Last updated 3 months ago
Cardano's most urgent narrative is becoming the Bitcoin DeFi layer. Cardano needs a permissionless, safe and always live bridge from and to Bitcoin that anyone can use and integrate.
FluidTokens, ZkFold and Lantr have designed a new product called Bifrost: an optimistic bridge that leverages SPOs security and smart contracts to support permissionless BTC peg-ins and peg-outs.
This is the total amount allocated to Bifrost: Bitcoin-Cardano bridge secured by Cardano SPOs.
NB: Monthly reporting was deprecated from January 2024 and replaced fully by the Milestones Program framework. Learn more here
Please provide your proposal title
Bifrost: Bitcoin-Cardano bridge secured by Cardano SPOs
Enter the amount of funding you are requesting in ADA
739000
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?
Cardano's most urgent narrative is becoming the Bitcoin DeFi layer. Cardano needs a permissionless, safe and always live bridge from and to Bitcoin that anyone can use and integrate.
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
The product is fully open source under the GPLv3 license.
Please choose the most relevant theme and tag related to the outcomes of your proposal
DeFi
Describe your established collaborations.
Our product architecture is the result of months of research from:
FluidTokens - Their well-known senior team brings technical depth in DeFi, token management, account abstraction and development on both Cardano and Bitcoin.
ZkFold - Their deep expertise allows proving and verifying Zero Knowledge proofs between Bitcoin and Cardano, running the verifiers on Cardano smart contracts.
Lantr - Their previous research on this topic allowed the latest design of the Watchtowers, an open set of parties that submit the Bitcoin blocks on Cardano
Describe funding commitments.
All the partners’ work done so far for Bifrost has been paid by the partners' time and resources: we strongly believe that a proper Bitcoin-Cardano bridge is a public good that crucially benefits the whole Cardano ecosystem.
This grant will accelerate the development of the solution to a point where all the core components will have been developed and released. While we are committed to accomplish this product anyway, this grant allows us to deliver the results much faster, within the proposed timeline.
Describe your key performance metrics.
Our key metrics for measuring project success include:
Please describe your proposed solution and how it addresses the problem
We solve the bridging BTC problem - enabling BTC DeFi on Cardano - with Bifrost, an optimistic bridge that doesn’t suffer of the typical BitVM limitations (1-of-n trust assumption, liveness for pegging-out and granular peg-outs), leveraging Cardano key properties such as eUTxO architecture, Proof-of-Stake and network strong decentralisation level.
The core idea is to leverage Stake Pools (SPOs) consensus to protect the locked BTC on Bitcoin and to move the whole communication, peg-in and peg-out logic on the Cardano side.
SPOs know the Bitcoin confirmed state thanks to the Watchtowers, an open set of players that compete to write the correct chain of new Bitcoin blocks on Cardano. Anyone any time can become a Watchtower, even the user himself.
It’s important to note that Watchtowers cannot forge or change Bitcoin transactions, fully avoiding the risk of scamming SPOs.
In this way, users and institutions can independently peg-in and peg-out without intermediaries, knowing that the pegged-in BTCs are secured by the same entities (the SPOs) that are also already trusted for Cardano security.
The bridge is designed to leverage Cardano, but it can also flawlessly connect Bitcoin to Cardano layer 2s such as Midgard and Sundial.
Please define the positive impact your project will have on the wider Cardano community
Bifrost Bitcoin-Cardano bridge will deliver a critical positive impact in all aspects of our beloved community:
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?
All people involved in our teams are highly senior UTxO researchers and developers: our expertise fully covers Cardano and Bitcoin architecture and development, with a proven track record of successful protocols and infrastructure on both chains. We also have dedicated senior expertise in the Zero Knowledge field to ensure that Cardano on-chain validation allows us to prove anything that happens on the Bitcoin side.
All team members are well known and highly regarded in the Cardano community.
FluidTokens is also well known in the Bitcoin community.
We are fully equipped to execute this project from beginning to the end.
Milestone Title
Bridge Architecture Design Formalization
Milestone Outputs
Define the bridge core components, the flow of the happy and unhappy paths, the main smart contracts, the main algorithms used for signature aggregation and SPOs communication. Select a few relevant Cardano SPOs to receive ongoing feedback during Bifrost development.
Acceptance Criteria
Evidence of Completion
The official documentation will be updated to include all these outputs. Collaborating SPOs will be announced.
Delivery Month
1
Cost
82000
Progress
10 %
Milestone Title
Minimal Testable Version
Milestone Outputs
This iteration includes the implementation of the happy paths of the Watchtowers that post the Bitcoin confirmed blocks on Cardano, the SPOs on-chain registration, the permissionless peg-ins and the peg-outs.
Acceptance Criteria
Evidence of Completion
All smart contracts that involve the Watchtowers happy path, the SPO registration process, the peg-in and the peg-out will be added to the official repository. The Zero Knowledge code of these smart contracts is not included in this milestone.
Delivery Month
3
Cost
207000
Progress
30 %
Milestone Title
Minimal Usable Version
Milestone Outputs
This version includes SPOs coordination protocols to aggregate their Bitcoin signatures; the Watchtowers can challenge each other to post the correct Bitcoin fork; Zero Knowledge logic is added to truthfully prove the Bitcoin transactions.
Acceptance Criteria
Evidence of Completion
SPO program is now updated in the repository to allow coordination and signatures.
Watchtower program and smart contracts are now updated in the repository to allow fork challenge.
Previous smart contracts now implement the Zero Knowledge code.
Delivery Month
4
Cost
164000
Progress
50 %
Milestone Title
Minimal Loveable Version
Milestone Outputs
The unhappy paths and the edge cases are included in this Bifrost iteration, where malicious players, coordination problems and Cardano possible network saturation are correctly managed. Hardening, optimisations and tuning are part of this version.
Acceptance Criteria
Evidence of Completion
In the official repository, onchain smart contracts, SPO and Watchtower programs are now updated to include and manage edge cases and unhappy paths, while also being optimised and tuned where needed.
Delivery Month
5
Cost
181000
Progress
80 %
Milestone Title
Documentation, reporting and full end-to-end execution
Milestone Outputs
Publish open-source code and architecture documentation, with the evaluation of the bridge security, the edge cases and their mitigations. Execution of the main peg-in and peg-out flows. Create a final poll for SPOs to gather feedback about Bifrost, to check the commitment level and to understand how to proceed for the future incentivization phase.
Acceptance Criteria
Evidence of Completion
Delivery Month
6
Cost
105000
Progress
100 %
Please provide a cost breakdown of the proposed work and resources
This is the most delicate task as a good bridge design must take into account several factors such as the blockchains architecture nuances, the possible saturation levels of Cardano network, the presence of bad participants and the scalability factors.
Smart contracts for all the main actions need to be sound, permissionless and avoid concurrency issues, leveraging Cardano strength points and allowing validation, minting of BTC, etc.
Watchtowers monitor the Bitcoin network and post the latest confirmed blocks on Cardano, having to also interact and monitor the Cardano network. The code must be easy to use so anyone can become a Watchtower.
SPOs need to manage their Bitcoin keys, monitor the stake distributions, interact with Cardano smart contracts and coordinate safely.
This version of the Bifrost bridge must be properly described and open-sourced.
Catalyst reports and milestones management are included here.
Execution of the main end-to-end flows also require some budget
How does the cost of the project represent value for the Cardano ecosystem?
The cost of our product Bifrost represents a critical value for Cardano.
Cardano as the Bitcoin DeFi layer is one of the most important and urgent narratives for the ecosystem. A solid safe bridge is the only component that is stopping Cardano to start onboarding real BTC.
On-chain volume, ADA value and new users onboarding will immensely benefit from a secure 2-way bridge that taps into the 2.3 trillion $ Bitcoin ecosystem.
Cardano will also position itself as the first and only top 10 blockchain that is able to directly communicate with Bitcoin.
Terms and Conditions:
Yes