Levvy V3 Phase 2: Stake/Gov, Pooled & Leverage

[Proposal setup] Proposal title

Please provide your proposal title

Levvy V3 Phase 2: Stake/Gov, Pooled & Leverage

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

250000

[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?

Cardano lacks non-custodial markets for renting staking/voting power and pooled lending; Levvy is P2P-only today, limiting liquidity, rate discovery, and capital efficiency.

[Proposal Summary] Supporting Documentation

Supporting links

• https://levvy.fi/

[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

Levvy smart contracts are currently private and will be open-sourced during Phase 2 (at or prior to mainnet). License to be finalized (permissive—MIT or Apache-2.0). Off-chain Levvy Reapers, integration examples, and documentation will be published publicly.

[Theme Selection] Theme

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

Lending

[Campaign Category] Category Questions

Describe your established collaborations.

• Xerberus: Integrated Xerberus risk ratings into Levvy for real time ratings of Cardano native tokens. This allow our users to make more informed decisions when lending and borrowing.
• DexHunter: Integrated DexHunter aggregator into Levvy allowing lenders to sell their defualted tokens directly through our application if they choose.

Describe funding commitments.

• No external grants or overlapping Catalyst funds.

• Angel Finance will cover routine ops and any cost overrun beyond ₳250k, if required.

• Audit window sized within budget; co-funding not required.

Describe your key performance metrics.

**Levvy product metrics: **

• Total loan volume: ₳264.68M

• Total interest earned: ₳3.32M

• Total value locked (TVL): ₳1.76M

• Total loans: 81,526 | ** Active loans now:** 873

**Derived indicators: **

• Avg loan size: ≈ ₳3,246.57 (₳264.68M / 81,526)

• Realized aggregate interest vs. volume: ≈ **1.25% **(₳3.32M / ₳264.68M) — not APY; realized aggregate yield.

• Active-loan ratio: ≈ 1.07% (873 / 81,526), indicating fast turnover and continuous market use.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Objective: Evolve Levvy from P2P-only to an all-in-one DeFi platform by adding Pooled Lending/Borrowing and Leverage Trading, alongside Stake and Governance power rental. Liquidation and expiry automation are executed by Levvy Reapers.

1) Stake Lending / Borrowing

• Lenders escrow ADA with staking rights; borrowers rent staking power for a defined term (with fees/collateral as configured).

• Guarantees: term enforcement, expiry, and automatic reversion of rights; on-chain events for auditability.

2) Governance Lending / Borrowing

• Time-boxed rental of voting power (e.g., dRep weight).

• Guarantees bounded rights, automatic reversion, and traceability of who held voting power when.

3) Pooled Lending / Borrowing

• Shared liquidity pools with pool-share tokens; interest/fees distributed pro-rata.

• Composability: pools callable by other contracts and strategies.

• Levvy Reapers monitor positions and execute liquidations/forcible unwinds when health factors breach limits.

Leverage Trading (new)

• Isolated margin accounts that borrow from pools to open leveraged long/short positions via DEX adapters.• Oracle-driven health factor; liquidations by Levvy Reapers with clear incentives and liveness guarantees.• Events for PnL, fees/funding, liquidations; routing layer for approved DEXes.

Design principles

• Explicit, auditable state machines; no hidden admin drains.

• Clear failure modes: oracle stalls, timeouts, reorgs, mempool pressure; Reaper retry/backoff/failover.

• First-class composability (wallets, bots, other contracts).

[Your Project and Solution] Impact

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

• Utility expansion: Staking/voting rental unlocks new use cases for SPOs, dReps, DAOs.

• Liquidity depth & capital efficiency: Pooled markets reduce fragmentation; leverage enables capital-efficient exposure with guard rails.

• Open standards: Contracts, Reaper specs, and examples (open-sourced) lower integration cost for wallets/dashboards/strategies.

• Transparency: Rich events enable analytics, risk dashboards, and community oversight.

[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?

• Spec-first engineering: publish state diagrams, transitions, invariants for pooled & leverage; Reaper protocol (APIs, incentives, liveness).

• Validation: unit & property tests (fees, share accounting, HF/liquidations, expiry/default); adversarial tests (oracle stalls, rollbacks, congestion).

• Rollout: public preview → testnet → audit → mainnet; operator guide for third-party Levvy Reapers.

[Milestones] Project Milestones

Milestone Title

Milestone 1 — Specs & Test Plan (Month 1)

Milestone Outputs

• Stake Lending — escrow of staking rights, term/fee accrual, expiry & reversion, events; invariants and edge cases.

• Governance Lending — time-boxed voting power rental, rights boundaries, reversion, audit trail; invariants and edge cases.

• Pooled Lending — share math, deposits/withdrawals, accrual/interest distribution, reserve handling.

• Leverage Trading — margin accounting, health-factor calculation, liquidation rules, position lifecycle.

• Levvy Reapers — interfaces, incentives, liveness/retries/failover and operator guide outline.

Acceptance Criteria

• Specs and test plan are clearly defined and documented for the entirety of the Levvy V3 Stage 2 build.
• Create or expand Github repository for Levvy V3 Stage 2 build.
• Documentation is formatted for easy submission and review.

Evidence of Completion

• Link to Github repository.

• Link to build documentation.

• Submit specs and complete test plan.

Delivery Month

1

Cost

35000

Progress

20 %

Milestone Title

Milestone 2 — Contract Implementations (Months 2–3)

Milestone Outputs

• Stake & Governance rental contracts.

• Pooled Lending with utilization rate model, reserves, parameters.

• Leverage Trading core (margin vault, HF calc, liquidation rules).

Exit: ≥90% unit/property coverage; preview deployments.

Acceptance Criteria

• Stake Lending:

  • Secure escrow and ownership transfer via validator scripts and UTXO locks.

  • Accurate term/fee accrual using slot timestamps, no arithmetic errors.

  • Automatic expiry/reversion with atomic UTXO transitions.

  • Full test coverage and property testing for invariants/edge cases.

• Governance Lending:

  • Voting-only rights with spending constraints.

  • Atomic reversion via UTXO state restoration.

• Pooled Lending:

  • Solvency for deposits/withdrawals via validations.

  • Fair interest distribution via script updates.

  • Scalable pool design via stress tests.

• Leverage Trading:

  • Accurate margin/oracle accounting via datum updates.

  • Reliable health-factor triggers via checks.

  • Proper liquidation rules via atomic executions.

• Levvy Reapers:

  • Validated interfaces via scripts.

  • Aligned incentives/liveness via simulations.

  • Uptime retries/failover via tests.

  • Comprehensive guide via documentation coverage.

Evidence of Completion

• Video evidence of testing.
• Links to Github repository.
• Links to build documentation.
• Submit smart contracts.

Delivery Month

3

Cost

105000

Progress

60 %

Milestone Title

Milestone 3 — Off-chain, Indexer/API & DEX Adapters (Month 4)

Milestone Outputs

• Indexer/API for markets/positions/events; monitoring hooks.

• Reference Levvy Reapers (expiry & liquidation) + at least one DEX adapter.

Exit: End-to-end preview flows; soak tests passing.

Acceptance Criteria

• Indexer/API:

  • Query API returns correct UTXO data for markets/positions.

  • Validate datum/redeemer in API response matches Plutus script.

  • Test API consistency with on-chain state via Cardano node.

• Monitoring Hooks:

  • Webhook triggers on transaction submission/confirmation.

  • Verify hook logs match UTXO spend/creation events.

  • Test retry logic for failed transactions due to contention.

Evidence of Completion

• Video evidence Indexer/API and Monitoring Hook testing.

• Links to Github repository.

• Links to build documentation.

Delivery Month

4

Cost

50000

Progress

80 %

Milestone Title

Milestone 4 — Security Review & Testnet (Month 5)

Milestone Outputs

Milestone 4 — Security Review & Testnet (Month 5)

• Static analysis, fuzzing, external audit window; bug bounty instructions.

Exit: All high/critical issues resolved; public testnet guide.

Acceptance Criteria

• Static Analysis: Run tools on scripts and verify no errors in code paths.
• Fuzzing: Execute fuzz tests on smart contracts and confirm no crashes or invalid states.
• External Audit Window: Provide audit report from a reputable firm and verify findings addressed.
• Bug Bounty Instructions: Publish clear bounty program and confirm submissions handled.
• Confirm all high/critical issues fixed via re-audit or logs.
• Verify Testnet deployment on Cardano testnet.

Evidence of Completion

• Static Analysis: Share report showing no errors.
• Fuzzing: Provide logs/test results proving no crashes or invalid states.
• External Audit: Submit audit report from a reputable firm and include issue resolution log.
• Bug Bounty: Publish bounty information.
• Provide re-audit report confirming high/critical issues fixed.
• Share public testnet deployment link.

Delivery Month

5

Cost

45000

Progress

90 %

Milestone Title

Milestone 5 — Mainnet Release & Handover (Month 6)

Milestone Outputs

• Final configuration (risk limits, curves), governance keys, ops runbooks.

• Documentation, examples, video walkthroughs; Reaper operator docs.

Exit: Contracts verified; docs complete; KPI dashboard live.

Acceptance Criteria

• Final Configuration:
  • Risk limits/curves set in scripts and tested.
  • Governance keys active and access tested.
  • Ops runbooks shared and steps confirmed.
• Documentation:
  • Docs, examples, videos published and accessible.
  • Reaper operator docs clear and verified.
  • Contracts live on-chain and verified.
  • All docs complete.
  • KPI dashboard active and showing metrics.

Evidence of Completion

• Main net goes live post contract audits.
• Open source code.
• Confirm all documentation.
• Share live KPI dashboard.

Delivery Month

6

Cost

15000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

(Total: ₳250,000)

• Smart-contract engineering — ₳80,000 (Stake/Gov, Pooled, Leverage; tests)

• Backend/indexer/API — ₳40,000 (states/endpoints/events; Reaper endpoints; monitoring hooks)

• Frontend integration — ₳30,000 (pool-share UI; leverage position UI; core flows)

• Security & external audit — ₳45,000 (static analysis, fuzzing, external review)

• Infrastructure & SRE — ₳30,000 (preview/testnet/mainnet monitoring, metrics, alerting, ops runbooks)

• Docs, examples, community — ₳25,000 (specs, diagrams, tutorials, Reaper operator guide, how-tos)

[Final Pitch] Value for Money

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

• High leverage: upgrades Levvy from fragmented P2P to platform-level markets (pools + leverage) with better UX and rate discovery.

• Open source (planned): permissive licensing reduces duplication and speeds integrations.

• Risk-aware delivery: formal specs, property tests, and third-party audit reduce mainnet risk and long-term maintenance.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes