Oracle for Interest Rate Derivatives

[Proposal setup] Proposal title

Please provide your proposal title

Oracle for Interest Rate Derivatives

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

99480

[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?

Interest Rate Derivatives, the largest global market with trillions in daily volume, lack on-chain data via Cardano Oracles, limiting TradFi and Cardano DeFi development

[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

[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).

There is currently no on-chain interest rate data for USD or EUR on the Cardano blockchain, which is essential for enabling applications that trade and settle Interest Rate Derivatives. We have already delivered BlockMargin on the Cardano testnet using a custom oracle model to consume this data, though the current oracle is centralized. This proposal aims to port the oracle to a major Cardano oracle provider, source data from multiple interest rate brokers, and establish agreements with those brokers to publish reliable interest rate data on-chain for developers to build with.

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

We will connect to the APIs of three interest rate brokers or data providers and create scripts to pull and standardize the data hourly before publishing it on-chain using the Charlie3 Oracle platform. The interest rate curve data will be made available to dApp developers as Inline Datums, which can be accessed by both Web2 applications and smart contracts (e.g., written in Aiken). We will negotiate agreements with the data providers to ensure that the on-chain publication complies with their terms and conditions, including implementing any necessary data delays to meet those requirements.

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

This project will deliver Cardano’s first institutional-grade interest rate oracle, sourcing data from three reputable brokers and publishing it on-chain via Charlie3. It will provide a daily USD interest rate curve, enabling dApps like BlockMargin and supporting new DeFi use cases for trading and settling interest rate derivatives on Cardano. Using multiple data sources ensures accuracy and resilience, while Charlie3’s neutral role adds trust. We have already consulted with the Charlie3 team to confirm support for this interest rate curve data model.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

This proposal aims to:

• Source USD interest rate data from three external providers at regular intervals.
• Publish the interest rate data on the Cardano blockchain via an established oracle provider, such as Charlie3.
• Open source a GitHub repository with example code demonstrating how to consume the oracle data in a Web2 dashboard using JavaScript and in smart contracts using Aiken.

A prototype of this oracle, using our bespoke data model, is already running on the Cardano Preview testnet.

The screenshot below shows our custom oracle displaying a USD Interest Rate Curve in a dashboard.

The next screen shows how the market data is pulled from external sources and processed (left-hand side) and then pushed into a UTXO on-chain as an Inline Datum

And this is an example of transaction with updated Oracle prices, and a printscreen of the data model how the interest rate is curve is stored on-chain

https://preview.cardanoscan.io/transaction/0145da71f4e255e3a02a248ffc79a885a296cd95ff19b4609ece69526ed9c6ff?tab=utxo

In this example the oracle holds the USD interest rates with their respective maturity points (represented as timestamps). The data is structured as an array as it needs to hold the Interest Rate Curve with individual rates at different maturity points

Once the data is pushed on-chain it can be consumed by Web2 applications and smart contracts as is currently done by the our BlockMargin application that is currently running on a testnet at: https://blockmargin.app/trade

[Your Project and Solution] Impact

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

For Cardano to support real-world trading and settlement of Interest Rate Derivatives, applications must have accurate, trustworthy, and tamper-resistant market data. In TradFi, this data is taken for granted, but in DeFi it must be sourced and delivered on-chain in a way that developers and counterparties can trust.

Relying on a reputable, independent oracle provider ensures that no single application or developer controls the data feed, reducing the risk of manipulation or bias. Sourcing rates from three separate, established interest rate brokers creates redundancy and enables cross-verification, so that incorrect or anomalous prices from one source don’t corrupt the on-chain market.

This is critical because interest rate derivatives represent the largest financial market in the world - with over $250B in daily volume between small corporates, retail, and institutions, and more than $5T daily when including large corporates. Any DeFi system serving this market must meet high standards of integrity, reliability, and transparency to win institutional trust.

By implementing a robust oracle solution with multiple independent data sources, Cardano developers gain the market-grade inputs needed to power a new wave of DeFi apps - ranging from trading platforms to settlement systems - on top of the proven feasibility demonstrated by BlockMargin on testnet. This forms the infrastructure layer for a future ecosystem where global interest rate derivative activity can be conducted on Cardano with the same confidence as in traditional markets.

[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?

This proposal leverages from the Oracle implementation done for BlockMargin, adds more rigour to it and aims to publish it to the Cardano Mainnet. Charlie3 will provide their existing oracle infrastructure and we will negotiate terms with data providers from where the data will be sourced

The team has successfully delivered 4 out of 5 of their previously funded Catalyst projects. We are on the final milestone of the remaining project which is the building of BlockMargin on the testnet.

The key team members, Dmitry and Sergio, have decades of experience with trading and settling these types of Interest Rate derivative contracts and have worked together at a large financial institution in the Netherlands

We have identified 3 data providers and have established a working relation with each.. If the proposal is approved we will progress with testing the data provider’s data feeds and work with Charlie3 to integrate them into their oracle platform

Dmitry spent over a decade in Risk Management and Trading, managing multi-million dollar positions for the bank and the bank’s clients. Sergio is a banking professional with hands-on expertise in Regulation and bank-to-corporate interactions. They both have deep connections in the industry necessary to convince large financial institutions to do a pilot.

[Milestones] Project Milestones

Milestone Title

Interest Rate Curve Data Model

Milestone Outputs

This milestone will integrate the interest rate curve data model into the Charlie3 infrastructure. Unlike traditional oracles, which typically provide a single price, this oracle is designed to deliver a full interest rate curve with multiple maturity points, enabling more complex financial applications such as interest rate derivatives. The design of this oracle was first developed during the BlockMargin testnet build using proprietary data and our unique data model. Since then, we have worked closely with Charlie3, who have agreed to adapt their infrastructure to support this specialized use case.

The project will involve collaboration with Charlie3’s development team to port our data model into their system, ensuring that smart contracts and Web2 dashboard queries can seamlessly interact with the new oracle. This integration will enable Cardano-based dapps to access accurate and reliable interest rate curve data on-chain, paving the way for new DeFi applications and trading opportunities.

Acceptance Criteria

• The interest rate curve model is successfully integrated into Charlie3 infrastructure
• The model is available on the Cardano testnet to accept interest rate curve data.
• Test data is loaded into the Oracle and it behaves as expected

Evidence of Completion

Video walkthrough showing:

• Test data being loaded into the Charlie3 oracle on the testnet
• Successful creation and use of the interest rate curve data model

Delivery Month

3

Cost

24000

Progress

20 %

Milestone Title

Fetch Spot Curve and Bootstrap Forward Curve

Milestone Outputs

This milestone focuses on establishing automated access to interest rate data from multiple providers. Agreements will be finalized with each data provider to fetch market data at hourly intervals via their APIs. The providers will supply a Spot Interest Rate Curve, which includes rates at different maturities - a standard reference in the world of interest rate derivatives and widely used for pricing applications.

To ensure consistency, the Spot Curves from all providers will be standardized to the same set of maturities, with interpolation applied where necessary. These Spot Curves will then be converted into Forward Curves, which are required to project future cash flows for interest rate derivatives—a process commonly referred to as bootstrapping. The bootstrapping method will be implemented in consultation with the Charlie3 team. Once completed, the computations will be tested for stability, and a test load of the aggregated USD interest rate curve will be performed on a testnet to ensure reliability.

Acceptance Criteria

• Data is automatically fetched from the targeted three providers; if one provider is unavailable, an alternative will be sourced.
• Forward Curves are bootstrapped correctly and meet expected results.
• The full process runs automatically on an hourly basis for at least three days

Evidence of Completion

A video walkthrough of:

• The logs evidencing that the data is being pulled on an hourly basis (during US trading hours) from the external data provides and
• The bootstrapping of the curve is performed

Delivery Month

6

Cost

21000

Progress

50 %

Milestone Title

Implement Oracle on Testnet

Milestone Outputs

This milestone covers integrating external data providers and publishing the aggregated USD Forward Interest Rate Curve on the Charlie3 infrastructure running on a Cardano testnet. Agreements will be finalized with the data providers, and real-world USD Forward Rate data will be published on-chain on an hourly basis during US trading hours. Where required, data publication may include a delay to comply with the providers’ terms and conditions.

Acceptance Criteria

• The USD Forward Curve is computed using data from the external providers.
• The Forward curve is tested for stability when the spot curve takes different shapes. Because the Forward curve is an algorithm we will check that it behaves as expected under different plausible market conditions
• The aggregated curve is successfully pushed to the Charlie3 testnet infrastructure.

Evidence of Completion

• A link to the Charlie3 oracle on the testnet showing the published data.
• A video walkthrough demonstrating the published data and explaining what it represents.

Delivery Month

9

Cost

19080

Progress

70 %

Milestone Title

Implement Oracle on Mainnet

Milestone Outputs

Migrate the aggregated USD Forward Interest Rate data from the testnet to the Cardano Mainnet. The oracle will be accessible via the Charlie3 main website and available for dApp developers to consume.

A GitHub repository will be provided containing sample code in JavaScript for Web2 dashboards and Aiken for smart contracts, demonstrating how to consume the oracle’s market data.

Acceptance Criteria

• The USD Forward Curve is published hourly on the Cardano Mainnet via the Charlie3 oracle.

Charlie3 is the primary oracle partner, but the project reserves the right to engage with other reputable Cardano oracle providers if necessary to complete the project

Evidence of Completion

• A link to the live USD Forward Curve oracle showing data updates hourly during US trading hours.
• A link to the GitHub repository with sample JavaScript and Aiken code illustrating how to consume the oracle data.

Delivery Month

12

Cost

35400

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

The budget is estimated based on 40 hours per week and 4 weeks per month.

Milestone 1: Interest Rate Curve data model

• One Senior Developer 40h per week for 4 weeks @ $60/h
• One Junior Developer 40h per week for 4 weeks @ $30/h
• One Data Expert 20h per week for 4 weeks @ $60/h

Total 19,200 USD

Milestone 2: Fetch Spot Curve and Bootstrap Forward Curve

• One Senior Developer 40h per week for 2 weeks @ $60/h
• One Junior Developer 20h per week for 4 weeks @ $30/h
• One Data Expert 40h per week for 4 weeks @ $60/h

The second milestone is more intensive in data modelling. Correct code needs to be implemented for bootstrapping of a Forward Curve. This traditionally required a compiled language code, or at a minimum Python

Total 16,800 USD

Milestone 3: Implement Oracle on the Testnet

• One Senior Developer 40h per week for 2 weeks @ $60/h
• One Junior Developer 20h per week for 4 weeks @ $30/h

Additionally we expect to sign agreements with external data providers and start paying fees for the data fees. We are estimating the data feed to be 1,000 USD per month per provider - this estimate is based on the cost of a Bloomberg license which costs approximately 2,000 USD per month and has interest rate curves from multiple currencies, so we expect the API data sources to be somewhat cheaper

1,000 USD license fee per month for per data provider x 3 data providers = 3,000 for the first month to activate the feeds

The cost to write the Oracle data on-chain we estimate to be 1.5 USD per Oracle update, and there will be 8 Oracle updates per day during and 22 business days in a month, which equates to 176 Oracle updates per month. At a cost of 1.5 USD per Oracle update this would be 264 USD per month

Total 15,264 USD

Milestone 4: Implement Oracle on Mainnet

• One Senior Developer 40h per week for 4 weeks @ $60/h
• One Junior Developer 20h per week for 2 weeks @ $30/h
• One Data Expert 5h per week for 4 weeks @ $60/h
• 5 months of license fees and Oracle update costs @ $3,264 per month

Any variation in the final cost of the license fee with the external data providers will be used to lengthen (or shorten) the number of months that the feed will be live and paid for on the Mainnet. After the license lapses we will engage with the community to find means on how to extend it further should there be enough demand for it.

Total 28,320 USD

Total for project 79,980 USD

A conservative ADAUSD exchange rate of 0.8 is assumed for the budgeting. At this level we are happy to hold ADA if the price drops significantly below that

Total for project in ada 99,480

[Final Pitch] Value for Money

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

The Interest Rate Derivatives market is by far the largest in the world, with over $250 billion in daily volume from small corporates, retail, and institutions - and more than $5 trillion when large corporates are included.

We’ve already proven on Cardano’s testnet that these products can be represented and traded using the UTXO model, Aiken, and native tokens (through our BlockMargin prototype https://blockmargin.app/trade ) The next step is to make high-quality market data available on-chain so other teams can build real trading and settlement applications.

This project will deliver the first institutional-grade interest rate oracle on Cardano by sourcing data from three independent, reputable brokers and publishing it through Charlie3’s infrastructure.

Using multiple sources ensures accuracy and resilience, while working with an established, neutral oracle provider builds trust — essential for adoption by serious market participants.

The budget reflects typical industry contract rates:

• $60/hour for senior developers. In line with global blockchain developer contract rates, often ranging from $50–$100/h
• $60/hour for data experts. In line with specialist quantitative finance/data engineering roles, in Western markets.
• $30/hour for juniors. In line with typical $35–$50/h junior blockchain dev rates.

Typical range estimated from glassdoor.com

Data licensing costs have been conservatively estimated at $1,000 per provider per month, far less than a Bloomberg subscription, and on-chain publishing costs are based on current Cardano fees.

For under 100k ada, this project will move from proof-of-concept to a fully functioning, reusable oracle and code base.

It will give Cardano developers the tools they need to tap into the world’s biggest financial market, laying the foundation for a new class of DeFi applications with the potential to bring unprecedented liquidity and institutional engagement to the network.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes