CSWAP x Bitcoin: $BTC Staking Platform for Cardano & Sundial

[Proposal setup] Proposal title

Please provide your proposal title

CSWAP x Bitcoin: $BTC Staking Platform for Cardano & Sundial

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

400000

[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?

Bitcoin holders have no easy, trust-minimized way to stake BTC and earn CNT rewards on Cardano, limiting early momentum for Cardano’s Bitcoin DeFi narrative.

[Proposal Summary] Supporting Documentation

Supporting links

• https://sundialprotocol.com
,
• https://cswap.digital
,
• https://www.sundialprotocol.com/news/cswap-partnership
,
• https://cswap.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

Please provide details on the intellectual property (IP) status of your project outputs, including whether they will be released as open source or retained under another licence.

All code will be released under the Apache 2.0 open-source license. The project outputs, including smart contracts, frontend code, and documentation, will be publicly available for community use and extension.

[Theme Selection] Theme

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

Interoperability

[Campaign Category] Category Questions

Describe your established collaborations.

We are integrating directly with the Bitcoin network, the largest and most widely adopted blockchain in the world. This constitutes a true Tier-1 integration for Cardano and directly supports the ecosystem’s strategic priority of building out the emerging “Bitcoin DeFi” narrative.

In addition, we have an established partnership with Sundial Protocol, one of the most active and widely recognized teams working on trust-minimized Bitcoin-to-Cardano interoperability. Sundial is not required to deliver engineering work for this proposal, but their collaboration, alignment, technical insight, and ecosystem presence are key to ensuring compatibility with the broader multi-bridge landscape being built for Cardano.

Sundial provides:

• alignment with Bitcoin-to-Cardano interoperability standards

• protocol-level insight from their ongoing BTC bridge development

• ecosystem visibility and communication support

• user reach and distribution once the platform is live

CSWAP provides all engineering for the staking platform itself, including the Bitcoin event ingestion pipeline, backend infrastructure, Cardano smart contracts, reward logic, wallet integrations, and the multi-platform user interface.

We are also in active communication with BitcoinOS and the IOG Bitcoin DeFi team to ensure alignment with Cardano’s wider interoperability roadmap and to support compatibility with future Bitcoin-to-Cardano bridging pipelines.

Describe funding commitments.

CSWAP is contributing internal resources to project planning, architectural design, and integration coordination. We have self-funded early testnet feasibility work to validate assumptions, confirm integration points, and ensure the proposed solution is technically achievable. No production implementation or deliverables have been completed.

Sundial Protocol is collaborating with us at the technical alignment level to ensure future compatibility with their trust-minimized Bitcoin-to-Cardano interoperability layer. Their coordination and protocol insights support the design phase but do not represent major development commitments.

All core engineering, frontend implementation, Bitcoin Native integration logic, production deployment, infrastructure provisioning, security preparation, and audit readiness will be initiated and completed by CSWAP.

Describe your key performance metrics.

Our key performance metrics focus on measurable adoption, security, platform reliability, and contribution to the Bitcoin DeFi narrative on Cardano:

• BTC Staked: Amount of Bitcoin locked through the platform during Phase 1.

• Unique BTC Stakers: Number of individual users participating in non-custodial staking.

• CNT Distributed: Total CNT rewards successfully issued on Cardano.

• Successful Bridge Interactions: Number of validated BTC lock/unlock events handled without error.

• Platform Reliability: Uptime, successful transactions, no critical severity bugs.

• Completion of Independent Audit Preparation: All staking logic documented and verified for handoff to external auditors.

These metrics ensure the system is usable, secure, and provides real value to BTC users and the Cardano ecosystem.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

We will build a user-friendly, trust-minimized Bitcoin staking platform that allows Bitcoin holders to lock BTC non-custodially and earn CNT rewards on Cardano. This platform serves as the first practical on-ramp into Cardano’s emerging Bitcoin DeFi narrative.

The platform will be accessible from both the CSWAP and Sundial web platforms and can be easily reskinned for other ecosystem partners such as BitcoinOS, IOG, the Cardano Foundation, or Midnight (CSWAP is an official partner). Users maintain full control of their Bitcoin while participating in Cardano-based incentives for the first time.

CSWAP provides the Bitcoin non-custodial staking logic, Cardano infrastructure, smart contracts, reward distribution system, wallet integrations, security model, and multi-platform user interface required to make this process simple and accessible. The staking flow is designed to feel native to Bitcoin users, requiring minimal blockchain expertise and no interaction with DeFi protocols in Phase 1.

This solution directly addresses the core problem: Cardano currently has no easy, safe, or trust-minimized way for BTC holders to participate in the ecosystem or earn Cardano-native rewards. By providing a unified entry point for Bitcoin users, we accelerate adoption of upcoming BTC bridges, validate user demand, and create the first concrete utility within Cardano’s Bitcoin DeFi strategy.

Phase 1 focuses on delivering the staking platform, non-custodial BTC locking mechanism, CNT reward distribution, and a production-ready user interface. This establishes the foundation for future phases, including RWA yield, multichain participation, advanced incentives, and deeper integrations with Cardano’s broader DeFi ecosystem.

[Your Project and Solution] Impact

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

This project delivers the first practical mechanism for Bitcoin holders to participate in Cardano, creating a clear and accessible on-ramp for the ecosystem’s Bitcoin DeFi narrative. Today, BTC users have no trust-minimized way to engage with Cardano incentives or test emerging Bitcoin-to-Cardano bridges. By enabling non-custodial BTC staking and CNT rewards, this platform unlocks a new category of users and strengthens Cardano’s competitiveness in a multichain environment.

The impact extends beyond the staking platform itself. A successful Phase 1 establishes Cardano as a viable destination for Bitcoin capital, validating demand and driving adoption of the new bridging pipelines being built by Sundial, BitcoinOS, IOG, and others. It also provides the first live utility for Bitcoin DeFi on Cardano, helping define the narrative with a real product rather than speculation.

For builders, this project creates a reusable integration layer that other dApps, wallets, and infrastructure teams can adopt or reskin. For users, it provides a safe, simple experience that expands Cardano’s reach to the largest crypto asset in the world without requiring familiarity with DeFi or AMM concepts. For the ecosystem, it expands TVL potential, increases cross-chain visibility, and supports long-term decentralization by attracting new contributors and liquidity pathways.

This foundational work creates the necessary foundation for future phases such as RWA yield, native Bitcoin-backed assets, multichain borrowing and lending, and advanced incentive mechanisms. This proposal establishes the core infrastructure that the broader Bitcoin DeFi roadmap will rely on. By solving the first and most important step, bringing Bitcoin users in through a trust-minimized flow, Cardano becomes better positioned for meaningful growth in the coming years.

[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?

Our team has already demonstrated the technical feasibility of this project through self-funded testnet validation. We verified the end-to-end flow of the Bitcoin staking model, including BTC lock detection, ZeroMQ event handling, Cardano-side datum construction, UTXO creation, and CNT reward logic. These proofs of concept confirmed that the proposed architecture is viable, secure, and aligned with the requirements of Cardano’s emerging Bitcoin DeFi infrastructure. No deliverables being requested from Catalyst have been implemented; all testing to date has been exploratory and funded entirely by CSWAP.

CSWAP brings extensive infrastructure, full-stack, and protocol-level experience, including delivery of a production AMM on Cardano, multi-chain integrations, custom indexing infrastructure, AWS-based backend systems, and full frontend/UI development. Our engineering team has a proven record of shipping mission-critical blockchain software with a high level of security, operational reliability, and accountability.

We will validate feasibility and quality throughout the project using:

• Incremental testnet deployments for the BTC locking flow and CNT reward distribution

• Independent architecture reviews with BitcoinOS, Sundial, and IOG’s Bitcoin DeFi team

• Formal code reviews and automated testing across bridge logic, indexers, and smart contracts

• Security-focused QA, including replay tests, double-spend detection, and edge-case handling

• Audit preparation to ensure the system is ready for external review before going to mainnet

These measures ensure that the delivered platform is secure, fully validated, and production-ready. Our demonstrated testnet feasibility, combined with our established track record of delivering complex, audited Cardano infrastructure, gives us a high capability to deliver this project responsibly and transparently.

[Milestones] Project Milestones

Milestone Title

Final Architecture, Specifications & Security Model

Milestone Outputs

• Final written architecture describing BTC→Cardano staking flow
• Data schemas for BTC events, Cardano datums, CNT reward logic
• Simple architecture diagram showing component interactions
• Minimal security considerations and assumptions for Phase 1et experiments)

Acceptance Criteria

This milestone is accepted when the written specification fully explains all components of the staking system, including the indexer pipeline, backend logic, contract requirements, and reward process. The document must clearly define how BTC lock events flow into Cardano and must be detailed enough for implementation to begin without major redesign.

Evidence of Completion

A PDF/Markdown architecture document plus diagram published via link or repository with commit history showing finalization.

Delivery Month

1

Cost

50000

Progress

10 %

Milestone Title

Bitcoin Indexer & Backend MVP

Milestone Outputs

• Functional BTC indexer detecting BTC testnet lock events via ZeroMQ
• Event storage layer saving parsed events to off-chain tables
• Basic backend API returning stored staking events
• Logs demonstrating normal event detection and parsing flow

Acceptance Criteria

This milestone is accepted when the indexer can detect a real BTC testnet transaction and store the event in the backend. The API must return the stored event. Basic confirmation handling must work. The system must reliably process normal testnet cases without requiring advanced features or optimizations at this stage.

Evidence of Completion

A BTC testnet txid detected by the indexer, backend log screenshots, and a sample API response showing the stored event.

Delivery Month

2

Cost

90000

Progress

20 %

Milestone Title

Cardano Smart Contracts & CNT Reward Logic

Milestone Outputs

• Testnet Cardano staking contract creating UTXOs with correct datums
• CNT reward distribution logic implemented off-chain
• Script that generates reward UTXOs using stored BTC events
• Basic integration tests validating the contract + backend connection

Acceptance Criteria

Accepted when a BTC testnet lock event results in the creation of a Cardano testnet staking UTXO with the expected datum and a CNT reward UTXO is generated. Contract source must deploy successfully. Testnet explorer links must confirm that both the staking UTXO and reward UTXO behave as intended.

Evidence of Completion

Testnet Cardano txids, published contract code, and simple test logs showing the reward logic functioning.

Delivery Month

3

Cost

90000

Progress

20 %

Milestone Title

User Interface (CSWAP + Reskinnable Variant)

Milestone Outputs

• CSWAP UI for BTC staking (wallet connect, start lock, view reward state)
• Reskinnable UI variant designed for easy partner branding
• Frontend integration with backend APIs and Cardano/BTC wallets
• Basic dashboard showing status and history of staking actions

Acceptance Criteria

Accepted when users can open the testnet interface, connect wallets, initiate a BTC lock, and view staking/reward status. The UI must correctly pull backend data and behave consistently in both CSWAP and reskinned versions. Minimal styling and functionality are sufficient as long as the flow works.

Evidence of Completion

Public testnet URL with functional UI, plus screenshots of both the main UI and the reskinned version.

Delivery Month

4

Cost

70000

Progress

20 %

Milestone Title

Public Testnet Launch & Security Review

Milestone Outputs

• Full public testnet deployment of indexer, backend, contracts, and UI
• Minimal internal security review (1–2 pages) covering basic risks
• Monitoring/logging enabled for event flow and failures
• Verified end-to-end BTC→CNT flow on testnet

Acceptance Criteria

Accepted when the full system operates end-to-end on public testnet with BTC locks producing Cardano staking UTXOs and CNT rewards. The short security review must identify key risks, and the monitoring setup must show that events are being processed reliably.

Evidence of Completion

Public testnet link, example BTC→Cardano demo txids, and a short PDF/Markdown security review document.

Delivery Month

5

Cost

50000

Progress

10 %

Milestone Title

Mainnet Launch + Catalyst Close-Out Requirements

Milestone Outputs

• Full staking platform deployed to Cardano mainnet
• Minimal operational documentation w/ help and FAQs (1–2 pages)
• Catalyst-required final report
• Catalyst-required close-out video (only mandatory video)

Acceptance Criteria

Accepted when the system detects a real BTC mainnet lock event and generates the correct Cardano staking UTXO and CNT reward on mainnet. The platform must run in production with a live URL. The final report and the Catalyst-mandated close-out video must be delivered to complete this milestone.

Evidence of Completion

Mainnet txids demonstrating end-to-end operation, the final written report, the required close-out video, and the live mainnet platform link.

Delivery Month

6

Cost

50000

Progress

20 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

The total project cost is 400,000 ADA, allocated across six milestones that represent the complete delivery of the Bitcoin non-custodial staking platform from architecture through mainnet deployment. Costs include engineering time (backend, indexer, frontend, Plutus/Aiken contracts), infrastructure, testing, security review, operational preparation, and Catalyst-required reporting.

Milestone 1 — Architecture & Specification

50,000 ADA (10%)

Covers strategy, system design, technical specification, data schemas, security assumptions, architecture diagrams, and planning required to begin structured implementation.

Milestone 2 — Bitcoin Indexer & Backend MVP

90,000 ADA (20%)

Covers backend engineering, ZeroMQ indexer development, database setup, API creation, and initial testnet infrastructure. Represents substantial engineering effort.

Milestone 3 — Smart Contracts & CNT Reward Logic

90,000 ADA (20%)

Funds Aiken/Plutus contract development, off-chain reward logic, integration with BTC event pipeline, testing, and deployment on testnet.

Milestone 4 — User Interface (CSWAP + Reskinnable)

70,000 ADA (20%)

Covers frontend development, wallet integrations, UI/UX work, dashboard creation, and delivery of a reskinnable version for ecosystem partners.

Milestone 5 — Public Testnet Deployment & Security Review

50,000 ADA (10%)

Covers operational testnet deployment, logging/monitoring setup, minimal security review, documentation, and system stabilization.

Milestone 6 — Mainnet Launch & Catalyst Close-Out Requirements

50,000 ADA (20%)

Covers mainnet deployment, final operational documentation, production infrastructure setup, and the Catalyst-required close-out report and video.

[Final Pitch] Value for Money

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

The cost of 400,000 ADA represents strong value for the Cardano ecosystem because it delivers a complete, production-ready Bitcoin staking platform; something Cardano does not have today but urgently needs to support the emerging Bitcoin DeFi narrative. This project enables Bitcoin holders to earn CNT rewards on Cardano through a trust-minimized, non-custodial flow. Bringing Bitcoin users into Cardano creates significant long-term value, expanding the ecosystem’s reach to the largest crypto asset in the world.

The budget directly funds core infrastructure: the BTC indexer, backend pipeline, Aiken/Plutus contracts, frontend UI, public testnet deployment, security review, and mainnet launch. These components are foundational, reusable, and extendable by other teams. The outcome is not a speculative dApp—it is cross-chain infrastructure that other Cardano projects can adopt or reskin at minimal cost.

By accelerating real BTC participation on Cardano, this project helps validate the new bridging pipelines, strengthens Cardano’s multichain positioning, and provides the first concrete utility in the Bitcoin DeFi narrative. The deliverables will remain open, reusable, and benefit the entire ecosystem long beyond this funding cycle. Given the scope, technical complexity, and ecosystem impact, the cost is justified and delivers high strategic value to Cardano.

[Self-Assessment] Self-Assessment Checklist

I confirm that the lead applicant is a verified legal business entity.

Yes

I confirm that the lead org has a ≥2-year track record, and the consortium collectively has ≥$5M in verifiable annual revenue.

Yes

I confirm that evidence of collaboration with a qualified Tier-1 enterprise is provided.

Yes

I confirm that the proposer and all team members are in good standing with prior Catalyst projects.

Yes

I confirm that the proposal is for mature R&D or integration, not an early-stage concept or core infrastructure.

Yes

I confirm that evidence of a mature product is provided, with a clear integration plan if not already on Cardano.

Yes

I confirm that all key partners, including the Tier-1 collaborator, are clearly identified.

Yes

I confirm that a clear statement of the partner's in-kind or financial contributions is included.

Yes

I confirm that the proposal provides verifiable references (e.g., LinkedIn, portfolio) for key team members.

Yes

I confirm that the proposal includes clear KPIs for adoption (e.g., transaction volume, user growth). Forecast for projected on-chain transaction volume is provided with adequate justification.

Yes

I confirm that delivery is ≤ 12 months with clear milestones.

Yes

I confirm that the proposal includes a co-marketing or community engagement plan to amplify Cardano's visibility.

Yes

I confirm that the proposal budget is for future work only, not for completed tasks. No incentives, giveaways, private treasuries and regranting are included in the budget.

Yes

[Required Acknowledgements] Consent & Confirmation

I Agree

Yes