Midnight ZKP Identity Framework

[Proposal setup] Proposal title

Please provide your proposal title

Midnight ZKP Identity Framework

[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?

Regulated institutions face slow, costly, fragmented KYC that repeats work, harms UX, raises AML risk and erodes privacy. Current centralized, siloed systems block reusable identities.

[Proposal Summary] Supporting Documentation

Supporting links

• https://kasss.vercel.app/

[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

We will release all smart contracts, ZK circuits, SDKs, and demo UI under the Apache 2.0 License. This permissive license allows adoption, modification, and enterprise use while ensuring patent protection. Code, docs, and tutorials will be public on GitHub, fostering contributions, forks, and remixes. Open-source outputs create a reusable reference for the Midnight ecosystem, accelerating privacy-first ZK development and adoption.

[Theme Selection] Theme

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

Identity & Verification

[Campaign Category] Category Questions

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

Usefulness of the ZKP Module DApp (Midnight PoC)

Industry / Enterprise Vertical: Compliance and Regulated Finance (KYC / AML), Crypto Exchanges, Fintechs, Digital Wallets.

Core Usefulness

• Enables selective disclosure of identity data (age, jurisdiction, risk flags, account validity) without exposing raw personal data.

• Reduces compliance and onboarding friction by allowing institutions to verify user credentials securely on Midnight.

• Provides privacy-preserving proofs for regulated institutions and auditors.

• Open-source, modular Compact contracts allow integration with existing identity pipelines (KYC/AML APIs) and future Cardano Catalyst projects.

• Demonstrates privacy-first building blocks for developers in regulated fintech and crypto verticals.

Technical Details / Architecture

Architecture Overview

User App (Browser/Mobile)

→ Upload encrypted documents (AES-256)

→ Client-side Compact encryption

→ Generate ZK proof (Compact ZK circuits)

→ Proof verification on Midnight chain

→ Institution verifier reads proof (no PII)

File / API Structure

/zk-circuits/ → Contains Compact circuits: KYCProof, AgeProof, CountryProof, RiskProof

/sdk/ → JS/TS SDK (generateProof(), verifyProof(), selectiveDisclosure())

/demo/ → Minimal DApp:

   Step 1: Upload encrypted document

   Step 2: Select proof type

   Step 3: Generate ZK proof

   Step 4: Submit to verifier (Midnight chain)

Test Commands

npm run test:zk   → Run unit tests for circuits

npm run demo      → Start demo DApp locally

Key Proofs Implemented

• Proof-of-KYC: Binary yes/no for verified identity

• Proof-of-Age: Confirms legal age without showing DOB

• Proof-of-Country: Confirms user jurisdiction without revealing address

• Proof-of-Risk-Level: Confirms AML risk flag without revealing underlying data

3-Month Milestones (With Evidence Aligned to Deliverables)

Month 1: Foundations

Deliverables:

• Compact ZK circuits skeleton (KYC, Age, Country, Risk)

• Initial SDK functions for proof generation

Acceptance Criteria:

• Circuits compile and generate basic proof outputs

• SDK functions return valid proof objects

Evidence:

• Unit test results demonstrating circuit compilation and proof output

• Local sandbox demo showing proof generation working end-to-end

Month 2: Integration & Selective Disclosure

Deliverables:

• Integrate circuits with selective disclosure library

• Client-side encryption + proof generation pipeline

• Minimal DApp flow for document upload → proof generation

Acceptance Criteria:

• User can generate ZK proof without exposing PII

• Proof verified successfully on Midnight testnet

Evidence:

• Demo DApp walkthrough video showing document upload and proof creation

• Testnet verification logs confirming proof validity on-chain

Month 3: Demo & Pilot PoC

Deliverables:

• Full demo: upload → proof → verification

• API endpoints for institutional verifiers

• Documentation + open-source code release

Acceptance Criteria:

• Successful verification on Midnight chain end-to-end

• SDK + DApp functional for PoC testing

Evidence:

• Public GitHub repository with working demo and documentation

• Pilot feedback from 1–2 institutional testers confirming workflow readiness

Why Midnight + Compact

• Privacy-first design: Proofs verified on Midnight without exposing PII.

• Scoped, small PoC: Perfect fit for the $10k grant.

• Novelty: First open-source Compact ZKP module for compliance proofs in fintech/crypto.

• Reusability: Forms the base layer for future KYC marketplace in a larger Cardano Catalyst project.

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.

We Will Build the Midnight ZKP Module

Compact Contracts and Key Functions / Proofs

We will implement a modular and reusable set of Compact contracts on Midnight for privacy-preserving compliance proofs.

Contracts

• KYCProof.compact → Confirms identity verification (binary yes/no)

• AgeProof.compact → Verifies user meets age requirements without revealing DOB

• CountryProof.compact → Confirms user is from an allowed region without exposing their exact location

• RiskProof.compact → Confirms AML or financial risk flags without sharing underlying data

Key SDK Functions

• generateProof(data, proofType) → Generates a ZK proof for a specific claim

• verifyProof(proof, verifierID) → Verifies proof on the Midnight chain

• selectiveDisclosure(proof, fields) → User reveals only selected fields to verifiers

• encryptData(document) → Client-side encryption before proof generation

• decryptProof(proof) → For demo/testing only (not for production)

Demo UI Flow

Step 1: User opens the demo DApp

Step 2: Upload encrypted document (PDF/JSON) using client-side AES-256 encryption

Step 3: Select proof type (KYC, Age, Country, Risk)

Step 4: Generate ZK proof using the Compact contract

Step 5: Submit proof to the institutional verifier

Step 6: Verifier confirms validity without accessing raw personal data

Step 7: Optional export of verification receipt or logs for auditors

Architecture Overview

[User DApp]

   └── [Encrypted Document]

         └── [Compact Contract Proof Generation]

                └── [Midnight Chain Proof Verification]

                       └── [Institution Verifier / Auditor]

Midnight Wallet Integration

Users sign ZK proof submissions using Lace Wallet keys for authentication and signature verification. This ensures proof authenticity, integrity, and non-repudiation without storing any sensitive personal data on-chain.

Integration points:

• signProof(proof) → Lace Wallet pop-up for proof signing

• verifySignature(signedProof) → Validates signature on the Midnight chain

Basic Test Plan

Unit Tests

• Run npm run test:zk to validate each Compact contract produces valid proof objects

• Validate that selective disclosure hides private fields correctly

Integration Tests

• Local DApp + SDK + Compact circuits tested end-to-end

  proof generation → verification → wallet signature check

• Simulate institutional verification using a test verifier endpoint

Demo / End-to-End Tests

• Full flow validation:

  document upload → proof generation → Midnight verification → wallet signature → verifier confirmation

• Ensure no personal information leaks through logs, proof payloads, or chain data

Usefulness (Pattern and Necessity)

Problem → Data Protection Pattern Mapping

• Issue: Institutions require verified identity information without exposing user data

• Pattern: Zero-Knowledge selective disclosure for KYC and compliance

Why Midnight and Compact

• Midnight enables private, compliant, on-chain proof verification

• Public blockchains expose personal information or require heavy off-chain computation

• Compact contracts are lightweight and perfect for a tightly scoped $10k Proof-of-Concept

Novelty and Ecosystem Value

• First open-source and modular ZKP compliance module for Midnight

• Creates building blocks for identity, financial, and credential-based DApps

• Supports reusable, privacy-first proofs that can expand into larger Catalyst projects

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)?

How Other Developers Will Learn From or Use Our Repo

Repo Structure

midnight-zkp-module/

│

├─ contracts/                 # Compact contracts for ZK proofs

│   ├─ KYCProof.compact

│   ├─ AgeProof.compact

│   ├─ CountryProof.compact

│   └─ RiskProof.compact

│

├─ sdk/                       # JS/TS SDK for proof generation & verification

│   ├─ generateProof.js

│   ├─ verifyProof.js

│   └─ selectiveDisclosure.js

│

├─ dapp/                      # Demo UI for end-to-end flow

│   ├─ index.html

│   ├─ app.js

│   └─ styles.css

│

├─ tests/                     # Unit & integration tests

│   ├─ zkProof.test.js

│   └─ sdkIntegration.test.js

│

├─ docs/                      # Documentation & tutorials

│   ├─ tutorial.md

│   └─ architecture.md

│

└─ README.md                  # Project overview & quickstart

README and Documentation Content

• Clear overview explaining purpose, scope, and supported proof types

• Step-by-step getting started guide: how to clone the repo, install dependencies, and run the demo DApp

• Compact contract guide describing each proof module with usage examples

• SDK API reference including test commands and example integrations

• Lace Wallet setup instructions for proof signing and verification

• Extension guide showing how to add new proofs or customize modules for specific compliance workflows

This ensures any developer can go from zero to generating their first ZK proof within minutes.

Developer Personas and Benefits

DApp Developers

• Can quickly integrate privacy-preserving identity proofs into onboarding flows

• Use cases: fintech KYC, wallet verification, NFT-gated access, regulatory compliance

ZK-curious Developers / Researchers

• Learn how selective disclosure works in Compact

• Study proof patterns, extend circuits, and experiment with new verification logic

Integrators / Enterprise Engineers

• Test how ZK proofs can replace centralized KYC or AML checks

• Connect their existing backends or KYC/AML APIs to Midnight using our SDK

This makes the repo valuable for builders at different skill levels, from beginners to advanced engineers.

Gauging Impact

• Forks and Stars → measure popularity and developer adoption

• Issues and Discussions → reflect engagement, questions, and contributions

• Remixes and Downstream Projects → show how other builders extend the ZKP module

• Tutorial usage metrics → track demo runs, SDK downloads, and documentation interactions

Goal

Create a high-quality reference ZKP module that developers can extend, remix, and deploy easily.

The repo is designed to become a foundational building block for Midnight, enabling anyone to build privacy-first compliance and identity solutions with clean architecture, clear examples, and production-ready patterns.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Across fintech, exchanges, digital onboarding platforms, and Web3 services, compliance verification has become a major pain point. Companies are required to verify user identity details such as KYC status, age, jurisdiction, or risk profile before allowing access. The challenge is that current verification systems depend on centralized data storage or publicly visible ledgers. Both approaches introduce risk.

With centralized systems, companies must store sensitive user data, increasing their liability and the cost of security. With public ledgers, any verification or credential published on-chain exposes metadata that attackers can analyze. Users do not trust platforms that hold their personal documents, and companies do not want to manage sensitive storage.

This friction slows customer onboarding, increases regulatory risk, leaks user data, and prevents large-scale adoption of digital financial systems.

Our Approach

We are building a modular Zero-Knowledge Proof (ZKP) engine on Midnight that allows companies to verify user attributes without ever seeing or storing the underlying personal information. All data remains controlled by the user, and only mathematical proofs are shared.

Using Compact contracts, the solution provides selective disclosure proofs for:

• Proof of KYC – confirms a user is fully verified without revealing any documents.
• Proof of Age – confirms a user is above or below a certain age threshold.
• Proof of Country or Region – confirms a user is allowed to use a service without exposing their exact location, ensuring only permitted regions (and not restricted ones) can access the platform.
• Proof of Risk Level – confirms the user’s risk score without sharing raw compliance data.

These proofs are small, verifiable on-chain, reusable by any ecosystem participant, and accessible through a lightweight SDK.

How Companies Will Use the Solution

When a company integrates our SDK, their verification flow becomes:

1. The user completes KYC using any provider they trust.
2. Their KYC result is turned into a sealed cryptographic credential stored privately in their Midnight wallet.
3. When using a service, the company requests a proof like “Is this user verified?” or “Is this user above 18?”
4. The wallet generates a Zero-Knowledge Proof.
5. The company verifies the proof on-chain without accessing any personal information.

The company never stores documents, never sees personal data, and never touches sensitive information. They simply verify a mathematical statement that is guaranteed to be correct.

Companies can also explain ZKP to their users through videos and simple visuals that we will provide, such as:

• “Prove it without showing it.”
• “Like showing a locked box that only opens if your data is correct.”
• “Your information stays on your device, only a mathematical yes/no proof is shared.”

This gives users confidence and gives companies a clean, low-risk compliance workflow.

A Simple Explanation of Zero-Knowledge Proofs

We will provide companies with an educational toolkit that explains ZKP in plain language:

You can prove something is true without revealing the information itself. It’s like proving you’re over 18 without showing your birthday, or proving you passed KYC without uploading documents again.

Using short animations, step-by-step graphics, and an explainer video, onboarding becomes simple, friendly, and transparent.

Why This Approach Works

Midnight is built specifically for privacy-preserving verification, making it ideal for this ZKP engine. Using Compact contracts enables:

• On-chain proof verification without exposing any personal data.
• Completely modular proofs that developers can reuse or extend.
• Compliance-ready design that regulators can audit without compromising privacy.
• Fast, lightweight integration with demo interfaces, SDKs, and clear onboarding flows.

By providing companies with privacy, trust, and clear documentation, adoption becomes frictionless.

Who This Project Engages

• Developers building privacy-first DApps or wallets
• Enterprises in fintech, crypto, payments, and neobanking
• Exchanges and KYC providers
• ZK engineers exploring selective disclosure tools
• The entire Midnight community is looking for reusable modules

Uniqueness and Benefits

• Privacy-first architecture – data never leaves user control.
• Reusable modules – builders can integrate selective disclosure instantly.
• Enterprise-ready design – ideal for companies that need regulation and privacy.
• Open-source and community-driven – encourages collaboration and forks.
• Educational toolkit – videos, graphics, and simple explanations for onboarding users.

No platform on Cardano or outside offers a general-purpose, modular, open-source ZKP verification engine with this level of accessibility.

Why This Matters to Midnight

• Demonstrates the true value of Midnight’s privacy layer.
• Provides a clear template for building regulated, privacy-protected applications.
• Accelerates onboarding for developers and enterprises.
• Strengthens Midnight’s position as the leading privacy chain for Web3 compliance and identity.
• Establishes a foundation for future ZKP innovations.

Engagement and Adoption Strategy

• Early developer workshops and GitHub discussions.
• Partnering with fintech or Web3 companies to run pilot workflows.
• Creating demos, tutorials, explainer videos, and integration guides.
• Tracking forks, stars, integrations, and interactions.

[Your Project and Solution] Impact

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

Our ZKP module will create direct, measurable, and high-value impact across the entire Midnight and Cardano ecosystem. Because it solves a real problem (privacy-preserving verification), it becomes an infrastructure that many builders can depend on.

In the first 12 months, we project the following measurable outcomes:

1. Developer Adoption & Open-Source Growth

• At least 60 to 120 developers using, testing, or integrating the module.

• 300 to 500 GitHub stars on the repository.

• 40 to 70 forks from developers creating their own versions.

• 150 to 250 issues and pull requests, which shows active engagement.

These numbers are realistic because privacy tooling and ZK libraries generally attract high developer interest when open-sourced early.

2. Midnight Wallet & DID Growth

Because this module requires DID-linked verification, we project:

• 5,000 to 10,000 new DIDs created on the Midnight ecosystem in the first year.

• 4,000+ new Midnight wallet downloads from builders, testers, and users verifying credentials.

• 3 to 5 new DApps integrating or experimenting with our selective disclosure engine.

3. Network-Level Usage

Every compliance check, credential verification, or selective disclosure generates Midnight activity.

Conservative first-year projections:

• 80,000 to 150,000 on-chain interactions triggered by:

  • credential checks

  • ZK proof verifications

  • demo usage

  • test workflows

• This means the $10,000 investment produces around 8 to 15 on-chain interactions per dollar spent, demonstrating exceptional value.

4. Ecosystem Expansion

The project will attract builders and users from:

• Fintech

• DeFi protocols

• Exchanges

• Identity and compliance startups

• AI and data-sensitive platforms

  Projected ecosystem growth:

• 1,000 to 2,500 new developers and users entering the Midnight ecosystem through the tutorials, webinars, SDK, and integrations we release.

These numbers are based on comparable identity SDK releases in other ecosystems (Polygon ID, ZK-KYC tools, Semaphore, etc.).

Impact Measurement

We will track success using both numbers and community feedback.

Quantitative Metrics (First 12 Months)

• 300–500 GitHub stars

• 40–70 forks

• 80k–150k Midnight transactions

• 5k–10k new DIDs created

• 4k+ new wallet downloads

• 150+ community testers

• 60–120 developers integrating or experimenting

Qualitative Metrics

• Developer feedback collected through surveys and GitHub discussions.

• Hackathon participation using the repo.

• Integration interest from fintech startups and compliance tools.

• Testimonials about ease of use, privacy protection, and developer experience.

Sharing Outputs and Opportunities

To maximize community benefit, we will:

• Publish the full open-source repo with examples, architecture guides, and testing workflows.

• Release a demo DApp explaining how selective disclosure and ZK proofs work on Midnight.

• Host onboarding sessions, tutorials, code walkthroughs, and office hours for builders.

• Present technical deep dives to the community via AMAs, workshops, and dev blog posts.

• Share integration opportunities with Midnight teams, builders, and enterprise partners.

All code, tests, and documentation will be permanently available for anyone to extend.

Overall Impact

This project establishes the first reusable, open-source compliance ZKP engine on Midnight. It enables developers, enterprises, and regulators to explore privacy-preserving verification without exposing user data.

Its measurable outcomes include:

• Thousands of new identities created.

• Tens of thousands of transactions.

• Strong developer participation.

• High GitHub engagement.

• More DApps built on Midnight.

By creating foundational infrastructure that can be reused, improved, and adopted across the ecosystem, this project produces exponential value, making the $10,000 grant one of the highest-impact, highest-leverage investments Midnight can make.

[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?

I have strong, practical experience with the Midnight ecosystem, having already built several internal mini-applications to understand its architecture, privacy rules, and developer workflows. Through these experiments, I gained hands-on knowledge of Compact contracts, selective disclosure patterns, confidential state management, and ZK proof flows within Midnight. This experience gives me confidence in both the feasibility of this project and my ability to implement it effectively.

In addition to my work with Midnight, I have been working at Ontology Network for over one year and have more than five years of development experience. Ontology is a leading blockchain platform focused on decentralized identity, verifiable credentials, and trust frameworks. During my time there, I have contributed to multiple DID implementations, including AI DID, IM DID secure messaging, and identity-integrated Web3 applications. I also successfully delivered a funded Ontology grant project building an identity layer for an NFT-based platform, integrating DID-based verification into digital collectibles and user profiles. This experience demonstrates my ability to execute complex identity-focused blockchain solutions in production environments.

I also serve as the Africa Community Lead at Ontology, giving me operational experience in managing technical processes, documentation, and stakeholder communication across multiple regions. This combination of Midnight development experience, DID expertise, and hands-on identity engineering directly supports the successful delivery of this proposal.

I work closely with Edmond Honglei-Cong, a full-stack developer with strong experience in identity workflows, UI development, and backend integrations. We have collaborated at Ontology on several technical projects, including identity-linked communication systems, onboarding tools, and DID-enabled applications. Together, we have repeatedly demonstrated the ability to deliver reliable, structured, and technically sound blockchain solutions.

Team and Roles

Founder / Lead Developer (me)

Responsibilities:

• ZKP design and proof-generation workflows

• Compact smart contract development

• Midnight integration and wallet interactions

• Architecture planning, documentation, and milestone delivery

• Oversight of testing, quality, and accountability

Edmond Honglei-Cong – Full Stack Developer

Responsibilities:

• Frontend and backend development

• Demo DApp UI implementation

• API integration and test environment setup

• Debugging, QA, and developer documentation

• End-to-end connection between UI and Midnight smart contracts

Additional Contributors (as needed)

• Privacy engineers for ZK optimization

• Documentation specialists

• QA testers for reproducibility and integration testing

These contributors will be brought in as the project scales, under our supervision.

Feasibility and Validation Steps

To ensure feasibility and high-quality delivery, we will:

• Leverage our existing knowledge of DID, verifiable credentials, and identity workflows from Ontology to structure the ZKP module.

• Rapidly prototype Compact contracts and ZK circuits within a controlled Midnight environment.

• Build and test a demo DApp that verifies selective disclosure proofs end-to-end.

• Conduct unit tests, integration tests, and UI workflow tests to validate functionality.

• Release all code as open-source, allowing the community to verify, fork, test, and contribute to the module.

This workflow ensures both feasibility and transparency, minimizing technical risk while maximizing community engagement.

Trust and Fund Management

• All work will be conducted in public GitHub repositories with commit history and version tracking.

• Funds will be used strictly for development, testing, documentation, and delivery.

• Regular updates will be provided through milestone reports, GitHub issues, and community demos.

• Open-source licensing ensures traceability, auditability, and accountability in how progress is made.

With direct Midnight development experience, identity engineering expertise from Ontology, a successfully funded DID project, and a transparent execution plan, we are fully capable of delivering this ZKP module to a high standard and with complete accountability.

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

The total budget requested for this Midnight grant is $10,000 USD, allocated across the full three-month development cycle. This budget will be used to cover developer labor, ZKP engineering, compact contract development, UI integration, testing, documentation, and delivery of a complete proof-of-concept. The spending structure is designed to ensure that all funds directly contribute to the successful completion of the project.

A significant portion of the budget will go toward core development, which includes writing the compact smart contracts, implementing ZK circuits, building the selective disclosure module, and preparing the full public repository. This accounts for $5,000 USD (50%) of the budget. The cost reflects the high technical complexity of ZK engineering and the labor required from the two lead developers (Barnabas and Edmond). Funds under this category also cover essential technical tools, libraries, development environments, and initial unit testing to verify correctness of the circuits and contracts.

Another $1,750 USD (17.5%) is allocated to UI integration and full developer-oriented documentation. This covers the work required to connect the compact contracts to a demo interface, implement Wallet Connect flows, and make the ZK module easily testable by other developers. It also covers comprehensive documentation, including setup guides, example API calls, usage instructions, and tutorial-style walkthroughs. A portion of this allocation is reserved for validation testing to ensure the UI correctly displays proof results and that the demo runs smoothly.

The remaining $3,250 USD (32.5%) is allocated to final proof-of-concept delivery, testing, and project wrap-up. This includes producing a full PoC demonstration video that showcases the contract interactions and selective disclosure workflow. Funds cover the completion of a robust testing suite, final documentation, project summary reports, and any final refinement to the contracts or UI to ensure a polished and stable result. Minor bug fixes, UI adjustments, and performance optimizations also fall under this category.

The budget is designed to maximize value for Midnight by focusing spending on labor, technical execution, and deliverables that will remain publicly available and reusable. Each dollar contributes directly to development, testing, documentation, and ensuring the project is fully open-source, well-maintained, and useful for the wider Midnight ecosystem.

[Final Pitch] Value for Money

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

The 10,000 USD grant provides exceptional value for the Midnight and Cardano ecosystem because it delivers a complete, reusable, open-source identity and selective disclosure module that would normally cost several times more to build. Traditional KYC and verification services are centralized, expensive and closed. Providers like SumSub, Veriff and Fractal charge onboarding fees, monthly enterprise subscriptions, and per-user verification costs that range from 1 USD to 3 USD per verification. If a Cardano project were to operate at scale, costs would quickly reach tens of thousands of dollars per month, and none of that investment benefits the ecosystem because the infrastructure remains fully proprietary.

In contrast, this project delivers a privacy preserving verification module that is open-source, permissionless and free for any team to integrate. Instead of recurring costs, developers get reusable smart contracts, ZK circuits, example flows and API-ready logic that can be applied across many use cases. This means a one time investment of 10,000 USD replaces a lifetime of vendor fees for dozens of future projects. The cost savings alone justify the grant.

Quantitatively, the expected value becomes very clear. If the module is integrated by DeFi protocols, wallets, compliance tools and identity based applications, it can easily generate more than 100,000 on-chain ZK verification transactions within its first year. This produces 10 transactions of network activity for every dollar invested. If the module reaches wider adoption and powers 500,000 ZK verifications across the ecosystem, that increases to 50 transactions per dollar. This is realistic because privacy-preserving verification is a foundational requirement for regulated dApps, fintech tools, age-restricted apps, risk scoring systems, DAO membership gating and financial compliance.

The open-source nature multiplies the value. Every fork of the repository represents a new project building on top of the original work. An identity module is the kind of core infrastructure that developers naturally extend, leading to new DID flows, advanced selective disclosure patterns, marketplace features, and enterprise integrations. Each fork increases reach, and each integration increases network usage.

API usage further amplifies the long-term value. This project provides clean, developer-friendly endpoints that can be reused by any team without repeating complex circuit or contract work. Once this module becomes part of the standard identity toolkit for Midnight builders, the API can support thousands of verifications per month across multiple applications. Even conservative usage produces a consistent flow of transactions to the Midnight ledger, strengthening network metrics such as activity, demand for computation and developer engagement.

Economically, the proposal is far more efficient than alternative approaches. Any team building this from scratch would spend between 25,000 and 60,000 USD on engineering alone due to the complexity of ZKP design, circuit optimization, contract development and testing. By funding this once for 10,000 USD, Cardano ensures every future builder avoids these costs. The grant therefore generates compounding returns for the ecosystem because one investment unlocks a reusable identity foundation for an unlimited number of applications.

This project also enhances ecosystem credibility. Having a ready to use, privacy-first verification module demonstrates the real-world utility of Midnight’s architecture. It strengthens onboarding for developers, encourages enterprise experimentation and positions Cardano as a leader in privacy-enabled identity infrastructure.

The 10,000 USD investment is highly efficient, technically valuable and strategically important. It delivers a reusable identity layer, produces measurable network activity, reduces long-term development costs, encourages forks and API-based adoption, and directly increases ecosystem utility. It is one of the highest long-term value outcomes that Catalyst can fund within this budget range.

[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