CRCI - A First Principles Approach to DeFi Fundamental Analysis

[IMPACT] Please describe your proposed solution.

In today's landscape of Decentralized Finance (DeFi), rapid innovation often outpaces the development of robust user protections. DeFi projects largely subscribe to a 'move fast and break things' mentality, which, while fostering speedy advancements, often neglects essential safeguards. Bad actors can thrive in this environment and even well meaning projects can be easily swayed by crimes of opportunity due to the uncheck and largely unregulated crypto ecosystem. Traditional financial systems, on the other hand, while not perfect, boast numerous layers of protection, best practices, and insurance options. This dichotomy is a clear indication of the need for improved consumer advocacy and the insistence on transparency and excellence within the DeFi sector.

Now, consider a future in which DeFi projects meet or exceed the commitment to consumer protections compared to their traditional counterparts. Envision a DeFi ecosystem where safety protocols, standards, and best practices are not an afterthought, but a fundamental prerequisite. Such an ecosystem would combine the freedom of DeFi with the assurances of traditional finance, creating a balanced blend of innovation and confidence so the ecosystem can truly grow.

We're introducing the Crypto Research and Confidence Insights project (CRCI). CRCI seeks to fill the void in the DeFi landscape, the lack of a structured fundamental analysis reputation system. CRCI aims to bridge the divide between the current state of DeFi and its potential, focusing on the broader picture of consumer protection and engagement. It plans to empower users by providing them with vital knowledge and research insights, thereby fostering a culture of informed user advocacy and insisting builders prioritize the consumer.

Achieving this vision requires more than incremental adjustments; it necessitates a substantial paradigm shift built from the ground up that considers the nuances of a decentralized ecosystem. It compels us to rethink our approach to DeFi, making consumer protections a core priority rather than an optional addition.

CRCI Accountability

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

The benefits the CRCI brings to the Cardano ecosystem are the exact benefits we were hoping to find but instead we found the vacancy we decided to fill.

1 Comprehensive Assessment:

The rise in the number of DeFi projects makes it challenging to evaluate each one thoroughly, from a fundamental analysis perspective. CRCI simplifies this process by conducting comprehensive assessments to determine the project's score among key metrics and the level of confidence for investment or participation. This helps individual and VC investors focus their efforts in trying to understand and evaluate each project independently. While not in any way intended to be a replacement for individual due diligence, it’s a standards based marker for which to encourage investigation for any individual or organization for which to extrapolate their own investment confidence.

2. Transparency and User Protection:

CRCI places high importance on user protection and ecosystem health, which are essential to maintaining the trust and confidence of users in the Cardano ecosystem. It achieves this by insisting in transparency for all DeFi projects, requiring them to clearly communicate their intentions, execution plans, and deliverables.

3. Revolutionizing DeFi Analysis:

Alternative methods of analyzing DeFi projects such as technical analysis or sentiment analysis often miss out on subtle differences that could significantly affect the project's impact on the investor. CRCI uses a unique first-principles approach, breaking down DeFi projects into their basic elements, enabling a deeper and more nuanced understanding of their propositions and implementations.

4. Accumulated Experience:

Having gathered data from various DeFi projects and modeled trends and best practices, CRCI possesses considerable experience in the space. This knowledge aids them in assessing new projects, using proven, user discernable metrics that reflect the project's potential to operate in a manner that protects the user as much as possible.

5. Accountability Framework:

CRCI's structured accountability framework aims to measure the confidence level for potential investments or engagement in DeFi projects. This involves creating industry best practices, considering project failures with an exclusive demerit mechanic, and documenting the entire CRCI scoring methodology to ensure a meaningful and holistic evaluation of each project. This tooling allows for CRCI to partner with well-intentioned DeFi projects and guide them to build in ways that advocate for the investor and at the same time pose a barrier for bad actors.

6. Powerful Visual Representation:

The CRCI Matrix will be an effective visual representation that enhances understanding and comparison of DeFi projects. By presenting the data in a visually compelling and digestible format, it allows users to quickly grasp a project's fundamentals and make informed decisions on where to continue due diligence on their investment decisions.

7. User-friendly Platform:

CRCI plans to build an intuitive, user-friendly website that distills complex DeFi fundamental analysis data into understandable information. This platform aims to empower individuals by providing them with research insight they can add to their own due diligence to make informed investment decisions, encouraging accountability and transparency among DeFi projects.

8. Community Engagement:

An engaged community is a vital part of a thriving ecosystem. CRCI aims to cultivate an environment where users can share their knowledge, insights, and experiences, fostering a sense of community. It encourages users to discuss and collaborate, promoting healthy debate and shared learning.

9. Continued Reviews and Enhancements:

The DeFi space is dynamic, with new projects continually entering the ecosystem and existing projects innovating and iterating. CRCI is committed to regularly updating its assessments of these projects, ensuring that the platform remains valuable for users. Moreover, it constantly works to improve the user interface and refining the review format based on user feedback.

10. Strategic Partnerships:

In an effort to amplify its reach and credibility within the community, CRCI actively seeks partnerships with reputable DeFi projects, influencers, and organizations. These collaborations contribute to the development and growth of the Cardano ecosystem. DeFi leaders lead in accountability, and the CRCI is a platform built to highlight industry leaders with evidence of transparency, user protections, and excellence.

These benefits collectively contribute to the strengthening and advancement of the Cardano ecosystem, providing comprehensive fundamental analysis, and a user-accessible platform for the individual and their due diligence journey of DeFi projects.

[IMPACT] How do you intend to measure the success of your project?

CRCI has a unique opportunity to directly measure success as it's essentially the core tenet of the project, measuring DeFi projects and being able to track how they improve their CRCI scores in 8 categories. Success would see the impact of the accountability assessments offered by CRCI how DeFi projects improve their scores over time.

We've created the project with intention from a first-principles perspective.

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Our methodology and scoring process can be considered a direct KPI of both the CRCI's impact and on the DeFi projects it reviews. Projects will be tracked by the CRCI metrics over time and mapped along their improvements and demerits accounted for in the CRCI scoring methodology.

CRCI Review Summary Liqwid Finance

The CRCI project aims to make its results widely accessible, promoting transparency in the Cardano DeFi ecosystem through the CRCI, freely accessible on our website. We plan to engage the Cardano community actively, encouraging discourse about DeFi projects mainly through our web app interface.

CRCI Matrix April 2023

We anticipate collaborations with other DeFi ecosystem entities, like index providers, launchpads, wallets, news outlets, influencers, and directories. Our API service will aid in sharing our indices and ratings, amplifying our reach and understanding of the Cardano DeFi space.

To stimulate further research and innovation, we'll share our findings with academic and industry researchers, possibly publishing on industry news sites and influencer content. The CRCI data could guide further R&D activities, offering insights into DeFi trends and patterns, and raising accountability standards. User feedback will inform the development of new features and services.

CRCI Tokenomic Data Parsing Example

We're dedicated to the ongoing refinement and improvement of the CRCI based on our findings and user feedback, ensuring its continued relevance, usefulness, and impact as the DeFi landscape evolves.

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[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

Our primary value-add to the consumer lies in the consistency of our measurement criteria, which provides a standardized way to evaluate and compare projects. While some subjectivity is unavoidable, the consistent application of these criteria ensures fairness and objectivity to the extent possible.

The proposition of a fundamental analysis review of a project comes down to trying to determine intent, which is both a testimony to the communication skills of the project and the discernment of what is said in alignment with actions that support or diminish the claims.

The conclusions and scores from the CRCI process are not perfect indicators of success or failure but the criteria of the CRCI process is intended to expose signals that tend to be indicative of such things.

The design of our process is grounded in the exploration of finding the right problems to solve, defining the root causes, and solving the problems in the right way. After scouring the industry for existing solutions, we saw the need for a new and innovative approach.

CRCI Double Diamond

The proof of concept has already been created and deployed as a v.1 product, and the majority of the initial research and development has been completed at the time of this proposal. We did not want to come to Catalyst with empty hands or no skin in the game. We're best suited to deliver this product because the majority of the groundwork is already complete.

It's with this significant base of work that we come to catalyst to prove we'll deliver on our intentions, for which we're asking in this proposal.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

Our main goal for the CRCI project is to foster informed decision-making in the Cardano DeFi ecosystem by providing a comprehensive and readily available visual index of DeFi projects. This is aimed at enhancing transparency and accountability in the ecosystem. To be more specific, our objectives include:

Developing a reliable and robust CRCI web application interface that is user-friendly and intuitive, providing easy access to our indices and ratings.
Continue project evaluations and updates to our indices to ensure our ratings are relevant with the current state of DeFi projects in the Cardano ecosystem.
Engaging with the community, ecosystem partners, and researchers to promote knowledge sharing, discussion, and further innovation in the DeFi space.

Measuring the feasibility and success of our project will primarily be qualitative due to the nature of our goals. We will look at the level of engagement from the community and our partners, the feedback we receive, and the discussions that our project sparks in the ecosystem. This will be measured through various channels, including website traffic, social media engagement, feedback from partners, and user testimonials.

In addition, we plan to implement a user feedback system in our web application to gather insights about user experience and satisfaction. This will give us a direct line to our users, enabling us to understand their needs better and make necessary adjustments to our platform and indices.

In terms of implementation, we have a skilled and experienced team capable of developing and maintaining the CRCI web application. The team's expertise in web development, blockchain, DeFi, and data analysis ensures that we can deliver a high-quality, reliable, and insightful product to our users. We also have a solid project management framework in place to ensure the efficient execution of the project.

[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.

Objective: To create a user-friendly and reliable DeFi review platform that empowers individuals to make informed decisions and promotes accountability through transparency, user protections, and excellence in the DeFi ecosystem.

We propose an innovative and user-friendly website that will revolutionize how individuals navigate the decentralized finance (DeFi) landscape. Our platform will provide clear and visually captivating data visualizations, empowering users with the knowledge they need to make informed decisions while holding DeFi projects accountable.

Phase 1: Project Initiation and Foundation

Extensive R&D for Scoring Structure and Process Development:

Conduct initial research to design a user-friendly scoring structure and review process. Focus on simplicity and clarity of information. (Duration: 12 months) Status: completed

CRCI Scoring Process Documentation:

Create a simplified and easily understandable document outlining the scoring process to ensure transparency and consistency in review evaluations. (Duration: 1 months) Status: completed

Data Collection:

Gather relevant data on various DeFi projects, emphasizing information that helps users assess security, user experience, and project legitimacy. (Duration: Ongoing throughout the project)

Initial Reviews:

Conduct 30+ comprehensive reviews of prominent DeFi projects, highlighting the benefits and risks for users in a concise and accessible manner. (Duration: 4 months) Status: completed.

Proof of Concept Data Visualization Matrix:

Develop an intuitive visual matrix that simplifies the presentation of review data, making it easy for users to compare and understand project evaluations. (Duration: 2 months) Status: completed.

Public Project Overview Presentation (17 slides):

Create a visually appealing and straightforward presentation that clearly communicates the project's purpose, benefits for users, and commitment to their financial safety. (Duration: 1 month) Status: completed.

Business Structure Presentation (60 slides):

Create a comprehensive, visually appealing and straightforward presentation that details the business case, product/market fit, competitive landscape, risks, projections and monetization strategies. (Duration: 2 months) Status: completed.

Project Web Portal:

Launch a user-friendly website as the central hub for the DeFi review project, focusing on providing clear and concise information about reviewed projects and how to use the platform effectively. (Duration: 1 month) Status: completed.

Phase 2: Expansion and Growth

Intuitive Website Interface and API Integration interface:

Develop a sleek and user-friendly website with clear visualizations that simplify complex DeFi project information from a fundamental analysis perspective.

Data Visualization Matrix:

Create interactive and intuitive data visualizations to help users assess project legitimacy and investment confidence.

Holding Projects to High Standards:

Advocate for accountability by providing exclusive resources that empower DeFi projects to build in a manner that offers the highest user protections and advocates for the platform participants as the top priority. (Duration: Ongoing)

Funding Awareness Campaign:

Develop a marketing strategy that targets the general public and emphasizes the importance of informed decision-making in the DeFi space. Highlight the project's user-centric approach and the need for public support. (Duration: Ongoing)

Continued Reviews:

Conduct reviews of new and existing DeFi projects, ensuring that the platform remains valuable for users. Conduct ongoing reviews of emerging and prominent DeFi projects, delivering unbiased assessments of their strengths and room for growth. (Duration: Ongoing)

Enhancements to User Experience:

Continuously improve the platform's user interface, making it more intuitive and accessible to individuals with all levels of DeFi knowledge. Incorporate user feedback to refine the review format and presentation. (Duration: Ongoing)

Community Engagement:

Foster a supportive and interactive community around the DeFi review project through social media, forums, and educational content. Encourage users to share their experiences and participate in discussions. (Duration: Ongoing.)

Strategic Partnerships:

Collaborate with reputable projects, influencers, or organizations to amplify the project's reach and build credibility within the community. (Duration: Ongoing.)

Key Milestones:

Completion of initial R&D and Scoring Process Documentation. (12+ months) Status: Completed.
Launch of the Project Web Portal and initial project review summaries. Status: Completed.
Release of the Proof of Concept Data Visualization Matrix. Status: Completed.
Delivery of a Public Project Overview Presentation (17 slides). Status: Completed.
Develop a comprehensive Business Structure Presentation (60 slides). Status: Completed.
Public Interactive Web Application and API Integrations. Status: Funding
Ongoing reviews of new and existing DeFi projects. Status: Funding
Development of an engaged community around the DeFi review project. Status: TBD
Strategic partnerships established to expand the project's reach. Status: Ongoing.

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

Our project deliverables include:

Interactive Web Application: We're building a user-friendly platform that is continuously updated with reviews and offers numerous features such as searchable project cards, user profiles, and a project comparison tool.
API Access: We are providing multi-tier API access, with free standard review metrics and information, and premium access for detailed review insights.
Upgrades, Optimization, and Maintenance: We're committed to continuously enhancing the platform based on user feedback, ensuring an optimal user experience.
Community-Funded Reviews: We will deliver more Cardano ecosystem DeFi reviews and analyses of various projects, covering aspects like social engagement, whitepaper research, tokenomic breakdown, etc.

In terms of progress tracking, we're employing a Scrum methodology, focusing on:

Team Velocity: To gauge our work capacity per sprint.
Story Points Completed: To track the completion of set objectives.
Burndown Chart: To ensure we're meeting our goals within each sprint.

This iterative approach ensures we stay adaptable and efficient, delivering consistent, high-quality outputs.

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

Comprehensive Budget Overview: Self-Funded Contributions & Catalyst Funding Proposal

(Prices adjusted for 1 ADA = .28 USD at the time this proposal was prepared.)

Extensive R&D for Scoring Structure and Process Development:

Research and Development Costs: $90,000 USD (321,000 ADA)