HydroX: A Stablecoin-Based Perpetual DEX on Cardano

[Proposal setup] Proposal title

Please provide your proposal title

HydroX: A Stablecoin-Based Perpetual DEX on Cardano

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

180000

[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?

There’s still very little real utility for stablecoins on Cardano, and there’s no stablecoin-based perp DEX. On top of that, users can’t trade major external assets beyond CNTs.

[Proposal Summary] Supporting Documentation

Supporting links

• https://hydrox.fi
,
• https://github.com/HydroX-labs/HydroX
,
• https://github.com/HydroX-labs/HydroX-smart-contracts

[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.

Yes License and Additional Information The product is fully open source under the GPLv3 license.

[Theme Selection] Theme

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

DEX

[Campaign Category] Category Questions

Describe what makes your idea innovative compared to what has been previously launched in the market (whether by you or others).

Cardano currently has no stablecoin-based perpetual DEX. Our goal is to deliver CEX-level user experience on Cardano. We will build a GMX-style engine, redesigned for Cardano’s eUTXO model. and In the future, we plan to scale using Hydra, enabling near-instant L2-level execution. This DEX is fundamentally different from existing AMM/spot DEXs, it introduces a new category of trading infrastructure. It can bring significant volume and liquidity into the Cardano ecosystem for the first time.

Describe what your prototype or MVP will demonstrate, and where it can be accessed.

The MVP will be publicly accessible through a dedicated testnet website and a GitHub repository containing the smart contract code.

• Perpetual trading UI with long/short functionality
• Stablecoin-based collateral model demonstrating position margining
• Pricing oracle integration for accurate real-time feeds
• Position opening and closing with full trade lifecycle
• Basic funding rate mechanism to balance long/short interest
• Liquidation testing to validate risk management
• Public testnet website where users can try the MVP
• Smart contract testnet addresses for transparency and on-chain verification

Describe realistic measures of success, ideally with on-chain metrics.

We will measure success based on real user activity on the Cardano testnet during the first month after releasing the Perp DEX prototype.

Active unique wallets:

→ 30–50 wallets interacting with the protocol

(Realistic for early-stage Cardano DeFi testnet adoption)

Total trading volume:

→ 15,000–40,000 ADA equivalent in simulated trading on the testnet

(Reflects meaningful usage without inflating expectations)

Total on-chain transactions:

→ 250–600 transactions, including:

• trade execution
• margin adjustments
• oracle calls
• position updates
• (Demonstrates system reliability, protocol usage, and user engagement)

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Cardano needs a DeFi service that can attract broad usage and generate meaningful on-chain activity. In most mature ecosystems, perpetual DEXs are the largest drivers of volume and liquidity, yet Cardano currently lacks a stablecoin-based perp platform. Existing perp solutions mainly rely on CNT-denominated collateral, which limits trading options and reduces accessibility. Cardano also suffers from low stablecoin utility, restricting the growth of its broader DeFi economy.

Our solution is to build a stablecoin-based perpetual DEX that supports major trading pairs such as BTC and ETH, giving users a much wider range of markets without relying on centralized exchanges. By using stablecoins for collateral and liquidity provisioning, the platform significantly increases the utility of stablecoins within the Cardano ecosystem and enables high-volume, ecosystem-native trading that currently does not exist. This DEX will serve traders, liquidity providers, and stablecoin holders who currently must leave Cardano to access perpetual markets.

[Your Project and Solution] Impact

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

This product will bring significant positive impact to the Cardano ecosystem by enabling users to trade a wide range of major assets similar to what they can access on centralized exchanges without ever leaving the Cardano network. By offering diverse trading pairs and CEX-level functionality, the platform will attract more users, increase overall trading activity, and drive substantial on-chain volume.

A stablecoin-based perpetual DEX also strengthens the role of stablecoins within Cardano. As users provide stablecoin collateral and liquidity, the demand for stablecoins increases, resulting in higher stablecoin circulation, deeper liquidity, and more stablecoin-denominated transactions across the ecosystem.

Ultimately, this project will help keep trading volume, liquidity, and user activity inside Cardano rather than flowing outward to external CEXs or other chains, supporting long-term growth and a healthier, more active DeFi environment.

[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 combines strong backend engineering, DevOps expertise, and hands-on Web3 experience, making us fully capable of delivering a reliable, scalable, and production-ready Perpetual DEX on Cardano.

• Backend & Perp Engine Development

Experience working on high-throughput exchange systems, including order-handling logic, matching-engine workflows, and stability-focused backend services.

This experience directly supports implementing the off-chain execution logic of a Perpetual DEX on Cardano, where reliability, latency, and consistent trade workflows are essential.

• Modern Engineering Stack (Go / Python / Kotlin / TypeScript / Java / Javascript)

We use performant backend languages and modern front-end frameworks to build fast, maintainable off-chain logic and a responsive trading interface.

• Infrastructure & Reliability Engineering

Strong background in cloud-native architecture, automation, CI/CD, monitoring, and distributed system stability ensuring the DEX can operate under real-world load with minimal downtime.

• Cardano Understanding & eUTXO Expertise

We have a strong conceptual understanding of Cardano’s eUTXO model, transaction composition, backend orchestration, and execution patterns. In addition, our participation in Cardano Summit 2025 and involvement in the Cardano community (including Intersect membership) reinforce our familiarity with ecosystem development and user needs.

• Practical Web3 & DeFi Knowledge

Our team regularly uses dApps, DeFi platforms, and L2 networks across multiple ecosystems. This real-world trading and user experience informs our UX decisions and ensures the Perp DEX aligns with market expectations, trading behavior, and modern DeFi standards.

To validate feasibility, we will deliver a full public testnet MVP, publish all smart contract code openly, and conduct community driven testing to verify reliability, performance, and end-to-end execution.

Detailed resources regarding our architecture design, system structure, smart contracts under development, and UI mockups are available in the GitHub repositories linked in the 'Supporting Documentation' section.

[Milestones] Project Milestones

Milestone Title

Architecture Design & Initial System Setup

Milestone Outputs

• Complete the full architecture design document, including trading engine logic, vault model, oracle flow, and system interactions.
• Implement and commit the base structure for smart contracts, backend modules, and frontend scaffolding.
• Set up the unified development environment and CI pipeline for consistent builds.

Acceptance Criteria

• The full architecture document is completed and published in the GitHub repository.
• Base smart contract, backend, and frontend structures are implemented and committed with clear project organization.
• The development environment builds successfully, allowing the project to run locally without errors.

Evidence of Completion

• GitHub repository containing architecture docs
• Initial SC/Backend/Frontend code committed
• Successful local build logs or screenshots

Delivery Month

1

Cost

50000

Progress

20 %

Milestone Title

Core Protocol & Trading Engine Development

Milestone Outputs

• Implementation of core smart contract functions including collateral deposits/withdrawals, position opening/closing, and liquidation logic.
• Integration of oracle price feeds with full PnL calculation and fee models.
• Backend Perp engine with order execution, risk checks, and lifecycle management.
• Functional UI wired to core features for early-stage interaction testing.

Acceptance Criteria

• Core smart contracts compile and execute in a test environment
• Backend trading engine performs simulated trades successfully
• Functional UI interacts with backend and contracts for core operations

Evidence of Completion

• GitHub commits of core smart contract modules
• Backend API and engine test logs
• Screenshots or video of UI performing test trades

Delivery Month

3

Cost

40000

Progress

40 %

Milestone Title

Full Integration, QA, and UI/UX Implementation

Milestone Outputs

• Complete full end-to-end integration between smart contracts, backend engine, and frontend interface.
• Conduct extensive debugging, refactoring, and test scenarios across all trade flows.
• Apply the final UI/UX design with responsive layouts, preparing a stable testnet-ready build.

Acceptance Criteria

• All implemented features must pass full end-to-end testing across smart contracts, backend services, and frontend flows.
• UI/UX design must be fully applied with responsive layouts and improved user navigation.
• Core bugs identified in integration testing must be resolved.
• A deployable testnet build must be produced and verified as stable for public testing.

Evidence of Completion

• E2E test logs and internal QA summary
• Final UI screenshots / build artifact
• GitHub release tagged as “testnet-ready”

Delivery Month

5

Cost

30000

Progress

70 %

Milestone Title

Public Testnet Launch

Milestone Outputs

• Deploy all smart contracts to the Cardano public testnet with live endpoints.
• Launch the public trading website supporting core markets (e.g., BTC/USD, ETH/USD).
• Collect user feedback, bug reports, and on-chain testnet metrics for improvement.

Acceptance Criteria

Deploy all smart contracts to the Cardano public testnet with live endpoints.

Launch the public trading website supporting core markets (e.g., BTC/USD, ETH/USD).

Collect user feedback, bug reports, and on-chain testnet metrics for improvement.

Evidence of Completion

• Testnet contract addresses
• Public testnet webapp link
• On-chain metrics: wallets, trades, volume
• Feedback summary document

Delivery Month

6

Cost

30000

Progress

80 %

Milestone Title

Mainnet Launch & Close-out Report

Milestone Outputs

• Deploy all smart contracts to the Cardano mainnet with full verification and configuration.
• Launch the production trading interface with stable infrastructure, monitoring, and redundancy in place.
• Apply improvements from testnet results and finalize system tuning for mainnet operations.
• Prepare and deliver the official project close-out report and close-out video.

Acceptance Criteria

• All testnet improvements applied and validated in pre-mainnet checks.
• Mainnet contracts deployed and verified, with monitoring, alerting, and redundancy systems operational.
• Production platform launches successfully, and real user trades complete without errors.

Evidence of Completion

• Mainnet contract addresses
• Production website link
• Monitoring dashboard screenshots
• Final Close-out Report + Video published

Delivery Month

7

Cost

30000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Milestone 1: Architecture Design & Initial System Setup — 50,000 ADA

• System Architecture Design (Architect): 20,000 ADA

Designing Vault model, PnL logic, and backend architecture (~130 hrs).

• Backend & DB Schema Setup (Backend): 15,000 ADA

Defining database schemas and matching engine structure (~100 hrs).

• DevOps Environment Setup: 10,000 ADA

Setting up CI/CD pipelines, repositories, and local testing env (~70 hrs).

• Technical Documentation: 5,000 ADA

Production of the full architecture design document on GitHub.

Milestone 2: Core Protocol & Trading Engine Development — 40,000 ADA

• Smart Contract Engineering: 15,000 ADA

Implementation of core logic: Collateral, Position, and Liquidation (~100 hrs).

• Matching Engine Development: 15,000 ADA

Developing order execution engine, risk check modules, and API services (~100 hrs).

• Frontend Integration (Alpha): 10,000 ADA

Wiring UI to backend/contracts for early interaction testing (~70 hrs).

Milestone 3: Full Integration, QA, and UI/UX Implementation — 30,000 ADA

• Frontend & UI/UX Implementation: 12,000 ADA

Finalizing responsive layouts, trade flows, and charting features (~80 hrs).

• System Integration (Backend): 12,000 ADA

End-to-End integration between Smart Contracts, Backend, and Frontend (~80 hrs).

• QA & Internal Testing: 6,000 ADA

Conducting extensive debugging and stress test scenarios (~40 hrs).

Milestone 4: Public Testnet Launch — 30,000 ADA

• Cloud Architecture & Deployment (Labor): 10,000 ADA

Deploying secure nodes to public testnet and configuring auto-scaling (~70 hrs).

• Infrastructure Costs (Third-party Services): 10,000 ADA

Server/Cloud fees (AWS/GCP), Load Balancers (Allocated for Testnet & 6-mo Mainnet buffer).

• Community Feedback & Hotfixes: 10,000 ADA

Managing user feedback and rapid code patches during the test phase (~70 hrs).

Milestone 5: Mainnet Launch & Close-out Report — 30,000 ADA

• Project Management & Close-out Report: 15,000 ADA

Admin costs for Monthly Reporting, Final Video, and Project Closing (covering 6+ months).

• Security & Mainnet Deployment: 10,000 ADA

Final production tuning, contract verification, and security checks (~70 hrs).

• Educational Materials: 5,000 ADA

Publishing user guides and tutorials for the live platform.

[Final Pitch] Value for Money

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

Building the first stablecoin-based Perp DEX on Cardano

• Introduces a CEX-level perpetual trading experience directly on Cardano.
• Enables major pairs such as BTC and ETH to be traded natively within the ecosystem.
• Fills one of the most critical missing pieces of infrastructure in Cardano DeFi.

Expands overall stablecoin demand → grows the entire DeFi economy

• The platform’s collateral model is fully stablecoin-based.
• Drives higher stablecoin inflow, trading volume, and liquidity circulation.
• Strengthens on-chain economic activity across the entire ecosystem.

High-quality deliverables relative to the requested budget

• With 180k ADA, the project delivers:
• Fully functional smart contracts
• Complete backend perpetual trading engine
• Production-grade frontend UI/UX
• Public testnet launch
• Mainnet launch

Catalyst funding directly converts into measurable on-chain growth

• After mainnet launch, the following metrics will increase immediately:
• Active wallets
• Trading volume
• Transaction count
• Stablecoin usage
• TVL

[Self-Assessment] Self-Assessment Checklist

I confirm that evidence of prior research, whitepaper, design, or proof-of-concept is provided.

Yes

I confirm that the proposal includes ecosystem research and uses the findings to either (a) justify its uniqueness over existing solutions or (b) demonstrate the value of its novel approach.

Yes

I confirm that the proposal demonstrates technical capability via verifiable in-house talent or a confirmed development partner (GitHub, LinkedIn, portfolio, etc.)

Yes

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

Yes

I confirm that the proposal clearly defines the problem and the value of the on-chain utility.

Yes

I confirm that the primary goal of the proposal is a working prototype deployed on at least a Cardano testnet.

Yes

I confirm that the proposal outlines a credible and clear technical plan and architecture.

Yes

I confirm that the budget and timeline (≤ 12 months) are realistic for the proposed work.

Yes

I confirm that the proposal includes a community engagement and feedback plan to amplify prototype adoption with the Cardano ecosystem.

Yes

I confirm that the budget is for future development only; excludes retroactive funding, incentives, giveaways, re-granting, or sub-treasuries.

Yes

[Required Acknowledgements] Consent & Confirmation

I Agree

Yes