Market making bots on Cardano

[IMPACT] Please describe your proposed solution.

Market making bots are one of the most widely used methods to bring more liquidity to exchanges.

However, existing frameworks for trading bots do not interface with Cardano. 

One of the reasons is the eUTXO model, which requires completely different functions to deal with inventory or place buy and sell orders.

This project will provide an open-source framework and templates for trading bots on Cardano. 

We will start by developing market making bots, which can be applied to provide liquidity on MuesliSwap. Users will be able to either select the market making strategy we provide or instead extend the framework with their own strategies.

In the next step, we will build connectors to other decentralized exchanges, allowing for market making across exchanges.

We will then will focus on providing templates for additional strategies and use cases, such as liquidity mining and arbitrage.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

Having an open-source framework brings more liquidity to DEXes and increases decentralization by giving the control of trading bots into the hands of the community.

It will also allow users to come up with their own strategies and build their own connectors.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

We are already experienced in developing bots on Cardano as our matchmaker has been operating since the launch of our DEX.

We will also not encounter any budget problems as any extra costs will be covered by the MuesliSwap team. As we have a big development team we will also not encounter any risks like development staff leaving the team. 

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

The development can be split into 4 steps: 

Step 1: Basic infrastructure and Market making bots on MuesliSwap (2 months)

Step 2: Connectors to other exchanges and cross-exchange market making (1 month)

Step 3: Strategies and other use cases such as liquidity mining and arbitrage (1 month)

Step 4: Maintenance

[FEASIBILITY] Please provide a detailed budget breakdown.

Development Step 1: (250 hours, 18750 USD)

Development Step 2: (120 hours, 9000 USD)

Development Step 3: (120 hours, 9000 USD)

Maintenance : (100 hours, 7500 USD)

[FEASIBILITY] Please provide details of the people who will work on the project.

The MuesliSwap development team will work on this project. The MuesliSwap development team currently consists of 9 developers with experience in different fields from which most are long-standing Cardano community members. With Muesliswap being the first major DAapp launching in November 2021 the team has gained a lot of experience in developing decentralized finance infrastructure.

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

We are not planning to return for further funding in a later round for that specific project. The remaining costs of development are planned to be covered by the MuesliSwap team.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

The progress will be visible in a publicly available repository on GitHub.

[AUDITABILITY] What does success for this project look like?

We hope that this project equips the community with a framework to efficiently use trading bots on Cardano and also extend the framework with custom strategies or any other types of functions.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is a new proposal from the MuesliSwap team.