain Developer: https://www.upwork.com/hire/blockchain-developers/

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes