Last updated 3 months ago
Surf V1 showed demand for CNT lending, but lacks dynamic rates, intuitive time-based yield for lenders, and flexible position management tools. Surf V2 delivers these essential upgrades.
Surf V2 introduces multi-collateral AMM pools, dynamic interest rates, continuous yield accrual, and advanced position controls to deliver a robust next-generation lending protocol.
Please provide your proposal title
Surf V2 - Open Source Lending Pools
Enter the amount of funding you are requesting in ADA
200000
Please specify how many months you expect your project to last
8
Please indicate if your proposal has been auto-translated
No
Original Language
en
What is the problem you want to solve?
Surf V1 showed demand for CNT lending, but lacks dynamic rates, intuitive time-based yield for lenders, and flexible position management tools. Surf V2 delivers these essential upgrades.
Supporting links
Does your project have any dependencies on other organizations, technical or otherwise?
No
Describe any dependencies or write 'No dependencies'
No dependencies
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.
MIT License
Please choose the most relevant theme and tag related to the outcomes of your proposal
Lending
Describe what makes your idea innovative compared to what has been previously launched in the market (whether by you or others).
Surf V2 expands on the success of Surf V1 by introducing features the Cardano ecosystem does not yet have: open-source multi-collateral lending pools, fully dynamic interest rates, and continuous time-based interest accrual for lenders. These upgrades build on what users already value - simple, efficient CNT-backed borrowing, and take it to the next level.
By supporting multiple collateral types in a single pool, Surf V2 unlocks more flexible borrowing options and enables deeper liquidity. Dynamic interest rates ensure that supply and demand stay in balance, allowing lenders to earn fair, predictable returns while borrowers access credit at sustainable rates. Combined with continuous interest accrual, capital becomes more productive and the system behaves in a way users intuitively expect.
These improvements make Cardano’s DeFi more efficient: value circulates instead of sitting idle, liquidity becomes easier to source, and borrowing markets become more resilient. As usage grows, other ecosystem components, like DEXs, stablecoins, staking protocols, wallets, and aggregators, all benefit from a more active and reliable lending layer.
Because Surf V2 is fully open source, it provides infrastructure that others can extend, integrate, or build on top of. This democratizes the creation of new lending markets and encourages experimentation across the ecosystem. In this way, Surf V2 is not just a product upgrade but a foundational piece of shared infrastructure that strengthens Cardano’s DeFi at large.
Describe what your prototype or MVP will demonstrate, and where it can be accessed.
Our MVP will demonstrate the core mechanics of Surf V2 and show that the upgraded lending and borrowing flows can operate securely, efficiently, and transparently on Cardano. It will validate the essential features that expand upon Surf V1 and form the foundation for the full V2 release.
The MVP will include:
Multi-collateral lending pools
Users will be able to supply multiple Cardano native assets as collateral within a single lending pool. This proves the protocol can support more flexible borrowing and deeper liquidity.
Dynamic interest rate model
Interest rates for suppliers and borrowers will adjust automatically based on real-time utilization. The MVP will show how rates respond to supply and demand, ensuring more efficient and stable markets.
Enhanced position management
Users will be able to add or remove collateral, increase or decrease borrow amounts, and perform partial repayments. These improvements address the limitations in Surf V1 and give users finer control over their positions.
Time-based interest accrual for lenders
The MVP will demonstrate continuous, utilization-driven growth of lender share value. Instead of interest only updating when borrowers repay, supply tokens will accrue value over time in a predictable and transparent way.
Secure lending + borrowing flows with transparent logic
All actions, including supplying, borrowing, repaying, withdrawals, and liquidations, will operate through fully open-source Aiken smart contracts. This ensures a trustless and verifiable user experience.
Open and modular architecture
By making these components public and modular, the MVP shows that Surf V2 can support additional markets, integrations, and community-driven extensions.
The MVP will be publicly available in our GitHub repository for anyone to test, review, and build upon.
Describe realistic measures of success, ideally with on-chain metrics.
Surf V1 reached over 15M ADA in TVL with limited functionality and an event-based interest model. Surf V2 removes many of these limitations, so a realistic and measurable target is to grow toward 50M ADA TVL within a reasonable timeframe after launch.
Key improvements in V2 directly support this:
V2 introduces multi-collateral pools, dynamic interest rates, and full position management (add/remove collateral, partial repayments, repay with collateral).
These changes make borrowing and supplying smoother and more capital-efficient, which typically leads to higher utilization and deeper liquidity.
On-chain metrics:
Moving from event-based to time-based interest accrual makes lender returns predictable and transparent. This encourages more stable liquidity, especially from larger depositors and integrations.
On-chain metrics:
Open-source, modular architecture
Surf V2 is fully open source and structured so others can audit, integrate, extend, or build markets on top of it.
This increases trust and makes Surf a shared piece of Cardano infrastructure rather than just a standalone dApp.
On-chain metrics:
With more intuitive borrowing flows, decentralized liquidations, and expanded asset support, Surf V2 strengthens its role as Cardano’s main CNT-backed borrowing platform.
On-chain metrics:
Overall success target: 50M ADA TVL
Given Surf V1’s rapid adoption and the structural improvements in V2, reaching 50M ADA TVL is a realistic and achievable milestone.
Please describe your proposed solution and how it addresses the problem
Surf V2 is a major upgrade that improves Surf V1 in every key area while maintaining the simplicity and isolated-pool architecture that users already love.
Surf V2 delivers:
Surf V2 expands isolated pools to support multiple collateral types, unlocking more efficient capital use and enabling richer markets.
This upgrade allows borrowers to combine collateral types, improves liquidity depth, and makes the protocol more flexible for future integrations.
Surf V1 fixes the borrow rate when a loan is opened.
Surf V2 moves to fully dynamic utilization-based interest, updating continuously as supply and demand shift.
Benefits:
Borrowers receive fair, real-time pricing.
Lenders earn rates that accurately reflect pool usage.
Pools balance themselves automatically.
Surf V2 gives users full control of their loan positions in a simple, intuitive interface.
Borrowers will be able to:
Add collateral
Remove collateral
Increase or decrease borrow amount (partial repayment)
Repay with collateral (partial or full)
These upgrades make Surf more flexible and support real DeFi use cases.
Surf V1 uses event-based interest, where lenders see returns only when borrowers repay or are liquidated. This leads to non-linear, irregular yield and unintuitive timing.
Surf V2 introduces continuous, time-based interest accrual, similar to Aave and Compound on Ethereum:
Lender share value increases smoothly over time.
Rewards become proportional to duration of participation.
Late joiners can no longer claim the same share as early ones.
The pool always reflects the true accumulated interest.
This is one of the biggest improvements and significantly increases fairness and capital efficiency.
Surf V2 will allow anyone to create an isolated pool by paying a listing fee.
Creators may optionally earn a percentage of interest generated in the pool.
This:
Democratizes market creation
Encourages experimentation and innovation
Enables projects to create their own markets natively on Surf
Expands Surf’s reach without central bottlenecks
To strengthen protocol resilience, Surf V2 will introduce several decentralization improvements over time, including:
Opening liquidation execution to the public
Opening batcher access (direct trustless interaction with contracts)
These enhancements reduce reliance on trusted roles and improve transparency for all users.
Please define the positive impact your project will have on the wider Cardano community
Surf V1 has already shown how much demand there is for CNT-based lending, quickly becoming one of the most used borrowing platforms on Cardano. Surf V2 builds on this momentum by expanding the protocol into a fully open-source, more flexible, and more efficient lending layer that the entire ecosystem can benefit from.
By introducing multi-collateral markets, dynamic interest rates, continuous lender accrual, and better position management, Surf V2 makes capital on Cardano work more efficiently. Liquidity adjusts naturally to supply and demand, lenders receive fairer and more predictable returns, and borrowers gain safer and more flexible credit tools.
The impact extends well beyond Surf itself. A transparent and modular lending foundation strengthens every part of Cardano DeFi: DEXs benefit from deeper liquidity, stablecoins gain more utility, yield strategies become more sophisticated, and developers gain a base they can build on, fork, extend, or integrate with. Open-source lending infrastructure invites experimentation and helps accelerate innovation across the ecosystem.
With Surf V2, Cardano gets a stronger, more connected, and more scalable financial layer, one capable of supporting new users, community markets, and future institutional integrations.
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?
The Surf team has already demonstrated it can deliver complex DeFi products quickly and safely.
We have a strong record of shipping:
Surf V1 launched to mainnet in under 6 months
Fully open-sourced smart contracts
Successful public testnet
Two smart contract audits
Rapid feature delivery (e.g., one-click leverage feature shipped in 5 weeks, repay with collateral shipped in 2 weeks)
Steady TVL growth to 15M+ ADA within ~60 days
The same core team is building Surf V2:
1 frontend engineer
2 backend engineers
1 smart contract engineer
1 QA engineer
1 project manager
Milestone Title
Protocol & Architecture Design
Milestone Outputs
Deliverables: Finalized specifications for multicollateral lending pools, dynamic interest rate models, and time-based yield accrual
Outputs: Protocol documentation, UTxO flow diagrams, risk parameters, and rate models.
Acceptance Criteria
A finalized design document is published, reviewed by the team, and confirmed as technically feasible. All lending, borrowing, and liquidation flows must be defined end-to-end with no gaps before implementation begins.
Evidence of Completion
All design documentation and draft contract interfaces published in Surf’s public GitHub repository.
Delivery Month
1
Cost
20000
Progress
10 %
Milestone Title
Smart Contract Development
Milestone Outputs
Core Aiken contracts implementing lending, borrowing, position management, liquidations, and fee distribution. The codebase will include detailed inline documentation, reference scripts for transaction building, and clear interfaces for off-chain components to connect seamlessly with the contracts.
Acceptance Criteria
Contracts compile successfully, pass all unit tests, and demonstrate stable execution of core functions including supply, borrow, repay, withdraw, and liquidation. Peer reviews must confirm the code is secure, efficient, and functional.
Evidence of Completion
Evidence of completion will be if the smart contracts are available in the surf github which is publicly available.
Delivery Month
2
Cost
60000
Progress
30 %
Milestone Title
Off-Chain Code Development
Milestone Outputs
Off-chain code responsible for coordinating transactions between users and smart contracts, including the matcher/relayer logic for orders, collateral checks, and liquidation triggers. A functional frontend dApp will be delivered, enabling users to interact with Surf V2 directly to supply assets, borrow against collateral, repay loans, and withdraw liquidity.
Acceptance Criteria
End-to-end interaction between off-chain code, frontend, and smart contracts works reliably. A user must be able to deposit collateral, borrow assets, repay debt, and withdraw liquidity in a controlled environment. Internal stress tests confirm liquidation logic behaves as designed.
Evidence of Completion
Off-chain services and dApp frontend code published and maintained in Surf’s public GitHub repository.
Delivery Month
2
Cost
60000
Progress
30 %
Milestone Title
Public Testnet
Milestone Outputs
Deployment of Surf V2 to the Cardano testnet, with at least one live lending pool (e.g., ADA and a stablecoin). All core functions will be enabled, allowing real users to deposit, borrow, repay, and liquidate positions in a public environment.
Acceptance Criteria
Testnet users can successfully interact with all major protocol functions. Liquidation events must trigger automatically under expected conditions. Community feedback will be collected and logged for improvements before mainnet deployment.
Evidence of Completion
Public testnet deployment, contracts, and supporting code made available in Surf’s GitHub repository.
Delivery Month
2
Cost
40000
Progress
20 %
Milestone Title
Mainnet Launch
Milestone Outputs
Deliverables: Final audit, production deployment. We will deploy Surf V2 to Cardano mainnet. Prior to launch to mainnet we will conduct an audit that we will pay for out of pocket. Surf V2 will launch with multi-collateral and dynamic interest rates.
Acceptance Criteria
Acceptance Criteria:
Surf Lending V2 contracts and dApp deployed on Cardano mainnet.
We will pay for the audit out of pocket. Surf V2 will be launched with multi-collateral and dynamic interest rates.
Evidence of Completion
Evidence of completion will be our tweet saying Surf V2 is now live along with sharing the github and dapp link.
Delivery Month
1
Cost
20000
Progress
10 %
Please provide a cost breakdown of the proposed work and resources
We are requesting ₳200,000 to support a streamlined but fully capable Surf V2 development team over an eight-month build cycle. This budget is allocated entirely to salaries, ensuring every ADA directly funds engineering, testing, and delivery of the upgraded protocol. The team structure remains the same as our original plan, but each role operates on a reduced-rate model to make the initiative feasible within this tighter budget.
The team includes:
1x frontend engineer
2x backend engineers
1x smart contract developer
1x QA engineer
1x project manager
The frontend engineer will develop the user-facing dApp experience, including wallet connectivity, updated lending dashboards, collateral flows, and a simplified UX suitable for both desktop and mobile. Their work ensures Surf V2 feels intuitive, polished, and easy for users inside and outside of Cardano.
The smart contract developer will design and implement the Aiken contracts that power isolated pools, dynamic interest mechanics, and liquidation safeguards. They will work tightly with backend and QA roles to ensure correctness, determinism, and reliability.
The two backend engineers will maintain responsibility for the matcher, relayer, and off-chain services that coordinate transactions, manage collateral, and handle liquidation processing. Their work ensures the protocol is fast, stable, and integrates cleanly with other Cardano DeFi platforms.
The QA engineer will build automated tests, run simulations, conduct determinism checks, and stress-test critical components. Their focus is catching issues early and guaranteeing Surf V2 performs predictably at scale.
The project manager coordinates work across all roles, maintains the development schedule, facilitates communication, and ensures timely milestone delivery for Catalyst and the community.
With a combined 48 person-months of work compressed into a more efficient cost structure, this budget averages roughly ₳4,150 per person per month. Every ADA is directed toward development, with no marketing, operations, or administrative overhead. This lean allocation allows us to ship Surf V2 with the same rigor, but at a more efficient cost, ensuring high accountability and maximizing the impact per ADA invested.
By supporting this proposal, Catalyst directly funds the engineering required to ship Surf V2 — a major upgrade that strengthens Cardano DeFi with open-source code, transparent mechanics, and a lending protocol designed to compete at a global standard.
How does the cost of the project represent value for the Cardano ecosystem?
Surf has quickly become the fastest-growing dApp on Cardano, reaching over 15 million ADA in TVL within just 60 days of launch. The next set of features in Surf V2 are designed to significantly expand this growth, with the potential to help attract the next 100 million ADA in TVL to the ecosystem. This represents a direct increase in liquidity, user adoption, and overall activity on Cardano, creating lasting value for the entire community.
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
I Agree
Yes
Surf is backed by a seasoned global team of over six developers and project managers with a strong track record of delivery on Cardano, having successfully built and launched Surf V1 from the ground up to mainnet in less than 6 months: including 2 smart contract audits, a public testnet, and open sourcing our smart contracts.