MLabs FeesaSwap: Wallet & dApp Ready ADA-less Tx Fees

[Proposal setup] Proposal title

Please provide your proposal title

MLabs FeesaSwap: Wallet & dApp Ready ADA-less Tx Fees

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

194914

[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?

Cardano transactions (txs) need ADA for fees: native token-only users must detour into exchanges, KYC, and swaps, creating friction and lost conversions. Wallets & dApps lack support for ADA-less txs.

[Proposal Summary] Supporting Documentation

Supporting links

• https://linktr.ee/FeesaSwap

[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.

Project IP is proprietary

[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).

FeesaSwap is innovative not because it invents the idea of ADA-less fees, but because it turns that idea into a reusable, ecosystem-wide infrastructure layer rather than a one-off feature bolted onto a single protocol.

Previous work on Cardano has explored fee abstraction in two main ways: ledger-level conceptual designs, such as Babel Fees, which have not yet reached production, and project-specific solutions, including sponsored-fee systems that draw from heavily ADA-funded UTxOs governed by per-dApp rulesets and, in some cases, a dedicated validator network. These approaches are powerful and provide a streamlined route to fee sponsorship, but they either remain theoretical or are relatively inflexible, requiring each protocol to set up and maintain its own tanks, rules, and integrations.

FeesaSwap takes a more flexible approach by operating as a general smart-contract and off-chain infrastructure layer. It is a live mainnet protocol and backend that creates an open, shared, permissionless fee-liquidity market for the whole ecosystem. Liquidity providers post positions once, and any FeesaSwap-integrated wallet or dApp can draw on that liquidity to let users pay fees in supported tokens. Crucially, a single wallet integration can unlock ADA-less fees across every dApp that uses that wallet, with no changes required on the dApp side. There is no need for per-dApp tanks, staking protocol tokens, or token-issuer pre-approval: if there is fee liquidity and FeesaSwap support for a token, that token can be used to pay fees wherever FeesaSwap is in the transaction path. Users can pay with any supported token across integrated dApps without the liquidity provider having to whitelist specific protocols or actions.

In Fund15, we are not just extending Feesa Swap; we are productionizing it. We are adding oracle-backed pricing, scaling backend reliability, and packaging the system as a plug-and-play component that wallets and dApps can drop in to offer one-click ADA-less transactions at critical UX touchpoints (bridges, swaps, games, mints, etc). The combination of a live mainnet protocol, shared fee-liquidity market, and production-ready integration layer is what makes FeesaSwap meaningfully different from both our earlier Catalyst work and other approaches already, and makes this a critically important proposal for expanding monthly transactions volumes and the Cardano user base.

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

Our prototype is far beyond a demo on a slide or a 5-minute video walkthrough: it is the live FeesaSwap deployment on Cardano mainnet, accessible at feesaswap.io. Today, users can already perform ADA-less transactions in supported tokens through this interface. This proposal’s scope is about maturing that live system into a robust, production-ready platform that wallets and dApps can safely depend on.

Over the course of this Fund15 work, the MVP will demonstrate three main things:

1. Reliable ADA-less fee payments in practice.

By the end of the project, feesaswap.io will continue to function as the primary showcase. Here, users will be able to trigger real Cardano transactions that pay fees in supported tokens, with the backend automatically sourcing ADA and collateral as needed. This experience will be driven by our existing mainnet deployment and additions included in this proposal and backed by stronger safety tooling and LP protections.

2. Hardened backend and observability.

Much of the remaining scope is “under the hood,” but it is what makes FeesaSwap safe to integrate at scale. We will complete production safety tooling (including a liquidation/safeguard bot in preprod and mainnet ready for production use), instrument our demo server, off-chain code, indexer, and bots, deploy Prometheus and Grafana, and wire full telemetry and resource-usage collection. A dedicated Cardano node (via Demeter or Cardanow) plus database monitoring and migration setup will ensure that position selection and fee routing remain correct and resilient over time.

3. Integration-readiness for wallets and dApps.

The same backend that powers feesaswap.io will be exposed as a stable, monitored service that partner wallets and dApps can integrate against. While the user-facing proof lives at our main URL, the true MVP outcome is that any FeesaSwap-integrated wallet will be able to route arbitrary transactions through this infrastructure and consistently obtain correct fee quotes, token swaps, and ADA/collateral provisioning.

In short, the prototype/MVP for this proposal is the live FeesaSwap mainnet deployment plus its hardened backend stack, visible to the public at feesaswap.io and verifiable through end-to-end ADA-less transactions and the reliability characteristics demonstrated by our observability and safety tooling.

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

Because this proposal focuses on hardening FeesaSwap’s infrastructure rather than funding partner rollouts, our success criteria are centered on a reliable, observable, and clearly usable mainnet platform that is ready for wallets and dApps to adopt.

1. Proven mainnet behavior (on-chain metrics)

We will measure:

• Number of successful ADA-less transactions executed through the FeesaSwap/Pisa contract over the funding period via feesaswap.io.
• Total ADA-equivalent fee volume paid in non-ADA tokens.

The goal is not high volume yet, but consistent, repeatable success of ADA-less flows on mainnet under real conditions. Even modest usage will demonstrate correctness and economic viability.

2. Collateral and fee “unblocking”

Where the collateral bot is active, we will track the failure rate due to missing collateral or fees on transactions initiated via FeesaSwap, with a target of driving this close to zero.

This demonstrates that we are actively removing the two common blockers we are aiming at, ADA for fees and collateral UTxOs.

3. Reliability and observability of the backend

From the infra side, success means FeesaSwap is safe to integrate:

• Uptime of core services (API/backend/indexer) with a target of production-grade availability.
• Proper telemetry coverage with all relevant major components emitting metrics into Prometheus/Grafana.
• Low error rates for fee quotes and transaction construction, monitored and visible via dashboards.

Overall, by the end of our Fund15 scope, a realistic and meaningful definition of success is:

“FeesaSwap is a live, observable, and stable mainnet service at feesaswap.io, with successfully executed ADA-less transactions, working collateral provisioning, and a monitored, well-instrumented backend that is ready for direct wallet and dApp integrations in subsequent phases.”

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

As Cardano grows, more new users are entering the ecosystem with non-ADA native tokens as their first touchpoint. These users are immediately confronted with a significant chore: they must onboard with an exchange, undergo invasive KYC, possibly migrate tokens, and so on before they can interact meaningfully in the ecosystem. This needless friction lowers onboarding rates and reduces monthly transaction volume on Cardano.

FeesaSwap delivers a live, mainnet platform for decentralized fee trading on Cardano. It allows users to pay transaction fees directly in supported tokens they already hold, while FeesaSwap sources ADA and collateral as needed behind the scenes via the underlying smart contract and backend infrastructure.

This represents an important and profound upgrade for UX on Cardano. New users will no longer need to preload ADA, dramatically reducing friction at critical touchpoints such as DEX swaps, bridges, mints, and games.

As such, Feesaswap specifically addresses the kind of “gas token first” hurdle that UX and account-abstraction research consistently identifies as a major cause of user drop-off in Web3 onboarding flows. On Cardano specifically, ledger-level concepts like Babel Fees have long framed paying fees in native tokens as a desirable goal, but they have not yet landed as a production ledger feature; FeesaSwap instead delivers this behavior today at the smart-contract and infrastructure layer, and with this Fund15 proposal we focus on making it a dependable, integration-ready component that Cardano wallets and dApps can safely build on.

[Your Project and Solution] Impact

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

In this proposal, we focus on turning FeesaSwap into a wallet- and dApp-ready infrastructure layer that others can depend on. We will harden the backend with dedicated safety tooling, oracle-backed pricing, a production Cardano node, and full observability (Prometheus/Grafana and telemetry across all core services). The live interface at feesaswap.io will remain the primary demonstration point for ADA-less transactions, but the true outcome is a stable, well-instrumented service that any integrator can plug into. This brings Cardano in line with the broader industry shift toward gas abstraction and multi-token fee payments, while preserving Cardano’s existing ledger and node infrastructure.

Finally, our Fund15 work will put FeesaSwap in a production-ready state for integrations, most notably wallet adoption. While this is not the finish line, this outcome will put one-click, ADA-less transactions within reach for all users for tokens with established LP positions in FeesaSwap, representing an industry-leading and impactfully streamlined user experience.

[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?

FeesaSwap is being developed and maintained by MLabs, a team with a multi-year track record of delivering complex Cardano infrastructure and DeFi projects (including Plutus tooling, on-chain protocols, and prior Catalyst-funded work). Our existing FeesaSwap deployment is already live on mainnet, which demonstrates the technical feasibility of ADA-less fees in practice; this proposal focuses on hardening and scaling that system as well as integrating oracle-based pricing.

To ensure fund management, we have created transparent budgeting and milestone-based funding releases. Work is broken down into clear technical milestones (safety tooling, node and database operations, telemetry, and monitoring), and our progress will be open to Catalyst reviewers and fund operators. We are dedicated to upholding the trust of the Cardano community and delivering impactful results.

On the technical side, our developers apply multiple layers of testing suites and demonstrations written by our developers who have profound experience building on Cardano. Having FeesaSwap externally audited through CertiK, we can ensure that the final product is a secure and safe environment for all users of the contract.

[Milestones] Project Milestones

Milestone Title

Price Oracle, Collateral Automation & Runtime Monitoring

Milestone Outputs

1. Identify external exchange rate APIs to use for source of truth
2. Implement query layer for gathering exchange rate data
3. Implement auto price update support for common Cardano native tokens
4. Implement auto update hook based on price delta
5. Implement a bot that supplies ADA collateral for wallets without collateral

Acceptance Criteria

1. Design document noting which external exchange rate APIs we’ll be using
2. Functions exist that can query these exchange rate APIs to obtain price data
3. Bot is able to automatically update exchange rate in a UTxO based on price data
4. Bot is able to detect when to run the exchange rate update transaction (whenever price difference is big enough)
5. Collateral bot is able to supply collateral to feesaswap transactions

Evidence of Completion

1. Link to design document noting external exchange rate APIs to use
2. Test cases for query functions that show we can obtain pricing data for a few common tokens
3. Link to transaction submitted by the bot that updates exchange rate of FeesaSwap UTxO based on pricing data
4. Link to transaction that was triggered by the bot when the price delta was significant
5. Link to transaction that used a collateral supplied by the bot and not the user

Delivery Month

1

Cost

39960

Progress

20 %

Milestone Title

Safety Bot & Off-chain Instrumentation

Milestone Outputs

1. Production safety tool development (Liquidation Bot) for LP protection
2. Liquidation bot deployment to preprod and testing environment
3. Instrument off-chain code
4. Instrument bots for monitoring and alerts

Acceptance Criteria

1. Liquidation bot is able to detect risky events and liquidate UTxOs as needed
2. Liquidation bot works on preprod and builds transactions
3. Off-chain code prints logs and traces regarding actions taken during execution
4. Bot prints logs and traces regarding its actions during execution

Evidence of Completion

1. Liquidation bot code is available alongside a test case showcasing detection of fundamental events and liquidation transactions
2. Link to liquidation transactions submitted to preprod by the bot
3. File containing logs generated during off-chain runtime
4. File containing logs generated during bot runtime

Delivery Month

2

Cost

49950

Progress

40 %

Milestone Title

Demo & Indexer Telemetry + Prometheus Foundation

Milestone Outputs

1. Instrument demo server for basic usage and error visibility
2. Instrument indexer for data, performance, and error tracking
3. Figure out initial Prometheus setup or OpenTelemetry collector → Prometheus for metrics collection
4. Deploy Prometheus to host

Acceptance Criteria

1. Demo server logs and traces requests, actions taken during handling it, and exceptional responses during execution
2. Indexer logs block indexing progress, parsing status, and major actions taken during indexing
3. Design documentation containing planned setup of Prometheus
4. Prometheus dashboard showcasing monitored events

Evidence of Completion

1. File containing logs generated during demo server runtime
2. File containing logs generated during indexer runtime
3. Link to design documentation for planned Prometheus setup
4. Video Evidence showcasing Prometheus dashboard

Delivery Month

3

Cost

39960

Progress

60 %

Milestone Title

Telemetry Pipeline & Dashboards

Milestone Outputs

1. Set up telemetry collection from instrumented code across all core services for reliable, queryable metrics
2. Deploy and configure Grafana telemetry UI for clear, real-time dashboards and visual monitoring of system health

Acceptance Criteria

1. Code is able to collect telemetry logs and traces from bots, demo server, and indexer, and make them available to our monitoring stack
2. Grafana UI is set up and shows this telemetry data in a simple, readable way

Evidence of Completion

1. Test case showcasing ability to collect and process logs and traces into Grafana compatible telemetry data
2. Video Evidence showcasing Grafana UI

Delivery Month

4

Cost

35074

Progress

80 %

Milestone Title

Core Node & Database Reliability

Milestone Outputs

1. Deploy Cardano node via Demeter or Cardanow to support FeesaSwap indexing and backend operations
2. Database monitoring and migration setup for reliability over time
3. Advanced testing for SQL layer, covering edge cases to ensure correctness

Acceptance Criteria

1. Cardano-node is set up and the off-chain code can reliably query it for normal operations
2. Database is set up and the offchain code can query it
3. SQL helper functions are tested to ensure edge cases behave correctly

Evidence of Completion

1. Off chain code can connect to cardano-node
2. Off chain code can query database using the expected schema
3. Test cases exist covering several edge cases as well as happy path conditions for the SQL schemas

Delivery Month

6

Cost

29970

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Budget/cost breakdown:

MILESTONE 1

Identify external exchange rate APIs to use for source of truth 20.50

Implement query layer for gathering exchange rate data 25.50

Implement auto price update support for common Cardano native tokens 20.50

Implement auto update hook based on price delta 31.50

Implement a bot that supplies ADA collateral for wallets without collateral 30.50

TOTAL 128.50

MILESTONE 2

Production safety tool development (Liquidation Bot) 93.0 hours

Liquidation bot deployment to preprod and testing 19.5

Instrument off-chain code 62.0

Instrument bots 23.5

TOTAL 198.0

MILESTONE 3

Instrument demo server 31.0

Instrument indexer 31.0

Initial Prometheus setup or OpenTelemetry collector → Prometheus 75.00

Deploy Prometheus to host 19.5

TOTAL 156.5

MILESTONE 4

Set up telemetry collection from instrumented code 62.0

Deploy and configure Grafana telemetry UI 74.0

TOTAL 136.0

MILESTONE FINAL

Deploy Cardano node via Demeter or Cardanow 74.5

Database monitoring and migration setup 36.0

Advanced testing for SQL layer 28.50

TOTAL 139.0

Subtotal: 758 hours @ 90 USD/hour = 68,220 USD

Total (@ rate $0.35 USD / ADA): 194,914 ADA

_In the interest of full transparency, please note we have applied a conservative USD/ADA exchange rate in pricing this proposal. This is to ensure our operations remain stable regardless of market conditions. Although we firmly believe the future of Cardano is bright, we recognize the price of ADA and all cryptocurrencies is inherently volatile. Our financial obligations are denominated in fiat. Most importantly, this includes the salary of our engineers whose hard work makes projects like this possible. _

_In the unlikely scenario of severe negative price movement beyond our forecasted rate, it is possible that MLabs may need to temporarily suspend work on this proposal until the market recovers. Rest assured, this decision would be made solely to protect our business's long-term viability and never taken lightly. _

We appreciate your understanding and support, and we are excited to see what we can achieve together.

[Final Pitch] Value for Money

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

Feesaswap is a live protocol on Cardano mainnet that enables fee payments in non-ADA tokens. This significantly improves user experience by reducing friction for both users and dApps. Unlike conceptual approaches such as Babel Fees which has yet to be implemented, our solution is production-ready and usable today. Developers can integrate seamlessly through provided APIs, SDKs, and a web frontend, with an open architecture that supports interoperability and composability across Cardano applications. By simplifying onboarding and allowing users to transact without ADA, Feesaswap lowers barriers to entry, attracts new users, and drives greater transaction volume. With this next round, we aim to scale integrations, integrate oracle-based pricing, and grow adoption across the ecosystem.

[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