[IMPACT] Please describe your proposed solution.
The Djed family of stablecoin protocols is characterized by being crypto-backed and autonomous. Users can buy and sell stablecoins and reservecoins by interacting with the contract for prices that depend on an oracle and on the reserve ratio. The contract's algorithm aims to keep the reserve ratio significantly greater than 100%, thus ensuring that every stablecoin is backed by significantly more than 1 USD worth of ADA and can absorb significant price shocks. Stability theorems have been mathematically proven and formally verified, and the paper was accepted at the IEEE International Conference on Blockchain and Cryptocurrency.
This implementation of a stablecoin protocol on Milkomeda is based on the Osiris version of Djed, which improves the Minimal version by allowing the sale of reservecoins even when the reserve ratio is below the minimum threshold, provided that stablecoins are simultaneously sold in a proportion that increases the reserve ratio. This makes it easier for the reserve ratio to recover and for the peg in secondary markets to be restored even in situations where the demand for stablecoins is high and the demand for reservecoins is low following a price shock (a situation that is currently affecting SigmaUSD and COTI's Djed, making them trade above the peg at secondary markets). This version also introduces maximum transaction limits, in order to reduce the wholesale discount effect described in the paper.
Our solution is composed of:
- Fully immutable smart contracts, running on Milkomeda.
- A frontend (accessible here: <https://milkomeda-c1.djed.one>) that has also been deployed to IPFS (InterPlanetary File System) and that can also be run locally by anyone.
Therefore, it is fully autonomous, zero-governance, not operated by anyone, censorship resistant, transparent (with code open to inspection and contributions), audited and rent-seeking-free.
To know more, watch our whiteboard animation video.
[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?
Stablecoins are explicitly listed here (<https://cardano.ideascale.com/c/campaigns/348/about>) as being of a type of project addressing the Products & Integrations challenge within the DeFi category.
As the challenge states, "Cardano needs a thriving ecosystem of different products and integrations for the community to use that increasingly become the better alternatives over current centralised providers". Djed Osiris on Milkomeda is the first fully decentralized (operator-free, governance-free, fully imutable) stablecoin protocol in the Cardano ecosystem, and thus directly addresses the challenge's statement.
Stablecoins are a foundational building block to enable DeFi to flourish on Cardano. Djed Osiris ensures that this foundation is strong and reliable.
[IMPACT] How do you intend to measure the success of your project?
We are focused on the following indicators of success:
- Getting listed by major DEXes on Milkomeda.
- A high TVL compared to the TVL on Milkomeda. (Based on SigmaUSD experience on Ergo, a TVL greater than 3% of Milkomeda's TVL could be considered a success.)
- A high transaction volume, minting and burning stablecoins and reservecoins in interactions with the Djed Osiris contract.
The Djed Osiris stablecoin on Milkomeda will positively affect Cardano's productivity and growth in the following ways:
Since the protocol uses (m)ADA as a reserve asset, it creates extra utility for ADA.
It increases the demand for ADA, since ADA is needed to mint stablecoins and reservecoins.
Like any other stablecoin, Djed Osiris brings the typical use cases of stablecoins (e.g. payments, remittances, hedging against volatility, leveraging, …) to Milkomeda and Cardano. In contrast to other stablecoins, it does so in a fully autonomous, decentralized, immutable, governance-free way.
[IMPACT] Please describe your plans to share the outputs and results of your project?
The Djed Alliance is an open network of individuals and entities. Our already executed plans to share the outputs and results within this network and with the wider public include the following:
GitHub Repositories: the code that we have produced is available in the Djed Alliance's GitHub space.
Adoption by DEXes: we have engaged with DEXes on Milkomeda to get Djed Osiris listed in them, so that the DEXes themselves and their users can benefit from this stablecoin protocol.
Tweets: we informed the public of the outputs and results through the Djed Alliance's Twitter Account.
Discord: we maintain a Discord server for communication.
[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?
This project is already fully delivered.
Instead of waiting for Catalyst funding to start the project, we went ahead and already completely delivered the project. Instead of requiring the Cardano community to trust us, we trust the Cardano community to partially cover the development costs of a valuable project that has already been delivered.
We have faced unspeakable challenges in the delivery of this project. To overcome those challenges, we incurred high opportunity costs. But we did it! And we hope the Cardano community will appreciate it.
This project's delivery has been driven by this proposal's applicants, by anonymous contributors and by people affiliated with the following teams:
Bloxico: a company founded in 2018 by several blockchain and fintech experts with the goal of creating second to none software products in fintech and Web3 domain. Bloxico is focused on continuous innovation, always searching for new solutions that use Blockchain to revolutionize the way Business is done, with quality as a top priority. Bloxico has enjoyed an astonishing growth of 1152% since its inception. It currently gathers a team of 100+ highly skilled professionals and was recognized internationally by being ranked 9th on the Deloitte Technology Fast 50 Central Europe list. Bloxico is IOG’s known partner that contributed to several strategic projects, including COTI's Djed implemented in Plutus on the Cardano Blockchain.
AOSSIE: the Australian Open Source Software Innovation and Education association, a not-for-profit registered charity founded in 2016 and funded by Google Summer of Code every year to mentor students in open source software development of innovative projects.
Thespian: a full-cycle software development company founded in 2015.
[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?
The project's achieved goal was to have Djed Osiris launched on Milkomeda. This was accomplished on the 29th of April 2023.
[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.
Milestones (All Completed!):
- Refactoring and simplification of the Minimal Djed smart contract.
- Completed in Q3 2022.
- Implementation of the Djed Osiris features (simultaneous sale of stablecoins and reservecoins, transaction limits and decreasing treasury fee) in the smart contract.
- Completed in Q4 2022.
- Testing of the smart contract.
- Completed in Q4 2022.
- Refactoring of the frontend, to conform with the new interface of the improved and upgraded smart contract.
- Completed in Q1 2023.
- Audit of the smart contract by Peckshield.
- Completed in Q1 2023.
- Set up of continuous deployment of frontend to IPFS.
- Completed in Q1 2023.
- Deployment of contracts to Milkomeda Mainnet.
- Completed on the 29th of April 2023.
[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.
The milestones have led us to produce two deliverables:
- The (fully autonomous) smart contracts, deployed to Milkomeda.
- Source Code: <https://github.com/DjedAlliance/Djed-Solidity/releases/tag/Belus>
- Contract Address: <https://explorer-mainnet-cardano-evm.c1.milkomeda.com/address/0x67A30B399F5Ed499C1a6Bc0358FA6e42Ea4BCe76>
- A frontend to allow users to interact conveniently with the smart contracts.
- Source Code: <https://github.com/DjedAlliance/Djed-Solidity-WebDashboard>
- URL of the frontend: <https://milkomeda-c1.djed.one>.
The audit reports by Peckshield can be found here: <https://github.com/DjedAlliance/Djed-Solidity/tree/main/audits> .
[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.
Refactoring of Minimal Djed smart contract: 2560 USD.
Implementation of auxiliary contracts: 900 USD.
Research of Djed Osiris features: Not accounted in this proposal.
Implementation of Djed Osiris features: 9000 USD.
Research of Improvements for Milkomeda's Open Oracle (MOO): Not accounted in this proposal.
Implementation of Improvements for Milkomeda's Open Oracle (MOO): 11000 USD.
Implementation of a better Oracle poster script: 1180 USD.
Refactoring of the frontend: 22000 USD.
Testing and Devops: 5535 USD.
Audits by Peckshield: 9600 USD.
Marketing (writing of Medium articles and Tweets): Not accounted in this proposal.
Business development (for adoption by DEXes on Milkomeda): Not accounted in this proposal.
Infographic: 105 USD.
White Board Animation: 263 USD.
Djed Alliance Logo: 89 USD.
Domain Purchase: 100 USD.
Home-Page: 2600 USD.
[RESOURCES & VALUE FOR MONEY] Who is in the project team and what are their roles?
This project benefitted from contributions by people and teams who wish to remain anonymous and by people and teams whose identity and participation in the project is known. Below we list only the latter. Furthermore, we distinguish them in two groups: people/teams whose work has been accounted in this proposal's budget and people whose work has not been accounted in the budget.
People whose contributions have not been accounted in this proposal's budget:
- Dr. Bruno Woltzenlogel Paleo (a.k.a. Zahnentferner):
- Vision, overall supervision, research of Djed Osiris, implementation of Djed Osiris features.
- Dragutin Vukotic:
- Project management.
- Filip Dimitrijevic:
- Business development.
Teams and People whose contributions have been accounted in this proposal's budget:
Katarina Antic: management of the frontend upgrade.
Kristina Pejcic: software development of the frontend for upgraded contracts.
Danilo Kitanovic: development of smart contracts.
Nikola Jovancevic: quality assurance and tests.
Tomislav Ivanovic: devops.
Australian Open Source Software Innovation and Education:
Smart contract development, tests and IPFS CD configuration.
Smart contract development and tests.
Home-page design and implementation.
Configuring the Djed Alliance's repository settings and setting up Code Preview, to ease the review of pull requests and improve our PR processes.
[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?
The audit costs were paid to Peckshield. Peckshield normally charges 2400 USD per day. Thanks to prior intensive refactoring, we were able to make our smart contracts very compact and clear, and hence auditable in a short amount of time (4 days), for an exceptionally low price.
The software development costs were calculated by carefully tracking each contributor's spent time and multiplying it by his or her hourly rate. Contributors were from countries where rates are (un)fortunately low, such as: Serbia, Poland, Mexico and India… Furthermore, the work of all our applicants, whose hourly rates are higher, have not been accounted for in this proposal.