Sundial + Fairway: Institutional Identity for Bitcoin DeFi

[Proposal setup] Proposal title

Please provide your proposal title

Sundial + Fairway: Institutional Identity for Bitcoin DeFi

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

600000

[Proposal Summary] Time

Please specify how many months you expect your project to last

7

[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?

As Bitcoin capital aims to enter Cardano, institutions hit fragmented onboarding and repeated KYC. Cardano needs a unified, privacy-preserving KYC layer to unlock compliant, high-value Bitcoin DeFi.

[Proposal Summary] Supporting Documentation

Supporting links

• https://www.sundialprotocol.com/
,
• https://www.fairway.global/

[Proposal Summary] Project Dependencies

Does your project have any dependencies on other organizations, technical or otherwise?

Yes

Describe any dependencies or write 'No dependencies'

Cardano mainnet: final deployment and pilot integrations will be built directly on Cardano L1. Balius framework: developed by TxPipe, used as the transaction orchestration layer for protocol integrations. Midnight network: used for generating and verifying zero-knowledge identity proofs via Fairway’s SDK.

[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 infrastructure outputs will be fully open-source under MIT licence, and available on Github.

[Theme Selection] Theme

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

Identity & Verification

[Campaign Category] Category Questions

Describe your established collaborations.

Solv (https://solv.finance/)

Sundial’s primary institutional collaborator for this project is Solv, a leading global provider of Bitcoin yield products generating more than $5M in annual revenue. Solv operates institutional-grade BTC structured products, yield vaults, and credit instruments trusted by professional trading desks, funds, and corporates across Asia and the U.S.

Solv works with Sundial as an institutional design and product-validation partner, helping define the compliance, user experience, and identity requirements that Bitcoin-native institutions expect before allocating capital into Cardano DeFi. Solv is also a potential early adopter of Sundial’s BTC onboarding flows and Fairway’s zero-knowledge identity framework, providing real-world feedback from active BTC allocators.

(If further details are needed, Solv can provide a confidential letter of support directly to the Catalyst team.)

Describe funding commitments.

Solv will contribute non-financial institutional support to this project in the form of:

• Product validation for Bitcoin-backed DeFi use cases
• Compliance alignment based on their operational requirements across multiple regulated markets
• UX and risk review based on their professional clients’ expectations
• Pilot-user participation, offering institutional testers for the integrated UX and permissioned access flow

While Solv is not contributing direct grant funding, their involvement represents significant in-kind institutional value, equivalent to tens of thousands of dollars in product review and compliance oversight normally required by institutional partners. Their engagement is grounded in their strategic interest in deploying Bitcoin-native structured products into Cardano once a compliant identity layer exists.

Describe your key performance metrics.

To ensure meaningful institutional alignment, the following KPIs directly measure readiness for BTC-native, compliance-aware adoption:

Institutional KPIs

• 5 institutional interviews completed, including Solv and other BTC desks
• Documented compliance standards derived from Solv’s active BTC products
• Institutional UX acceptance benchmark: ≥80% positive usability feedback

These KPIs ensure the framework meets real professional requirements.

Technical / Integration KPIs

• 2 pilot protocol integrations using the compliant identity flow
• Successful KYC Zero-Knowledge proof issuance via Fairway
• Targeted sub-3 second credential verification inside dApp flows

These KPIs confirm that the infrastructure functions in real-world workflows.

Adoption & Reuse KPIs

• 1 published identity SDK with integration guide
• 2 ecosystem protocols expressing intent to adopt
• Institution-ready onboarding flow demonstrated publicly

These KPIs validate ecosystem-level adoption and long-term reuse.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

As Bitcoin capital begins to flow into Cardano, new opportunities are opening for institutional and fintech participation. Yet this transition exposes a serious gap: while Cardano offers strong technology and decentralization, it lacks the user experience and compliance infrastructure that institutions require to participate confidently.

The challenge is not theoretical. Global regulatory events - from wallet blacklisting during the Ukraine war to the U.S. ban on Tornado Cash - have shown that the absence of identity and compliance controls in DeFi can turn privacy into risk.

For institutional funds, the result is hesitation: an American asset manager trading Cardano-based DeFi with Bitcoin reserves could unknowingly interact with a sanctioned address, facing reputational and legal consequences.

At the same time, exposing personal data on-chain is unacceptable.

To resolve this, our project will bridge compliance and decentralization through a modular, KYC-backed UX and identity framework purpose-built for institutional and Bitcoin-native DeFi.

The solution unites Sundial’s Bitcoin infrastructure and Fairway’s identity system built on Midnight.

Fairway converts verified KYC and real-world credentials into zero-knowledge proofs, allowing on-chain permissioning where access is proven, but personal data remains private.

This approach ensures Cardano DeFi can remain open and permissionless, while still enabling identity-permissioned user experiences for regulated use cases such as institutional trading, Bitcoin-backed lending, or RWA participation.

What We Will Build

1. Institutional Research and Customer InterviewsFairway and Sundial will interview five existing and potential Sundial institutional customers to understand what regulated users expect from Bitcoin-based DeFi.These insights will define the compliance, jurisdictional, and UX standards needed for adoption.
2. Protocol Evaluation and SelectionBased on that research, we will analyze six Cardano DeFi protocols to identify which are best suited for compliant integration.Two will be selected for pilot implementation, representing distinct DeFi use cases.
3. Unified UX and Identity FrameworkFairway will design an Identity Center and user flows that merge Bitcoin onboarding and identity verification into one intuitive interface.Users complete KYC once, then receive a Midnight-issued proof that grants or denies access across compatible Cardano dApps — without revealing their personal data.
4. Integration Layer via BaliusUsing Balius, developed by TxPipe, the framework will handle transaction composition and protocol interaction across the selected DeFi integrations.This creates a reusable backend layer where any project can plug in identity access logic.
5. Open Framework and ReuseOnce tested and deployed on Cardano mainnet, the architecture, SDKs, and documentation will be published openly, enabling other builders to adopt compliant and user-friendly designs.

For Sundial, this delivers an institutional-grade user interface for Bitcoin DeFi — a single access point where compliance, usability, and privacy meet.

For Cardano, it creates a trusted entry layer for institutional Bitcoin liquidity, proving that decentralized finance can meet real-world regulatory and usability standards without sacrificing privacy or decentralization.

[Your Project and Solution] Impact

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

This project lays the groundwork for Bitcoin-native and institutional DeFi adoption on Cardano — creating the clarity, compliance, and user experience needed for real-world financial participation.

Today, Cardano’s infrastructure is ready for innovation, but the user experience and compliance layers remain fragmented. Institutions and professional users are not looking for yield farming dashboards — they are looking for trustworthy, auditable financial rails that meet the same standards as traditional platforms while still preserving the decentralization ethos.

Our framework makes this possible by merging Bitcoin liquidity, institutional trust, and privacy-preserving identity into one consistent user experience.

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1. Enabling Institutional Bitcoin DeFi

With Sundial unlocking Bitcoin liquidity on Cardano, this project ensures that capital can enter the ecosystem safely and compliantly.

Institutions and Bitcoin holders will be able to access Cardano DeFi through an interface that:

• embeds Fairway’s Midnight-based identity verification,
• clearly signals which products meet compliance standards,
• and enforces access rules automatically via zero-knowledge proofs.

This lowers the perceived risk of on-chain participation, making Cardano an attractive venue for funds, asset managers, and fintechs seeking regulated exposure to Bitcoin-backed products.

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2. Turning DeFi into a Trusted Product Platform

By combining modular UX with identity-aware architecture, Cardano DeFi becomes product-ready for professional markets.

This means:

• Fintech teams can white-label or build on top of the framework to offer compliant crypto services in their jurisdictions.
• Institutions can manage risk through access-controlled DeFi interactions rather than opaque wallets.
• Developers can focus on innovation instead of rebuilding compliance infrastructure.

The result: faster time-to-market for compliant financial apps, stronger institutional confidence, and broader ecosystem adoption.

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3. Simplified, Unified User Journeys

For users, the experience becomes as simple as logging into a traditional financial app — but without surrendering privacy.

They onboard their Bitcoin once through Sundial, complete a KYC verification through Fairway’s identity layer, and then gain seamless access to Cardano DeFi products across protocols.

No repeated verifications, no switching between multiple wallets or dApps — just one consistent experience backed by privacy-preserving proofs.

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4. Ecosystem-Wide Benefits

The framework will be open-source, reusable, and modular, providing immediate benefits across Cardano:

• Developers gain access to ready-made UI patterns and SDKs for identity-aware DeFi.
• Protocols can adopt the standard to attract new, compliant users.
• Institutions gain a clear, auditable path to participate in Bitcoin-based and Cardano-native DeFi.

This initiative helps transform Cardano from a network of protocols into a trusted financial platform — bridging the gap between decentralized systems and institutional trust requirements.

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5. Long-Term Sustainability

Because the project is grounded in Sundial’s real institutional user base, the outcomes are not theoretical.

The pilots and integrations will directly validate product-market fit with real customers.

Once deployed, the framework remains valuable beyond this proposal:

• Sundial can extend it to production Bitcoin flows.
• Other DeFi protocols can adopt it without starting from scratch.
• Fairway can continue maintaining the identity SDK as a shared open component for the ecosystem.

[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?

Team Strength & Experience

This proposal is delivered by two experienced Cardano ecosystem teams - Sundial and Fairway - combining deep expertise in cross-chain infrastructure, institutional product design, and privacy-preserving identity.

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Sundial (Lead Applicant & Institutional Design Partner)

Sundial is building the infrastructure that brings Bitcoin-native liquidity into Cardano through non-custodial, atomic swap technology.

This work unlocks access to the world’s largest crypto asset for use in Cardano-based DeFi, enabling trading, lending, and other use cases without centralized intermediaries.

In this project, Sundial leads:

• Institutional outreach alignment and coordination, with interviews of five real or potential customers to define Bitcoin DeFi product requirements.
• Architecture alignment between Bitcoin onboarding and identity-enabled DeFi flows.
• Integration management, ensuring Balius-powered pilots are ready for Cardano mainnet.
• Final deployment and public release under the Sundial brand.

Sundial’s proximity to real institutional users ensures that all design and implementation decisions are grounded in genuine business needs, not theoretical assumptions.

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Fairway (Identity & UX Partner)

Fairway is a core Midnight identity infrastructure startup focused on enabling compliant DeFi through privacy-preserving verification.

Fairway’s technology transforms real-world KYC and credential data into zero-knowledge proofs on Midnight, Cardano’s data protection sidechain — enabling dApps to verify user eligibility without seeing or storing personal data.

In this project, Fairway leads:

• Identity system design and SDK integration for on-chain permissioning.
• UX research and interface design for a unified, KYC-backed DeFi experience.
• Development of the Identity Center, where users can view credentials, verify eligibility, and manage access proofs.
• Collaboration on pilot integrations, ensuring seamless coordination with Balius and protocol partners.

Fairway’s role ensures that compliance, privacy, and user experience are aligned from the very first design iteration.

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Technology Foundation

The project leverages Balius, a headless transaction builder developed by TxPipe, as its transaction orchestration framework.

Balius provides a flexible architecture for integrating multiple DeFi protocols without locking into a specific vendor.

This allows the resulting UX and identity framework to be protocol-agnostic, modular, and extensible.

Integration development for pilot protocols will use ecosystem-aligned Cardano teams or open vendor contributions, ensuring flexibility in resourcing and sustainability.

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Feasibility & Validation Approach

To ensure delivery and practical results, the project will follow a staged, verifiable process:

1. Partner Alignment & Requirements Confirmation
   • Confirmed requirements from institutional partners for Bitcoin-backed DeFi access on Cardano.
   • Formalized UX, compliance, and onboarding specifications aligned with institutional standards.
   • Integration alignment plan between Sundial’s BTC infrastructure and Fairway’s identity framework.
2. Collaborative Design
   • UX and identity prototypes reviewed jointly by both teams and validated with stakeholders.
3. Incremental Implementation
   • Build first the identity and UI components, then pilot integrations using Balius.
4. Testing & Validation
   • Conduct testnet validations with both institutional test users and protocol partners.
5. Mainnet Launch
   • Deploy Cardano L1-compatible UX and integration layer.
   • Ensure Sundial’s interface is design-ready for its production release.

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Track Record & Ecosystem Commitment

Both teams are active, long-term contributors to Cardano’s infrastructure ecosystem.

They have collaborated across multiple technical initiatives and maintain a shared commitment to open, reusable tooling that strengthens Cardano’s developer and institutional landscape.

This combination of technical credibility, real user access, and ecosystem alignment ensures the project can be delivered efficiently, with tangible results for both builders and institutions.

[Milestones] Project Milestones

Milestone Title

Institutional Alignment & Requirements Confirmation

Milestone Outputs

• Confirmed requirements from institutional partners for Bitcoin-backed DeFi access on Cardano.
• Formalized UX, compliance, and onboarding specifications aligned with institutional standards.
• Integration alignment plan between Sundial’s BTC infrastructure and Fairway’s identity framework.

Acceptance Criteria

• Engagement with a minimum of five institutional stakeholders resulting in validated compliance and UX requirements.
• Documented technical and regulatory requirements approved by at least two prospective institutional integrators.
• Clear integration criteria established for Cardano DeFi protocols participating in institutional flows.

Evidence of Completion

• Signed or acknowledged requirements summaries from participating institutional partners.
• Finalized institutional onboarding specification document.
• Published integration alignment plan covering BTC onboarding, identity flows, and compliance pathways.

Delivery Month

1

Cost

120000

Progress

10 %

Milestone Title

UX & Identity Design

Milestone Outputs

• Figma prototypes for unified onboarding and DeFi access to be used by Bitcoin holders and institutions
• Identity Center UI and interaction flows
• Architecture and credential model for Midnight-based ZK KYC proofs

Acceptance Criteria

• UX flows finalized and validated by both Sundial and Fairway technical teams
• Identity UI meets institutional usability and compliance requirements
• ZK proof architecture documented with clear integration points

Evidence of Completion

• Delivered UX mock-ups and flow diagrams
• Technical documentation of KYC-to-ZK proof process
• Consolidated feedback report from institutional review group

Delivery Month

2

Cost

100000

Progress

20 %

Milestone Title

Core UI & Balius Integration Setup

Milestone Outputs

• Frontend application shell with wallet connection and navigation
• Balius runtime integrated as transaction orchestration layer
• Adapter stubs implemented for minimum of two selected DeFi protocols/partners

Acceptance Criteria

• Users can connect a wallet and navigate the initial interface
• Balius integration successfully triggers and validates test transactions
• DeFi adapter structure operational and ready for protocol-specific logic

Evidence of Completion

• UI code repository (public or private)
• Balius integration logs and test transaction outputs
• Technical documentation of the modular adapter framework

Delivery Month

3

Cost

110000

Progress

40 %

Milestone Title

Identity Integration & Protocol Pilots

Milestone Outputs

• Identity SDK integrated with functional Balius transaction engine
• Full Midnight ZK credential verification added to user flow
• Two partner pilot protocol integrations demonstrating early compliant access

Acceptance Criteria

• Users can authenticate with ZK credentials and execute gated transactions
• Both selected DeFi protocols function end-to-end with identity-based permissioning
• Integration validated by internal institutional reviewers

Evidence of Completion

• Functional demo environment showcasing both protocol flows
• Test logs confirming ZK credential verification and permissioning
• Recorded validation session and feedback summary

Delivery Month

5

Cost

110000

Progress

60 %

Milestone Title

Validation & Ecosystem Review

Milestone Outputs

• Usability and compliance feedback sessions with pilot users and ecosystem contributors
• Refined UX and updated design assets prepared for Sundial integration
• Finalized institutional UX integration documentation

Acceptance Criteria

• User experience validated against earlier documented institutional expectations
• UX revisions implemented and approved by both Sundial and Fairway project teams
• Technical and UX documentation completed for release

Evidence of Completion

• Usability testing report and summary of revisions
• Final UX asset package (flows, components, screens)
• Updated technical documentation and developer notes

Delivery Month

6

Cost

80000

Progress

80 %

Milestone Title

Mainnet Launch & Open Framework Release

Milestone Outputs

• Deployment of pilot integrations to Cardano L1 mainnet and within Sundial.
• Production-ready UX for Sundial’s Bitcoin DeFi interface.
• Public release of SDKs, integration guides, and developer documentation.

Acceptance Criteria

• Fully functional mainnet deployment using the Balius + Fairway identity framework.
• UX meets institutional onboarding requirements and passes internal validation.
• Open-source resources available for reuse by ecosystem teams.

Evidence of Completion

• Live mainnet URL or recorded transaction demos.
• Public GitHub repository containing SDKs and documentation.
• Community announcement, post-launch feedback, and validation summary.

Delivery Month

7

Cost

80000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1: Institutional Research & Requirements Mapping (Month 1–2)

Budget: 120,000 ADA

• Institutional Research & Interviews with 5 Sundial Customers (Sundial): 35,000 ADA
• Cardano Protocol Evaluation (6 Projects) & Selection Report (Sundial): 25,000 ADA
• Compliance & UX Requirement Mapping (Fairway): 25,000 ADA
• Project Management & Coordination (Fairway): 20,000 ADA
• Preliminary Identity & Architecture Alignment Plan (Fairway): 15,000 ADA

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Milestone 2: UX & Identity Design (Month 2–3)

Budget: 100,000 ADA

• Figma Prototypes for Unified BTC + DeFi Experience (Fairway): 25,000 ADA
• Identity Center UI & Flow Design (Fairway): 25,000 ADA
• Midnight ZK Credential Structure & Integration Docs (Fairway): 25,000 ADA
• User Review & Institutional Feedback Sessions (Sundial): 15,000 ADA
• Design Alignment & Compliance Validation (Fairway): 10,000 ADA

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Milestone 3: Core UI & Balius Integration Setup (Month 3–4)

Budget: 110,000 ADA

• Frontend Shell & Navigation Implementation (Fairway): 35,000 ADA
• Balius Runtime Setup (using TxPipe framework) (Fairway): 25,000 ADA
• Protocol Adapter Stubs for Two Selected Protocols (Fairway): 25,000 ADA
• UX Integration Coordination & Technical Oversight (Sundial): 25,000 ADA

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Milestone 4: Identity Integration & Protocol Pilots (Month 4–5)

Budget: 110,000 ADA

• Identity SDK Integration with Balius Transactions (Fairway): 35,000 ADA
• ZK Proof Verification Logic & Credential Flows (Fairway): 25,000 ADA
• Two Pilot Protocol Integrations (Fairway): 25,000 ADA
• Institutional Testing & Internal Validation (Sundial): 25,000 ADA

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Milestone 5: Validation & Ecosystem Review (Month 5–6)

Budget: 80,000 ADA

• Usability Testing & UX Refinement (Fairway): 25,000 ADA
• Institutional Pilot Feedback & Review Sessions (Sundial): 20,000 ADA
• Optimization & Final Design Adjustments (Fairway): 20,000 ADA
• Documentation Preparation for Open Release (Fairway): 15,000 ADA

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Milestone 6: Mainnet Launch & Open Framework Release (Month 6–7)

Budget: 80,000 ADA

• Mainnet Deployment & Hosting (Sundial): 25,000 ADA
• Public SDKs, Integration Guides, and Developer Docs (Fairway): 25,000 ADA
• Launch Testing & Final QA (Fairway): 15,000 ADA
• Institutional Partner Onboarding & Launch Coordination (Sundial): 15,000 ADA

[Final Pitch] Value for Money

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

This proposal focuses on high-leverage outcomes rather than broad infrastructure spending:

• Builds a working institutional UX and identity layer for Cardano DeFi in seven months.
• Uses existing open tools (Balius) to minimize engineering overhead.
• Produces reusable SDKs, designs, and documentation for future builders.
• Aligns directly with Cardano’s next phase - Bitcoin DeFi readiness and institutional adoption.
• Prepares for financial institutions with billions of dollars to be onboarded into Cardano.
• Becomes part of the underlying infrustrucure and compliance layer that will build out the next version of the internet.

[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