Decentralized Stablecoin Protocol On Midnight

[Proposal setup] Proposal title

Please provide your proposal title

Decentralized Stablecoin Protocol On Midnight

[Proposal Summary] Time

Please specify how many months you expect your project to last

3

[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?

We are solving the problem of instability and reliance on centralized stablecoins in DeFi which hinders timely access to liquidity, trading, and payments across the ecosystem.

[Proposal Summary] Supporting Documentation

Supporting links

• https://github.com/statera-protocol/statera-protocol-midnight

[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 here more information on the open source status of your project outputs

All project outputs will be fully open sourced under the MIT Licence

[Theme Selection] Theme

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

Stablecoin

[Campaign Category] Category Questions

What is useful about your DApp within one of the specified industry or enterprise verticals?

We are building to enhance DeFi on Midnight by providing a robust stablecoin issuing dApp and notably enriching the developer ecosystem with our robust, automated liquidation BOT system that is native to Midnight but generic to all CDP protocols liquidation systems. With our liquidation system, other DeFi protocols on Midnight can simply plug into their dapp by with the required parameters and perform liquidations automatically. This also allows offering liquidation as a service where institutions and individuals can deploy capital and perform liquidations across multiple DeFi protocols in the Midnight ecosystem.

What exactly will you build? List the Compact contract(s) and key functions/proofs, the demo UI flow, Lace (Midnight) wallet integration, and your basic test plan.

The protocol is a full fledged DeFi protocol that allow users to deposit assets and mint a native stablecoin without revealing users' details such as wallet address, deposited collateral amount, amount minted etc, all while been compliant. This product has many dependent functionalities/smart contracts. Also worthy of mention that some of this circuits are already developed, tested, integrated with the UI, deployed on testnet, and hosted on AWS (http://statera-dapp.s3-website.eu-north-1.amazonaws.com/ ). This proposal is to build the remaining circuits and provide extensible liquidation standard that can be used across DeFi protocols on Midnight.

1. Depositors' interactions (Circuits involved)

• depositCollateral(kyc_token, collateral_asset, collateral_quantity): This circuit allows deposit of collateral into the protocol after verifying the user's KYC token
• mintSUSD: Allow users to mint the stablecoin
• repay(): Allow users to repay debt
• withdrawCollateral(): Allow users to withdraw collateral.

1. Stakers' Interactions (Circuits involved)

• stake(): Stake sUSD to provide liquidity for liquidations
• unstake(): Unstake sUSD and rewards
• checkStakeReward(): Check accumulated rewards
• withdrawStake(): Withdraw staked assets to wallet

1. Admin Interactions (Circuits involved)

addNewAdmin(): Add protocol facilitator

removeAdmin(): Remove facilitator

setSUSDTokenType(): Set allowed collateral asset

1. Liquidator Interaction (Circuits involved)

• LiquidatePosition (): This is callable by a backend server/liquidator API (after a proof of an undercollateralized position is received/detected) to liquidate undercollateralized positions.

DEMO UI FLOW

1. Connect wallet
2. Go to to the collateral dashboard
3. Deposit collaterall
4. Mint sUSD against deposited collateral (Your mint capacity will be displayed on the ui)
5. Deposit/stake to stability/liquidation pool.
6. Unstake from liquidation pool

How will other developers learn from and reuse your repo? Describe repo structure, README contents, docs/tutorials, test instructions, and extension points. Which developer personas benefit, and how will you gauge impact (forks, stars, issues, remixes)?

Our codebase/repo is a monorepo that teaches developers how to build complex DeFi applications with extensible components while protecting users' privacy. It also showcases how to manage smart contract assets based on the midnight's account model design. Our code is properly commented/documented in-line to improve readability and spell intent on the go.

The README file contains information and guide on how to install compactc compiler, Lace wallet setup, test token aquisation, and all pre-requisites to setup the Midnight developer environment and test instructions to run our dapp locally.

Our repository benefit DeFi-heavy/DApp developers and integrators. We also strive to attract new users through our readme file by providing all the prerequisites to setup the developer environment (in a single file).

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

The solution addresses the problem of instability, confidentiality, and liquidity retention in DeFi by allowing users to provide liquidity as collateral and based on the value of the collateral, users will be able to mint the protocol's native stablecoin. This minted stablecoin will be integrated with other DeFi protocols within the ecosystem for more composability and capital efficiency. All this will be possible without exposing users financial details/information, thereby preserving privacy in DeFi.

[Your Project and Solution] Impact

Please define the positive impact your project will have on Midnight ecosystem

Building this project on Midnight extends the value of the broader Midnight ecosystem by addressing the many of DeFi’s biggest gaps: instability, Liquidity retention, capital efficiency and privacy. Many blockchain networks are known for their security and scalability, but operates on a transparent/open ledger where financial details can be traced. By introducing a native, privacy-focused stablecoin protocol on Midnight, we complement Midnight's strength with financial confidentiality, which many users and institutions see as essential for wider adoption. The stablecoin also deepens liquidity across the ecosystem, since it can circulate between Midnight, Cardano, and many other blockchains through interoperability. This creates a stronger bridge between open, transparent DeFi on other chains and private, confidential DeFi on Midnight. Ultimately, it enhances Midnight’s competitiveness by offering both compliance-ready transparency where needed and user-controlled privacy where required, making the ecosystem more attractive to builders, liquidity providers, and enterprise use cases.

[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 brings together fullstack developers, smart contract engineers, dApp architects, and seasoned project managers. We already have a live testnet (With smart contracts written in Compact) with the following core features: collateral deposits, stablecoin minting, repayment, and staking (Testnet link live on http://statera-dapps3-website.eu-north-1.amazonaws.com/ ), we have participated and won multiple Midnight's technical hackathons. Alongside the above, we are actively building with multiple teams and projects on both Cardano and Midnight. Notably, we are currently working with Fluidtokens as the core compact developers for their P2P lending dApp on Midnight, showing not just technical expertise but also consistent delivery. This track record highlights our ability to execute complex ideas and proves the proposed project is both realistic and achievable.

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

1. Milestone 1: Smart contract (circuits) development (deposit, minting stablecoin, staking, repayment, withdrawal, liquidation) and testing all functionalities on CLI. This milestone will utilize the services of 2 smart contract developers and the dApp architect for end to end product architecture design and core business logic development for 1 month = 4,000 USDM.
2. Milestone 2: UI integration and wallet connect for seamless testing. This will utilize the services of 2 fullstack developers for 1.5 Months = 4,000 USDM
3. Milestone 3: Testnet deployment and Alpha testnet release for select community of testers pre-audit, creation of a feedback collection plan. This will require the whole team to test the product end-to-end before inviting external testers for the rest 0.5 month = 2,000 USDM

[Final Pitch] Value for Money

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

The project brings long-term value to the Midnight network as an ecosystem enhancer and community enabler by strengthening DeFi with a native, decentralized, privacy-preserving stablecoin. It provides reliable liquidity, stability, reduces reliance on centralized alternatives, and opens the door for wider adoption by both retail and institutional users. The stablecoin’s integration across DeFi protocols enhances capital efficiency and liquidity retention within the Midnight ecosystem, while the team’s proven track record ensures delivery. This creates a sustainable growth, utility, and greater economic activity within the Midnight ecosystem.

Our liquidation mechanism is modeled to allow other protocols to re-use our system for liquidations. This is a tailored solution that allow developers to plug and play, reducing developer journey in building liquidation system/BOTs in the future.

[Self-Assessment] Self-Assessment Checklist

I confirm that the proposal clearly provides a basic prototype reference application for one of the areas of interest.

Yes

I confirm that the proposal clearly defines which part of the developer journey it improves and how it makes building on Midnight easier and more productive.

Yes

I confirm that the proposal explicitly states the chosen permissive open-source license (e.g., MIT, Apache 2.0) and commits to a public code repository.

Yes

I confirm that the team provides evidence of their technical ability and experience in creating developer tools or high-quality technical content (e.g., GitHub, portfolio).

Yes

I confirm that a plan for creating and maintaining clear, comprehensive documentation is a core part of the proposal's scope.

Yes

I confirm that the budget and timeline (3 months) are realistic for delivering the proposed tool or resource.

Yes

[Required Acknowledgements] Consent & Confirmation

I Agree

Yes