Last updated 3 months ago
Using external assets such as Bitcoin/USDC in Cardano DeFi requires users to take multiple steps over a period of time. This inhibits onboarding new users and liquidity into Cardano's DeFi ecosystem.
A new type of bridge that lets users bridge, swap, lend, or borrow BTC or USDC (or any asset) in Cardano DeFi dapps with one transfer on the native chain directly from centralized exchange accounts
This is the total amount allocated to One Shot Cross-Chain DeFi Research: Testnet MVP.
Please provide your proposal title
One Shot Cross-Chain DeFi Research: Testnet MVP
Enter the amount of funding you are requesting in ADA
80000
Please specify how many months you expect your project to last
6
Please indicate if your proposal has been auto-translated
No
Original Language
en
What is the problem you want to solve?
Using external assets such as Bitcoin/USDC in Cardano DeFi requires users to take multiple steps over a period of time. This inhibits onboarding new users and liquidity into Cardano's DeFi ecosystem.
Supporting links
Does your project have any dependencies on other organizations, technical or otherwise?
No
Describe any dependencies or write 'No dependencies'
No dependencies
Will your project's outputs be fully open source?
Yes
License and Additional Information
Apache 2.0
Please choose the most relevant theme and tag related to the outcomes of your proposal.
Cross-chain
Describe what makes your idea innovative compared to what has been previously funded (whether by you or others).
To use external assets such as BTC or USDC in Cardano DeFi, users are required to undertake some combination of the following steps:
We are researching a new type of bridge that could reduce the above to one step: a single transfer on the origin chain
If implemented, this means Cardano DeFi dapps could onboard Bitcoin or CEX users directly - in one shot.
Describe what your prototype or MVP will demonstrate, and where it can be accessed.
Our testnet MVP will demonstrate one shot bridging of Bitcoin and USDC onto Cardano testnet.
Users will be able to try it on a test portal - bridging Bitcoin and USDC from their CEX accounts onto Cardano testnet in one shot; as well as the reverse transaction to redeem the asset.
This will lay the foundation for future work to deploy a production bridge to Cardano mainnet; and future work to integrate the bridge into DeFi protocols to enable one shot swaps, borrowing, and lending of assets like BTC in Cardano DeFi protocols directly from centralized exchange accounts.
Describe realistic measures of success, ideally with on-chain metrics.
The measures of success for this research piece will be to demonstrate a working one shot bridge integrated with Cardano testnet where users can mint wrapped BTC and wrapped USDC in one transaction straight from a CEX account.
Success will also mean that our research allows us to generate important learnings from the MVP - which can then feed into a more detailed technologyroadmap to mainnet deployment and DeFi dapp integration.
Please describe your proposed solution and how it addresses the problem
Proposed Solution
We are proposing a new kind of bridge with two key differentiators:
The Vision - Potential Use Cases Enabled By The Solution
In one shot, users could:
Other type of DeFi transaction would also be possible, for example TWAPs, yield farming, or an auto-rebalancing index fund.
Why This Matters
This kind of bridge removes onboarding and cross-chain friction:
The complexities of bridging, downloading new wallets, and using wrapped assets get abstracted away from the user experience. If our vision is realized, users only ever have to execute one transaction on the chain where their native assets live.
The Tech
The bridge will be a blockchain that leverages MPC threshold signatures to secure assets and encode user intent into unique deposit addresses for each transaction. The bridge can then execute the user intent in Cardano DeFi dapps.
Please define the positive impact your project will have on the wider Cardano community
This is a research piece that will form the basis of demonstrating core one shot bridging technology with Cardano.
This lays the groundwork for a future mainnet integration that could enable easier onboarding of external liquidity from BTC and CEXes directly into Cardano DeFi.
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?
We will demonstrate that we can deliver a working MVP testnet bridge for BTC and USDC as the two core milestones followed by a final milestone to deliver a report.
We will provide updates on our progress.
Source code will be available to view on our github.
Milestone Title
Bitcoin Bridge Integrated With Testnet
Milestone Outputs
Users can use the testnet bridge to bridge Bitcoin into Cardano testnet in one shot.
Users can then bridge their wrapped Bitcoin out of Cardano back to Bitcoin.
Source code open source so that it's possible to independently verify
Acceptance Criteria
Users can use the testnet bridge to bridge Bitcoin into Cardano testnet in one shot.
Users can then bridge their wrapped Bitcoin out of Cardano back to Bitcoin.
Source code open source so that it's possible to independently verify
Evidence of Completion
Users can use the testnet bridge to bridge Bitcoin into Cardano testnet.
Source code open source so that it's possible to independently verify
Delivery Month
5
Cost
35000
Progress
70 %
Milestone Title
USDC Bridge Integrated With Testnet
Milestone Outputs
Testnet bridge demonstrating it's possible to bridge USDC into Cardano testnet - to be continued whether the USDC is from Arbitrum or Ethereum or another chain in which native USDC is available
Users will be able to use the bridge on testnet
Acceptance Criteria
Users can use the testnet bridge to bridge USDC into Cardano testnet in one shot.
Users can then bridge their wrapped USDC out of Cardano back to Ethereum or Arbitrum or another native chain in which USDC is available).
Source code open source so that it's possible to independently verify
Evidence of Completion
Users can use the testnet bridge to bridge USDC into Cardano testnet in one shot.
Users can then bridge their wrapped USDC out of Cardano back to Ethereum or Arbitrum or another native chain in which USDC is available).
Source code open source so that it's possible to independently verify
Delivery Month
5
Cost
35000
Progress
90 %
Milestone Title
Post-MVP Asssessment & Next Steps
Milestone Outputs
Following completion of the MVP, we will conduct a post-implementation review and opine on any challenges faced.
We will also describe the next steps required to take the bridge to mainnet and then further to integrating the bridge into dapps to offer full one shot DeFi integration for swaps, lending and borrowing.
Acceptance Criteria
Publication of Post-MVP Asssessment and next steps report and the Cardano community will be able to read and comment on the report.
Acceptance by community that the report represents a valid way forward.
Evidence of Completion
We will publish the Post-MVP Asssessment and next steps report and invite discussion from the community on next steps.
Delivery Month
6
Cost
10000
Progress
100 %
Please provide a cost breakdown of the proposed work and resources
We are requesting 80k ADA in total. 40k each for the working testnet bridges for Bitcoin and USDC. 10k for publication of the final report and next steps.
The cost breakdown will mainly be to develop the core bridging functionality, integrating the bridge with Cardano testnet, and researching the future roadmap for how we can turn this demonstrator into a production mainnet bridge + how we can then integrate full one shot DeFi capabilities.
How does the cost of the project represent value for the Cardano ecosystem?
If onboarding new users and liquidity into Cardano and making Cardano easier to use and accesssible are key objectives, then this project represents value for the Cardano ecosystem as we are both researching and demonstrating the core pre-cursor technology necessary to being able to bring liquidity in in one shot; and make it as easy as possible for non-Cardano users to start moving their assets in and using Cardano DeFi.
Terms and Conditions:
Yes
We are a team of three: Josh (CEO), Yulong (CTO), and Ben (CSO).
We spent more than four years together at Radix, a layer 1 protocol focused on DeFi that reached a peak of $4.2B marketcap and $50M TVL:
Prior to Radix Josh was at Metromile, NVIDIA, and Carnegie Mellon; Yulong was at Amazon, the layer 1 protocol AION, York University, and Wuhan University; while Ben was at PwC, Deloitte and the University of Leeds.