Last updated a week ago
SteelSwap is a DEX aggregator that outperforms other solutions while charging lower fees. We propose upgrades to increase adoption of SteelSwap, open source tools, and increase transaction volume.
We will improve the UI to improve trading experience, create a portfolio page, create open source tools for AI integrations (wallet, trading, etc), and upgrade infrastructure for increased load.
Please provide your proposal title
SteelSwap V2
Enter the amount of funding you are requesting in ADA
250000
Please specify how many months you expect your project to last
9
Please indicate if your proposal has been auto-translated
No
Original Language
en
What is the problem you want to solve?
SteelSwap is a DEX aggregator that outperforms other solutions while charging lower fees. We propose upgrades to increase adoption of SteelSwap, open source tools, and increase transaction volume.
Supporting links
Does your project have any dependencies on other organizations, technical or otherwise?
Yes
Describe any dependencies or write 'No dependencies'
SteelSwap is dependent on Dendrite, an open source DEX transaction building tool. Dendrite started as a close source part of SteelSwap, but in collaboration with Charli3, it was open sourced as a resource for the community. It is still actively maintained by the maintainers of SteelSwap.
Will your project's outputs be fully open source?
No
License and Additional Information
Charli3-Dendrite is and will remain open source under the permissive MIT license, which allows it to be use both for public and private/commercial use cases.
The Cardano Wallet MCP for AI integrations will be made open source under the MIT license.
UI and infrastructure upgrades will not be made public, but tools used to interact with infrastructure have already been made publicly available under an MIT license (kupo-py, dbsync-py).
Please choose the most relevant theme and tag related to the outcomes of your proposal
DEX
Describe your established collaborations.
Eternl - We currently are integrated into Eternl's MonsterSwap aggregator, which provides in-wallet swaps to Eternl users.
Charli3 - Collaborate on Dendrite Python DEX SDK and the Price API, which helps improve bot/algorithmic trade development and makes Cardano price data more easily accessible.
Describe funding commitments.
We currently have no funding commitments, and are solely funded by ourselves and the nominal amount of fees that are generated from operations. The improvements described in this proposal will allow us to increase adoption and transaction volume.
Describe your key performance metrics.
Our key performance metrics are number of unique trading addresses, transactions, and total volume denominated in ADA. With this proposal, we will also include metrics for stablecoin volume to show how features proposed here will increase stablecoin volume.
Please describe your proposed solution and how it addresses the problem
SteelSwap consistently outperforms other DEX aggregators when considering trading value, and charges the lowest fees. It was originally developed to create a trading interface for AI, but the Cardano community has found it to be a reliable resource. Here, we propose upgrades to SteelSwap to improve the UI for better trader experience, changes to infrastructure to make it more scalable allowing us to publicly expose our API for more general usage (increasing trading volume), exposing SteelSwap as a model context protocol (MCP) for easy integration into agentic AI (increasing trading volume), and new swap features specifically targeting stablecoin volume.
Model Context Protocols (MCPs) are standardized mechanisms for AI agents to integrate with tools. We will build two MCPs that will help improve AI integrations into Cardano DeFi. The first MCP (cardano-wallet-mcp) will be a general wallet integration that allows an AI agent perform simple operations like send, sign (with and without user approval), get balance, and submit transactions on chain. This MCP will be fully open sourced with an MIT license and will not be tied to any specific project, giving people a wide audience of people the ability to add basic on chain interactions into any AI agent or interface. The second MCP (steelswap-mcp) will be close sourced but will allow for AI agents and interfaces to retrieve estimates, build swaps, check on swap status, and build cancel transactions. The steelswap-mcp combined with the cardano-wallet-mcp will allow AI agents to both get optimal trade information as well as sign and submit them on chain.
A consistent piece of feedback we receive is that the UI for SteelSwap is very stripped down relative to other options, which prevents adoption for many traders. Key UI improvements include charting and all trades for a pair. In addition to this, we will create an improved swap preview that provides even more visual transparency for the swap mechanisms included in a transaction. SteelSwap is the most advanced aggregator engine on Cardano, and has pioneered swap hops that executes limit orders that can be executed in a single transaction and forwarded to a DEX order contract. The swap preview enhancements would help to better display the complex routing that SteelSwap offers. A new portfolio page would be included to show data and statistics on the value of a users wallet.
SteelSwap has had a closed API due to server load and costs. With the experience and data we have collected, we have identified a variety of ways the infrastructure could be improved to serve heavier demand, allowing for more integrations. Many of the pain points in the current infrastructure are around order history and swap tracking. Upgrades to the infrastructure would not only resolve some outstanding bugs and paint points, but would also allow for additional features such as batcher health monitoring and improved slippage calculations by monitoring outstanding orders both in the mempool and on chain to improve the smoothness of on chain swaps. With the infrastructure and integrations improvements, we will create a public API free to access for at least 1 year for all endpoints. In addition to this, we will create widget for easy integration into dApps, and a free batcher status page for Cardano users to detect when batchers are down.
SteelSwap has been a pioneer in novel integrations of DEXs. In particular, SteelSwap was the first to introduce aggregating Minswap routing through multiple Minswap pairs and the introduced "Swap Hops", which are a way to fill a limit order instantly on one or more select DEXs that are instantly fed into an order on any DEX on Cardano. This helps to bridge liquidity across sources on Cardano, and improve outputs for CNT to CNT trades. Currently the swap hop mechanism is all or nothing, where if the output of a swap hop is better than a plain swap then a swap hop will be used. A better implementation is to have the swap hop operate in parallel to other trades so that a swap hop can be combined with any other set of trades. This will be particularly helpful in bridging liquidity across sources.
In addition to development work for Swap Hops, we will also introduce another new mechanism call Flash Swaps that will help to further bridge liquidity and volume for stablecoins. Flash Swaps are a mechanism for distributing slippage across mutliple pools but involve some risk to a 3rd party provider. Funding for this proposal will support the building and testing of Flash Swaps, and SteelSwap will take on the 3rd party risk involved in executing Flash Swaps. In particular, SteelSwap will be a 3rd party provider to facilitate Flash Swaps for stablecoins, which will help to distribute slippage and increase volume for stablecoins on chain. Although SteelSwap will be a 3rd party provider for Flash Swaps, the mechanism of Flash Swaps is a trustless and non-custodial mechanism so that a trader does not need to trust SteelSwap in order to use Flash Swaps.
Please define the positive impact your project will have on the wider Cardano community
SteelSwap has been a pioneer in innovating new swap routing solutions that help to increase DEX volume and utility. We have been at the bleeding edge of many integrations, and where possible we create unique integrations that save traders money and provide new utility to traders. One example of this is Splash and the Swap Hop mechanisms. Since Splash has open pool executions, it's possible to perform a direct swap against a Splash pool where the outputs are fed directly into another swap order. This is particularly useful for some tokens such as OADA that are directly pegged to the price of ADA, and with the swap hop mechanism OADA can be traded as if it were ADA being traded because the OADA/ADA pool can be used to convert OADA to ADA and in the same mechanism feed the ADA into a subsequent trade all in the same transaction.
Funding this proposal will have broad impact including AI integrations on Cardano, more utility for bridging DEX liquidity with new functionality specifically for stablecoins, and more tools for broader adoption of the most advanced swap engine on Cardano.
The AI integrations are important since AI can automate on chain operations, increasing volume. The AI integrations we propose will help to lower the threshold for integrating AI into Cardano, since MCPs have become the plug and play interface for AI tooling. The AI integrations include a full MIT open sourcing of a wallet MCP, which will allow people to self host a minimal wallet for an AI agent that can be accessed using both retail AI users (e.g. Claude Desktop) as well as more advanced agent developers. The MIT licensing will allow people to use and adapt the code for both public and private usage without restriction. Further, the SteelSwap MCP will allow both retail and AI agent developers to have access to the SteelSwap engine for performing trades and executing strategies.
The UI improvements will help traders make more informed decisions when making trades, allowing them to observe trends, observe volume, and better understand their portfolio of tokens held in their wallet.
The infrastructure and integrations will improve the ability of SteelSwap to have a larger impact on Cardano in general, by making it even more accessible. Better access to SteelSwap will enable better liquidity bridges across fragment pools, improving protocol utilization as well as giving better value to traders. Further, a public good will be created to allow both protocols and users to know when batchers are having issues.
Swap Hops and Flash Swaps will support SteelSwap in its mission to find the most efficient swap routes, bridging liquidity wherever possible. In particular, SteelSwap will dedicate resources to increase stablecoin volume through Flash Swaps.
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?
I have a strong history of building infrastructure and open source solutions on Cardano, and have developed a strong reputation for delivery through the high quality of swap mechanisms through SteelSwap. In addition to contributing to open source projects fundamental to the use of Python on Cardano (cbor2 and pycardano), I also maintain Dendrite (previously funded by Catalyst and fully delivered) that has over 2000 downloads/month. Dendrite is an open source package that SteelSwap uses to build all transactions. I have also made major contributions to the Charli3 price API (previously funded by Catalyst and delivered pending review), developing both the infrastructure and data pipelines to ensure scalability. I have a track record of delivering products I propose, and also delivering consulting and development services to projects including Minswap and Metera.
I can validate if my approach is feasible based on my experience in Cardano, over 2 years of constant DEX aggregation operations, and experience as an AI engineer and developer.
The way we can validate if our approach will increase transaction volume and adoption will be through number of unique wallets and transaction volume. We can measure the impact on stablecoin volume by monitoring and reporting stablecoin pool volumes.
Milestone Title
AI Integrations
Milestone Outputs
cardano-wallet-mcp
steelswap-mcp
Acceptance Criteria
Implementation of the MCPs and tools included in each MCP at a minimum. The cardano-wallet-mcp must have both a public Github repository as well as a public Docker respository for people to easily pull and use. The steelswap-mcp must be publicly accessible with reasonable rate limits (for example, 500 calls per day).
Evidence of Completion
Open source repository on Github for the cardano-wallet-mcp, complete with two local deployment options including a command line interface (CLI) as well as a Docker container.
A video showing how a user can install the MCPs and use them in end user interfaces (e.g. Claude Desktop) to get swap estimates, build, sign, and submit swaps. This will require a combination of the cardano-wallet-mcp that can sign transactions and the steelswap-mcp will be required to get swap estimates and transactions.
Delivery Month
2
Cost
50000
Progress
20 %
Milestone Title
Infrastructure and Integrations
Milestone Outputs
Infrastructure Upgrades
Public API
SteelSwap Widget
Batcher Status Page
Acceptance Criteria
Delivery of milestone outputs for both infrastructure upgrades and the public API. Documentation for the API should have examples on how to use it, including an example of how to build a simple trading bot.
Evidence of Completion
A publicly available API with documentation on how to use it.
A documentation page for the SteelSwap widget to describe how to integrate the widget into a dApp.
A link to the batcher status page.
Delivery Month
5
Cost
100000
Progress
60 %
Milestone Title
UI Improvements
Milestone Outputs
UI Improvements
Acceptance Criteria
All UI improvements described in the milestones have been completed and implemented into the SteelSwap UI. Price charts should be displayed on the swap page at a minimum. The portfolio page will be a separate tab that shows the wallet contents and current value of all tokens in ADA at a minimum.
Evidence of Completion
A video showing that the milestone outputs have been incorporated into the SteelSwap UI. A link to the current SteelSwap page will also be included, with instructions on how to navigate to each implemented feature to verify successful completion.
Delivery Month
7
Cost
50000
Progress
80 %
Milestone Title
Hop Swaps and Flash Swaps
Milestone Outputs
Swap Hops
Flash Swaps
Acceptance Criteria
Completion of all milestone outputs. This includes the Medium article along with successful implementation of parallel swap hops and flash swaps, and easy visualization of how swaps are routed using these new features in the swap preview.
Evidence of Completion
A link to a medium article describing the mechanism of Flash Swaps, including risks involved to 3rd party providers for executing them.
A video showing successful execution of a swap hop.
A video showing successful execution of a flash swap.
Delivery Month
9
Cost
50000
Progress
100 %
Please provide a cost breakdown of the proposed work and resources
We estimate all budgets in ADA, using an estimate ADA price of $0.7.
Market rates for developers:
Elder Millenial - 285 ADA/hr
Mark - 214 ADA/hr
Milestone 1 (50,000 ADA):
Server Costs - 6,000 ADA
AI testing costs - 4,000 ADA
Elder Millenial (labor) - 36,000 ADA
Mark (testing labor) - 4,000 ADA
Milestone 2 (100,000 ADA):
Server Costs - 9,000 ADA
Elder Millenial (labor) - 44,000 ADA
Mark (labor) - 47,000 ADA
Milestone 3 (50,000 ADA):
Server Costs - 6,000 ADA
Elder Millenial (labor) - 8,000 ADA
Mark (labor) - 36,000 ADA
Milestone 4 (50,000 ADA):
Server Costs - 6,000 ADA
Elder Millenial (labor) - 38,000
Mark (testing labor) - 6,000
How does the cost of the project represent value for the Cardano ecosystem?
SteelSwap has been an innovator in transaction building in the Cardano ecosystem, helping to bridge liquidity across DEXs at the lowest prices. The value that this proposal brings will be through broader accesibility, which will lead to more efficiency across fragmented liquidity as well as increased transaction volume through AI integrations. Further, SteelSwaps commitment to be a community resource will be further extended in the creation of the batcher health dashboard.
Terms and Conditions:
Yes
The team consists of two members.
Twitter - ElderM
Discord - theeldermillenial
Telegram - theeldermillenial
Founder of SteelSwap
Elder Millenial will perform infrastructure and data pipeline upgrades, as well as writing the article and implementation of Flash Swaps. He will be responsible for building the public API, and will seek input from Mark on easy to use data structures for easy to use access.
Twitter - mezuny
Discord - mezuny
Mark is the frontend developer for SteelSwap, and contributes to a variety of projects throughout the ecosystem including Eternl and Iagon. He will be responsible for performing all UI development tasks, widget creation, and work with Elder Millenial on API datastructures.