Merkle Science Safeguarding Mainstream Adoption

[Proposal setup] Proposal title

Please provide your proposal title

Merkle Science Safeguarding Mainstream Adoption

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

727500

[Proposal Summary] Time

Please specify how many months you expect your project to last

8

[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 is at a critical inflection point where regulatory exposure to Iranian exchanges such as Nobitex, as well as compliance gaps pose immediate risks to its ecosystem and long-term adoption.

[Proposal Summary] Supporting Documentation

Supporting links

• https://docs.google.com/document/d/1RVFVOBeJbC7pIyqMkpy4eL0WcdzGLe1itoVmFc2tQRs/edit?usp=sharing

[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

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.

Due to the sensitivity of the attribution information and the exposure to hostile actors, our data and its infrastructure cannot be open sourced. Public release could undermine Cardano’s safety, reduce detection accuracy, and weaken compliance controls.However, we will open source an API to submit attributions, provide integration examples, and developer tooling to ensure broad ecosystem accessibility.

[Theme Selection] Theme

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

Analytics

[Campaign Category] Category Questions

Describe your established collaborations.

Merkle Science has a strong track record of delivering compliance and security infrastructure across multiple Layer-1 ecosystems, including Sui, Hedera, ICP, Stellar, Celestia, and Aleo, at pivotal stages of their growth. These integrations have been publicly referenced through ecosystem announcements, documentation updates, and partner materials shared by Sui, Hedera, Stellar, ICP, Celestia, and Aleo.

Merkle Science already powers the compliance infrastructure for Aleo, Sui, Hedera, Stellar, Polkadot, and ICP, and multiple other L1 ecosystems.

Trusted by Tier 1 Protocols

These deployments have produced verifiable, ecosystem-wide outcomes such as:

• SUI
  • $918M in stablecoin transaction volume enabled
  • $1.7B in TVL driven by compliant DeFi growth
  • 1.4M active users supported by fraud mitigation
  • https://www.merklescience.com/blog/merkle-science-and-sui-partner-to-elevate-blockchain-security-compliance
• Polkadot
  • A similar initiative with Polkadot enabled the blacklisting from less than 200 addresses to over 14,000 in one year.
  • Merkle Science currently powers tier-1 block explorers (e.g., Suiscan, Subscan), increasing traffic by up to 50% YoY after integration.
  • https://polkadot.polkassembly.io/referenda/1586
• Hedera
  • Attracted major stablecoin issuers by providing complimentary compliance tools to remove regulatory barriers
  • Based on the collaboration between Merkle Science and Hedera, XSGD has chosen to build on Hedera with great success. Since the start of the partnership in 2023, XSGD has surpassed over 8 billion in on-chain transactions as of May 2025, solidifying its position as one of the largest non-USD stablecoins by market capitalization (straitsx.com).
  • https://www.straitsx.com/blog-post/xsgd-expands-multichain-ecosystem-with-support-on-hedera?utm_source=chatgpt.com
  • The same methodology, tooling, and operational processes used to scale these ecosystems will now be applied to Cardano, reducing execution risk and ensuring predictable delivery.

Trusted by Leading Financial Institutions

Merkle Science is trusted by top global financial institutions and high-volume exchanges, including: Crypto.com, Laser Digital, Hudson River Trading, Finoa, and Consensys.

These organizations rely on our attribution dataset and intelligence platform for:

• Regulatory compliance
• Fraud detection
• AML screening
• Sanctions risk management
• This institutional trust demonstrates our ability to deliver secure, accurate, and regulator-ready solutions at global scale.

Describe funding commitments.

• Labour costs: Support from an extensive team of on-chain analytics specialists (An Attribution Lead, an Attribution Analyst, a Data Scientist and a Threat Analyst)
  • Funding: $293,070 (ADA 651,500)
• Overhead Costs: Maintenance of real-time attribution and monitoring infrastructure.
  • Funding: $25,330 (ADA 56,000)
• Licensing Costs: Distribution of Forensic analysis software (Tracker) licenses to key ecosystem stakeholder
  • Funding: Complimentary but with a market value of $300,000 (704,000)
• We are requesting for an additional 20,000 ADA to accommodate for potential value fluctuations, bring the total funding requested to 727,500 ADA
• Assuming a converstion rate of 0.45 ADA/USD.

Describe your key performance metrics.

Technical Success Metrics

• Attribution for 4 categories (Services, Sanctions, High Risk Exchanges, Scams, and Darknet Markets) within 6 months
• More than 1 Million addresses labeled within 6 months
• Performance: P75 API response time < 1 second
• Uptime: 99% system availability
• Accuracy: > 95% attribution accuracy (validated against known entities)
• Token Coverage: 30+ non-native tokens supported
• Real-time Latency: < 5 seconds from block finality to data availability

Business Success Metrics

• Activate 15 complimentary licenses within 3 months
• Number of wallet and block explorer integrations
• Number of prevented scam transactions
• New number of partnerships/developers integrating the API
• Partnership announcements with exchanges, custodians, and TradFi firms to strengthen Cardano’s adoption via Merkle Science

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Problem Statement

As of 24 November 2025, over $5M in ADA is held by Iranian exchanges, including Nobitex, with more than 50 known sanctioned addresses active on Cardano. These addresses have collectively received over $47B in ADA.

The full list of sanctioned entities is verifiable through Merkle Science, but withheld here to avoid alerting illicit actors.

This level of sanctioned exposure creates severe regulatory and reputational risks:

Potential exchange delistings of ADA.Perception of Cardano as noncompliant, unsafe, or vulnerable, which can deter builders, institutions, and liquidity.

Cardano users face increasing risks of interacting with illicit actors, including sanctioned entities and scammers, due to insufficient attribution data and limited labeling in wallets and block explorers.

While Merkle Science supports Cardano Mainnet in its enterprise suite, the underlying attribution dataset requires further development to reach the maturity of competitor blockchains that have invested and funded Blockchain Analytical Providers to develop more curated attribution datasets. This has been raised by key stakeholders in the Cardano ecosystem and our customers.

Without improved attribution data, Cardano cannot meet the ever-growing expectations of Tier-1 enterprises, exchanges, and financial institutions who require robust compliance and risk intelligence, as further global regulatory frameworks are implemented around the world (such as FATF, MiCa, etc)

In summary, strengthening Cardano’s attribution dataset is essential to:

• Accelerate mainstream adoption by positioning Cardano as a fully compliant, enterprise-ready blockchain directly addressing the compliance solutions Priority Area of Fund 15.
• Mitigate regulatory and reputational risks
• Provide safer UX for users, wallets, and explorers
• Enable institutional-grade compliance

The Solution

Build the industry-leading attribution dataset for Cardano, enabling the ecosystem to detect sanctioned, high-risk, and illicit actors with the same depth and accuracy seen on top Tier-1 chains.

Merkle Science will apply its proven proprietary labeling methods, used on Sui, Stellar, Polkadot, Aleo, Celestia, ICP, Hedera and many more, to classify Cardano addresses across 4+ attribution categories, identifying 1M+ entities within the first six months.

This enhanced dataset directly addresses Cardano’s current compliance gap by providing the three critical capabilities outlined in a report by PwC’s commissioned by another top tier layer 1 protocol in 2025:

• Address risk scoring (Compass)
• On-chain transaction monitoring (Compass)
• Flow-of-funds analysis (Tracker)

By delivering these capabilities, we enable institutions to meet regulatory requirements, making Cardano a blockchain they can safely deploy assets on, just as they do with Stellar, Sui, and others L1s supported by Merkle Science.

The improved attribution dataset will materially reduce systemic risk from unlabelled sanctioned activity and prevent reputational damage that could lead to exchange delistings or institutional avoidance.

With this project, Cardano will become a more credible protocol for institutional capital, which in turn could drive the flow of new funds from Merkle Science customers such as Crypto.com, Laser Digital, Hudson River Trading, Finoa, and Consensys.

We will deploy 15 complimentary licenses across critical ecosystem partners to ensure immediate activation and ecosystem-wide impact.

The solution strengthens Cardano’s growth in two key ways:

1. Institutional & Regulatory Readiness

Reduces regulatory and reputational risk for exchanges, custodians, and on/off-ramps.

Expands Cardano’s viability for regulated service providers with lower risk tolerance, ensuring Cardano can compete with chains like Stellar.

Allow greater adoption from stablecoin providers who typically complete more stringent due diligence before deploying their stablecoin on the blockchain natively.

1. User Safety & Transparency

Block explorers and wallets gain clear labeling via API of exchanges and DeFi activities, improving UX for users and providing enhanced toolkits to developers.

Identifying scams, sanctioned entities, and child-abuse material addresses makes the ecosystem safer for everyday and enterprise users.

Scoped ecosystem-wide Integrations include:

• Cardanoscan: richer address attribution and improved UX.
• Xerberus: enhanced scam intelligence and fraud reporting.
• Wallets (Yoroi, Eternl, Lace, Gero, Vespr, Tokeo, Begin) gain transaction prescreening to prevent users from sending funds to scams.
• IOHK gains the ability to screen Fund 15 recipients for sanctions risk.

[Your Project and Solution] Impact

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

Protect Cardano’s reputation and exchange listings

A Tier-1 attribution dataset enables early identification of sanctioned and illicit actors, dramatically reducing the risk of:

Exchange delistings

Blacklisting by financial institutions

Reputational damage from unmonitored illicit activity

This safeguards current liquidity and unlocks opportunities for RWA, tokenization, payments, and DeFi adoption.

Enable Institutional Onboarding

With address risk scoring, transaction monitoring, and flow-of-funds intelligence in place, Cardano satisfies the compliance requirements financial institutions need to deploy assets on-chain.

Attract high-quality developers and increases active users

Developers choose ecosystems with safe UX, clear data, and low fraud risk.

A robust attribution layer makes Cardano more attractive relative to competing chains such as Stellar, Sui, or Hedera, each of which saw significant ecosystem growth after adopting similar compliance infrastructure.

Scam Protection

Merkle Science’s monitoring and tracing will help prevent repeat incidents like the Cardano Foundation X-account hack, where a fake “ADAsol” token generated $500K in fraudulent trading volume.

Similar initiatives on Polkadot increased blacklisted scam addresses from under 200 to over 14,000 in one year, deliverables we will replicate for Cardano.

Measurement (KPIs)

We will track both technical success metrics and business adoption metrics, ensuring full accountability.

Technical Success Metrics

• Attribution coverage for 4 (Services, Sanctions, High Risk Exchanges, Scams, Darknet Markets) within 6 months
• 1M+ addresses labeled within 6 months
• Deliver evidence-backed, controlled growth across all four categories (3-7% Month-over-months)
• P75 API response time < 1 second
• 99.9% uptime
• 95% attribution accuracy, validated against known entities
• 30+ non-native tokens supported
• Below 5 seconds latency from block finality to data availability

Ecosystem Metrics

• 15 complimentary licenses activated within 3 months
• Number of wallet and explorer integrations (Yoroi, Eternl, Lace, Gero, Vespr, Tokeo, Begin, Cardanoscan, Xerberus, etc.)
• Number of prevented scam transactions measured through API prescreening
• Number of new developers, dApps, and partners integrating the API
• Public partnership announcements with exchanges, custodians, and TradFi firms demonstrating institutional adoption

**Co-Marketing, Public relations and Community Engagement **

Merkle Science will ensure maximum transparency and visibility across the ecosystem by:

• Public updates via X (Twitter), LinkedIn, GitHub (API documentation), technical blogs, and monthly progress reports on the individual milestones.
• For instance, Merkle Meets with Cardano: https://www.youtube.com/watch?v=dcRCN2BNMVY&t=2898s
• Promotion of Cardano’s new attribution dataset at Conferences (ETH Denver, ACI, DAS, Consensus, Mainnet, Permissionless)
• Newsletter update to institutional and exchange customer base
• Announcements highlighting every new integration, license activation, and institutional onboarding milestone.
• Case studies showing how attribution improves safety, reduces scams, and increases transaction volume, similar to results seen on Sui, Stellar, ICP, and Hedera.

[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?

Merkle Science is well positioned to deliver this project with the highest levels of trust, accuracy, and accountability. Since 2018, we have built the leading compliance and attribution infrastructure used across the crypto industry, supporting global financial institutions, major exchanges, and multiple Tier-1 blockchains.

Proven Delivery Across Major Ecosystems

• Tier-1 Technical Capability and Research Depth
• Merkle Science has built a Tier-1 Attribution Dataset of over 1 billion addresses across 27 blockchains, spanning:
• UTXO-based chains
• Account-based chains
• Architecturally unique L1s and L2s
• Multiple programming languages and execution models

Our methodology has been battle-tested in production environments with:

• High throughput chains
• High-risk attack surfaces
• Diverse contract execution patterns
• Our UTXO experience is particularly extensive, making Cardano mapping highly reliable from day one.

Mature Clustering & Attribution Algorithms

Our clustering algorithms, used to map service infrastructure and entity networks, have been refined over seven years of production use.

These algorithms are trusted by:

• Exchanges
• Custodians
• Protocol foundations
• Web3 infrastructure providers

This long-standing adoption underscores the accuracy, reproducibility, and scientific rigor of our techniques.

High Accountability Through Transparent Evidence

Merkle Science produces attribution reports that clearly document:

• The research methodology
• The evidence leading to attribution decisions
• How individual addresses are linked to clusters
• The ground truth sources validating conclusions

This level of transparency ensures verifiability, auditability, and community trust.

Public Reporting

Across all prior ecosystem partnerships, Merkle Science has provided:

• Regular milestone updates
• Public reporting of progress
• Clear communication of timelines and deliverables
• For example visit Open Forum (https://forum.polkadot.network/t/polkadot-merkle-science-proposal-1586-milestone-progress-updates/13679))

[Milestones] Project Milestones

Milestone Title

Attribution Research: Service Providers (60 Days)

Milestone Outputs

Addresses and transactions will be enriched using advanced proprietary clustering heuristics.

Heuristics will assign attribution data to addresses, beneficiaries, and originators of transactions.

Risk scoring will be based on chain history and the connection of off-chain information to on-chain activity.

Attribution will cover 94+ actor sub-types, including:

• Mixers
• Blacklisted address repositories (e.g., OFAC, Tether USDT blacklist)
• Full actor list available via Merkle Science: https://docs.merklescience.com/docs/entities-category.

Milestone Outputs

Expansion of attribution coverage for all Cardano-supporting service providers, including:

• Global exchanges

• Regional exchanges

• Regulated and licensed platforms

• Merchant processors

• Payment gateways accepting ADA or ADA-denominated assets

• Identification, validation, and tagging of Cardano deposit and settlement infrastructure across:

• Tier-1 CEXs

• Regional fiat on/off-ramps

• PSPs

• Brokerages

• Licensed entities regulated as VASPs, MSBs, EMIs, etc.

Mapping of ADA flows in the eUTXO model, including:

• Exchange-level behavioral patterns
• Payment gateway patterns (merchant receipts, settlement batching, repeated stake-key anchoring)

Delivery outputs include:

• Monthly attribution drops
• Jurisdictional expansions
• Refinement of regulated-service typologies

All work targets a 5 - 7 % month-over-month uplift in regulated and unregulated service attribution

Acceptance Criteria

Demonstrated 5 - 7% MoM uplift in Cardano-linked attribution for exchanges, regulated entities, merchant processors, and payment gateways.

Accurate mapping of ADA deposit and settlement flows across:

Global CEXs

• Regional platforms
• Licensed VASPs/MSBs/EMIs
• Payment gateways

Identification of regulated-service clusters using Cardano-specific eUTXO heuristics such as:

• Stake-key reuse
• Repeated script-controlled address patterns
• Regulated-entity settlement patterns

Completed coverage across major categories, including:

• Tier-1 global exchanges
• Regional exchanges (APAC, EMEA, LATAM, SSA)
• Licensed VASPs
• PSPs
• EMIs
• Cardano-enabled payment gateways

All new attributions must meet internal standards for:

• Evidence
• Confidence
• Typology assignment
• Jurisdiction mapping

Monthly reporting including:

• Coverage expansion
• Accuracy findings
• Next-stage targets

Evidence of Completion

• Monthly entity-diff sheets listing new global exchanges, regional platforms, licensed VASPs/MSBs/EMIs, and payment gateways mapped to Cardano.
• Updated tagging logs showing incremental growth across ADA-supported regulated and unregulated services.

QA reports confirming:

• Attribution accuracy
• Confidence alignment
• Correct regulatory classification
• Monthly delivery notes summarizing expansions and forward-looking regional sprint planning.

Delivery Month

2

Cost

56200

Progress

20 %

Milestone Title

Milestone 2 Attribution Research: Sanctions & High-Risk Organizations (30 Days)

Milestone Outputs

This milestone expands attribution for sanctions-designated entities and high-risk organizations, including terrorist groups, criminal networks, high-risk jurisdictions, high-risk exchanges, frozen-asset entities, and Ukraine-related targets. Work links Cardano activity to these organizations using documented evidence and strict confidence thresholds.

Heuristics will be developed for eUTXO patterns commonly appearing in high-risk exchange flows, e.g., staged sweeps, stake-key reuse, repeated deposit patterns, tuned specifically to Cardano’s deterministic execution model. Target uplift: 5 - 7 % MoM.

• Expands Cardano-linked attribution for sanctions-designated entities and high-risk organizations.
• Focus on identifying, validating, and tagging Cardano addresses tied to: terrorist organizations, criminal organizations, high-risk jurisdictions, high-risk exchanges, frozen-asset designations, and Ukraine-related entities aligned with global enforcement priorities.Attribution links these organizations to Cardano activity using documented evidence and confidence thresholds.
• Heuristic development focuses on eUTXO transaction patterns common in high-risk or jurisdiction-obscured exchange flows, especially those linked to Iranian or similar operators.
• Behavioral analysis includes staged sweeps across script-controlled addresses, repeated clustering via stake-key reuse, and deposit-reuse patterns.
• Heuristics tuned to Cardano’s deterministic execution model, native staking architecture, and eUTXO constraints, prioritizing precision over expansion.

Acceptance Criteria

• 5 - 7 % MoM uplift in sanctions/high-risk attribution.
• Delivery of at least one validated high-risk heuristic.
• All attributions and heuristics meet typology, evidence, and confidence standards.
• Full QA before merging any updates.
• Monthly reports on expansions and upcoming focus areas.

Evidence of Completion

• Monthly entity-diff sheets across all seven high-risk categories.
• Updated tagging logs with incremental additions.
• Heuristic specification documents (logic, thresholds, QA).
• Monthly delivery summaries.

Delivery Month

4

Cost

85000

Progress

50 %

Milestone Title

Milestone 3 API Development (30 Days)

Milestone Outputs

This milestone enables integration of the new datasets into Tier 1 Products to support:

• Address risk scoring
• Real-time transaction monitoring
• Flow-of-funds analysis for ADA and non-native tokens

Indexed and enriched Cardano blockchain data will be made available within 30 days.

Merkle Science will provide complimentary licenses and services worth $300,00 in the first year, including:

• 15× Enterprise Compass Licenses
• 3 users per license
• 30,000 API calls
• 1 additional workspace
• 5× Tracker Licenses
• Customer Success Manager (CSM) support

Milestone Outputs

• Full integration of Cardano datasets into Compass (risk scoring & monitoring) and Tracker (flow-of-funds).
• Deployment of Cardano API endpoints for risk, monitoring, and analytics.
• Real-time and historical ADA + non-native token data availability.
• Deployment of an attribution API for the community to submit attribution request
• Deploy an open source landing page for scams to be submitted

Acceptance Criteria

• Performance: P75 API response time < 1 second
• Uptime: 99% system availability
• Accuracy: > 95% attribution accuracy validated against known entities
• Token Coverage: Support for 30+ non-native tokens
• Real-Time Latency: < 15 seconds from block finality to data availability

Evidence of Completion

• Cardano API included in official API documentation
• API test results demonstrating successful queries for sanctioned and exchange addresses
• Cardano address risk scoring and real-time transaction monitoring visible in Compass
• Cardano flow-of-funds analysis available in Tracker

Delivery Month

5

Cost

200000

Milestone Title

Milestone 4 Attribution Research: Scams (30 Days)

Milestone Outputs

• Expands Cardano-linked attribution for scam ecosystems including pig-butchering operations, investment fraud schemes, romance scams, drainer-style wallet networks, advance-fee fraud, and cross-chain scam funnels that settle on or interact with Cardano.
• Identification and validation of Cardano addresses tied to scam operators, settlement wallets, scam facilitators, scripted splitting behavior, and receiving infrastructure that supports fraud at scale.
• Includes a taxonomy upgrade to ensure scam categories are mutually exclusive, reflect current fraud patterns, and support precise end-user filtering.
• Continuous OSINT monitoring for newly emerging scam behaviors, wallet signatures, or operational shifts, incorporating verified findings into the attribution model.
• All work targets a controlled 5 - 7 % MoM uplift in scam attribution while maintaining strict precision standards.

Acceptance Criteria

• Demonstrated uplift in Cardano-linked scam entities aligned with the 5 - 7 % MoM target.
• Updated taxonomy reflecting current scam categories, improved subtype clarity, and clearer differentiation across pig-butchering, drainer, investment, romance, and advance-fee schemes.
• Accurate mapping of scam settlement flows using eUTXO-specific indicators such as stake-key reuse, structured splitting, scripted handoff patterns, and predictable UTXO churn.
• Verified integration of new OSINT-derived behaviors or signatures where supported by evidence.
• All new scam attributions and taxonomy updates meet internal standards for evidence, confidence, and typology assignment.
• Monthly reporting outlining new scam entities, behavioral shifts, and updates from open-source monitoring.

Evidence of Completion

• Monthly entity-diff sheets showing new Cardano-linked scam clusters.
• Updated tagging logs reflecting incremental growth in scam-related addresses.
• Taxonomy revision documentation with rationale for each change.
• Updated Confluence documentation covering scam typologies, Cardano-specific behavior patterns, OSINT-driven updates, and heuristic notes.
• Monthly delivery notes summarizing progress and forward-looking focus area

Delivery Month

6

Cost

100000

Progress

70 %

Milestone Title

Milestone 5 Attribution Research: Darknet Markets (30 Days

Milestone Outputs

• Expands attribution for darknet markets and adjacent illicit services interacting with Cardano.
• Identifies marketplace vendors, escrow wallets, illicit processors, laundering intermediaries, and automated shopfront infrastructure.
• Maps darknet-related flows in the eUTXO model, identifying small but recurring payment behaviors.
• Validates darknet signatures while filtering out unverified OSINT noise.
• Ensures applicability of existing heuristics and documents any darknet-specific patterns that require integration.
• Targets a 3–7% month-over-month uplift due to low and inconsistent darknet ADA usage.

Acceptance Criteria

• Demonstrated 3–7% MoM uplift in darknet attribution.
• Accurate mapping of darknet behaviors using existing heuristics where applicable.
• Clear documentation of darknet-specific behavioral patterns where prior heuristics do not apply.
• Classification of darknet-linked entities into vendor wallets, automated shop services, escrow intermediaries, laundering nodes, and illicit payment processors.
• All darknet attributions meet strict internal standards for evidence, confidence, and typology classification without reliance on unverified OSINT fragments.
• Monthly reporting on newly attributed entities, observed patterns, and heuristic applicability.

Evidence of Completion

• Monthly entity-diff sheets showing incremental darknet-linked expansions.
• Updated tagging logs reflecting attributed darknet UTXOs and rationale.
• Documentation assessing heuristic applicability and recording newly observed darknet signatures.
• Monthly delivery notes summarizing progress and next investigative targets.

Delivery Month

7

Cost

74000

Progress

80 %

Milestone Title

Milestone 6 Custom API & Close out Video (60 Days)

Milestone Outputs

This Milestone will develop a custom API endpoint over 60 days.

• API enables wallets and block explorers (e.g., CardanoScan) to leverage attribution data to:
• Increase transparency of the public blockchain and help users understand interactions.
• Enable counterparty pre-withdrawal screening to prevent transactions involving malicious actors such as scams.
• The Custom API differs from the API in Milestone 3 by enabling bulk data retrieval, which is more effective for block explorers than rate-limited, real-time APIs.
• Bulk delivery supports ecosystem-wide transparency because most address labels (e.g., exchange deposit addresses) do not frequently change.
• Community members expressing interest include CardanoScan.

Milestone Outputs (Custom API)

• Custom bulk API endpoint supporting high-throughput address attribution delivery.
• Delivery of >500,000 labeled addresses for explorer integration.
• Compiled binaries and full technical documentation.

Milestone Outputs (Video)

• This milestone delivers the final project report and video summarizing the work, outputs, and ecosystem impact.
• in addition, this milestone delivers the final project report and video summarizing the work, outputs, and ecosystem impact.

Acceptance Criteria

Acceptance Criteria (Custom API)

• Delivery of more than 500,000 labeled addresses.
• Performance: p75 latency < 100ms under normal load.
• Scalability: API supports ~20 requests per second without degradation.
• Security: AES-256 encryption for data at rest and encrypted transport for data in transit.
• Code delivered as compiled binaries with documentation.
• Uptime: ≥ 99%.
• Enforced API authentication (API key).
• API documentation includes:
• Endpoint list
• Request/response examples
• Error codes
• Authentication instructions

Acceptance Criteria (Video)

• Video successfully uploaded
• Final report submitted

Evidence of Completion

Evidence of Completion (Custom API)

• API key provided.
• Successful sample query.
• Delivery of 500,000 labeled addresses to CardanoScan.

Evidence of Completion (Video)

• Uploaded Video
• Subnitted Report

Delivery Month

9

Cost

192300

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1 Attribution Research: Service Providers (60 Days)

• 2x Attribution Analyst,$9,360 ($62.50/hr)
• 1x Attribution Lead, $8,190 ($100/hr)
• 1x Senior Data Scientist, $3,510 ($135/hr)
• 1x Lead Data Engineer ,$2,340 $130/hr
• Total: $25,300 (56,200 ADA)

Milestone 2 Attribution Research: Sanctions & High-Risk Organizations (30 Days)

• 2× Attribution Analyst, $12,740 ($62.50/hr)
• 1× Attribution Lead, $12,740 ($100/hr)
• 1× Senior Data Scientist, $7,280 ($135/hr)
• 1× Lead Data Engineer, $3,640 ($130/hr)
• Infrastructure, $1,900
• Total: $38,300 (85,000 ADA)

Milestone 3: API Development (30 Days)

• 1× Senior Blockchain Engineer, $34,200 ($140/hr)
• 1× Senior Product Manager, $16,200, ($125/hr)
• 1× Lead Data Engineer, $15,300 ($130/hr)
• 1× Senior Solution Architect, $15,300 ($150/hr)
• 1× Customer Success Manager, $7,200 ($90/hr)
• Infrastructure + Security, $9,000
• Total: $90,000 (200,000 ADA)

Milestone 4 Attribution Research: Scams (30 Days)

• 2× Attribution Analyst, $11,250 ($62.50/hr)
• 1× Attribution Lead. $11,250 ($100/hr)
• 1× Senior Data Scientist, $13,500 ($120/hr)
• 1× Lead Data Engineer, $6,750 ($130/hr)
• Infrastructure, $2,250
• Total: $45,000 (100,000 ADA)

Milestone 5 Attribution Research: Darknet Markets (30 Days)

• 2x Attribution Analyst, $9,990 ($62.50/hr)
• 1x Attribution Lead, $9,990 ($100/hr)
• 1x Senior Data Scientist, $6,660 ($120/hr)
• 1x Lead Data Engineer, $3,330 ($130/hr)
• Infrastructure, $3,330
• Total: $33,300 (74,000 ADA)

Milestone 6 Custom API & Video (60 Days)

Custom API

• Senior Blockchain Engineer, $37,400 ($140/hr)
• Senior Product Manager, $18,700 ($125/hr)
• Lead Data Engineer, $14,450, 111hrs ($130/hr)
• Senior Solution Architect, $7,500, 50hrs ($150/hr)
• Infrastructure, $6,950
• Total: $85,000 (189,000 ADA)

Video

• Marketing Team, $600 (100/hr)
• Videographer / Editor, $600 (60/hr)
• Senior Solution Architect, $300 (150/hr)
• Total $1,500 (3,300 ADA)

Full budget: 707,500 ADA with 20,000 ADA for price fluctations, equalling 727,500.

[Final Pitch] Value for Money

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

Value for Money

This proposal delivers exceptional value for the Cardano ecosystem by combining high-impact attribution infrastructure, enterprise-grade compliance tooling, and significant in-kind software licensing—all at a cost far below comparable initiatives in other ecosystems.

Benchmarked Against Industry Examples

The Chainalysis proposal for the Polkadot Relay Chain requested 1 million DOT to build foundational attribution and monitoring infrastructure for ecosystem-wide safety. (https://polkadot.polkassembly.io/referenda/684))

In contrast, this proposal delivers comparable ecosystem-wide attribution coverage, plus additional commercial-grade software licenses worth $300,000, for a total funding amount equivalent to the value of the licenses alone.

Our hourly rates are competitive, backed by experience working with leading foundations such as Sui, Hedera, Stellar, ICP, Celestia, and Aleo, where similar ecosystem-wide integrations were successfully deployed.

Clear ROI and Economic Impact

Merkle Science’s integrations across multiple L1 ecosystems have consistently produced measurable economic results:

• 40% growth in on-chain economic activity over 24 months**, as compliance-ready ecosystems attract more developers, institutions, and capital.
• Increased inflows from liquidity providers, stablecoin issuers, fintechs, and RWA partners, all of whom require strong counterparty screening and attribution transparency before entering an ecosystem.
• Reduction in ecosystem-wide compliance and reputational risks, which directly supports sustainable, long-term capital access.

Cardano stands at a similar inflection point—with growing DeFi activity, sanctioned exposure risks, and rising institutional interest. Providing robust attribution now protects the ecosystem while unlocking the next phase of mainstream adoption.

High-Value Output for Every ADA Spent

This proposal represents a high-leverage investment because it delivers:

• Full attribution and labeling infrastructure** for all Cardano assets.
• $300,000 worth of Merkle Science software licenses**, free to the community as part of this proposal.
• Long-term infrastructure that reduces risk, boosts capital flows, and empowers developers to build safely.
• Compliance tooling that supports wallets, DEXs, RWA platforms, builders, and enterprise partners at zero cost to them.

Summary

For a funding amount equivalent to the software licenses alone, Cardano receives:

• Enterprise-grade attribution
• Critical ecosystem risk reduction
• Future-proof compliance infrastructure
• A clear ROI pathway with expected ~40% economic activity uplift over two years

[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