[IMPACT] Please describe your proposed solution.

<u>Introduction</u>

ADA Handle is the leading naming service on the Cardano blockchain, with over 221,000 Handles minted. It has been adopted by nearly all major wallets and the great majority of dApps. We are now going to initiate the transition from the current minting engine to a Smart Contract-based Merkle Tree-verified decentralized minting solution. This means that the community will now own and decide on the future of ADA Handle. The primary goal of this proposal is to deliver the Smart Contract-based Merkle Tree-verified decentralized minting of Handles and subHandles.

<u>Permissioned Minting</u>

The existing ADA Handle Standard mints Handles utilizing private keys that the co-founders manage. Our team and board members, as per the above section wherein we describe the additional applicants, have a combined experience of over a century in developing systems. Thus, we have been extremely cautious about protecting all minting keys, and redundancies exist to allow any of the team members to continue to build The Handle Standard. However, we know that for The Handle Standard to be successful, it must be decentralized from us. Thus, although we have bootstrapped the entire protocol ourselves, the time has come to decentralize it from us.

<u>Permissionless Minting</u>

As a team building on Cardano, the most decentralized permission-less blockchain, we understand the need for ADA Handle to be fully decentralized from the founders. It took Cardano a few years to decentralize itself from the founding entities and the time to initiate $handle minting decentralization has come for us too, after two years of building the standard. By moving towards permission-less minting, The Handle Standard will take a life of its own, allowing any individual to mint Handles and subHandles without relying on our minting engines nor founding team. We will, obviously, continue to develop and expand the Handle Standard.

We have opted to build this decentralized-minting engine utilizing a Merkle Tree solution.

<u>What is a Merkle Tree?</u>

In a nutshell, a Merkle Tree is a cryptographic primitive that permits us to publish a short string for every minted Handle. This short string is then used to commit to, and update, the larger data set. I.e., the entirety of all Handles that have been minted. The Smart Contract-based Merkle Tree-verified decentralized minting engine will, therefore, allow the entire Handle Standard to be stored on-chain, via a single 32-byte hash. By structuring the Merkle Tree correctly, not only will we be able to prove that a handle has already been minted, but we will also be able to prove that a new handle has not yet been minted. Additionally, because of how Handles hashes are calculated, our Merkle Tree-verified solution will prevent double mints by utilizing nothing else other than on-chain data. It will do so with minimal on-chain storage.

Wikipedia expands on this definition: https://en.wikipedia.org/wiki/Merkle_tree.

<u>Migration Procedure to Merkle Tree Minting</u>

Summarizing, ADA Handle will pause minting for 12-24 hours. During this time we are going to finalize the set of on-chain Handles (i.e., the ones that were recently minted). We will then use the on-chain date to calculate the Merkle Tree off-chain. Once we obtain the initial root result of the Merkle Tree, we are going to initialize the Smart Contract-based minting engine..

<u>Other Potential Solutions</u>

The team has also considered other design approaches, in order to decentralize minting from us, while preventing double mints. The other path that we considered was to store minted $handles using a stick-breaking-set in UTXO Datums. We would then need to store all these Handles in the Datums of many UTXOs which, at 220,000 existing minted $handles, and assuming the constraint of 450 $handles per UTXO –the absolute extreme limit– this would require nearly 500 separate UTXOs, each with locking a minimum of 50 ADA to cover the minUTXO cost. The team has opted for the more elegant Merkle Tree solution.

<u>Personalization, subHandles & New Features</u>

Personalization, subHandles and all new features that we launch will be made fully compatible with our decentralized-minting solution. The Handle Standard is being built as a single solution, with all features being interconnected and made compatible.

Additionally, our existing API, which is available as an open-source Docker Container (<https://github.com/koralabs/handles-public-api>) will be upgraded to include Decentralized Minting so that all new Handles will resolve exactly as the current ones would.

The community can choose to resolve Handles directly on-chain, utilize our public API, or the decentralized Docker Container. The public API is available to all community members from: <https://api.handle.me/swagger>. This PDF file explains the resolution process: <https://public.koralabs.io/documentation/HandleResolution.pdf>.

Credits: We would like to thank π Lanningham for assisting us in understanding the Merkle Tree concept and how we can achieve decentralized minting with it. We appreciate having you as a member of our Board, π!

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

The Development and Infrastructure category, within Project Catalyst Fund 10, has two main focuses: to create and improve on tools and software that make it easier for projects to develop on Cardano, and to deliver on research, analysis and creation of standards, resources or documentation that bring innovation to the ecosystem.

Our understanding is that the decentralized Smart Contract-based Merkle Tree-verified minting of Handles and subHandles delivers solutions for both these criteria, since the technology that we will develop will create a novel manner to mint Handles, fully decentralized from the founding entity, while making it easier for all projects that wish to mint Handles (and subHandles) to do so without relying on us, the founding entity. By allowing wallets, dApps, projects and the Cardano community to freely mint Handles and subHandles, in a decentralized manner, this proposal will increase the adoption of Cardano.

Additionally, we also understand that dApps and wallets, for example, will be able to utilize the technology developed within this proposal to improve their brand awareness by giving their users the option to mint a subHandle associated with their brand. E.g., as a user creates a new Lace wallet, they could be presented with the option to mint a $john@lace subHandle. In our opinion, this will generate brand awareness for the wallet and for Cardano, given that users will be onboarded with the option to own a Handle. This novel technology will also permit wallets and projects to monetize on the standard by marking up the mint cost of subHandles.

Therefore, it is our understanding that the Smart Contract-based Merkle Tree-verified decentralized minting of Handles and subHandles is a proposal that fits the Development & Infrastructure category of Fund 10.

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

The first and most obvious success metric is the delivery of a fully decentralized minting of Handles and subHandles, that will permit any dApp, wallet or project to mint the assets any time, anywhere, without our permission or intromission.

Another important aspect is that by decentralizing the minting engine while utilizing Merkle Tree verification, we will effectively be delivering a double-mint-prevention solution for the Cardano community. "Don't trust; verify" becomes a possibility once we ship our Merkle Tree decentralized minting solution for The Handle Standard.

At Cardano, we are proud of being the most decentralized Layer 1 blockchain. Therefore, it is only logical that the leading Cardano naming service also be fully decentralized from its founders, thereby assisting on Cardano's decentralization mission. Therefore, we believe that this another metric to help quantify the success of the proposal. In other words, the decentralization of The Handle Standard from its founding entity will also assist with Cardano's decentralization path.

With over 221,000 Handles minted (at the time of the writing of this proposal), we also believe that by decentralizing minting of Handles from the founding partners will also be assisting with the onboarding of more users onto Cardano, as there will be increased trust in the ecosystem, by knowing that the leading naming service is fully decentralized, whose minting can be done in a permission-less manner.

[IMPACT] Please describe your plans to share the outputs and results of your project?

The Handle Standard presently has over 80,000 followers across all our social-media accounts, including Twitter, Discord, Telegram and founders' accounts. Our entire team is constantly communicating with our community. We are all active, answering questions and developing solutions requested by the community. This can be easily verified by monitoring all of our accounts (listed above on this proposal) and by joining ADA Handle's Discord: <https://discord.gg/sYkFgRQFwG>. Our Discord includes a dedicated channel for Project Catalyst, wherein we explain all that has been built and delivered, while answering questions along the way.

We are also in constant contact with all of ADA Handle's partners which include wallets, dApps and others. We share with them on a weekly basis all that we are building, provide clear documentation on how they can utilize the new features, while answering questions and assisting with integration. An example of this cautious and constant communication was the recent launch of Personalization on PreProd, wherein we created a launch campaign with two of the largest wallets: Eternl and Lace, coordinating with them a Public Relations and Marketing campaign. This attracted a considerable amount of attention to all projects, which generated immediate community reaction, including several review videos on YouTube and Twitter, showing to the community how Personalization works. We are going to have similar marketing strategies to communicate the launch of The Handle Marketplace.

ADA Handle's entire team is quite active on social media, constantly communicating with NFT projects, founders of other dApps, in order to remain active and relevant within the community. An example of this marketing awareness was with onboarding of 3 of the major NFT projects: Clay Nation, GOAT Tribe and Derp Birds, to assist with the development custom background images for the new Personalization feature. This approach helped us spread the word not only within our community but across theirs too, while also gaining traction with other NFT projects, as they too wanted to be part of the launch. This allowed us to create a second cohort for background images and profile pictures. A similar approach will be taken when launching this proposal, creating awareness and interest across the community.

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

The ADA Handle team bootstrapped the entire Handle protocol, by building it from ground up. We did it with community support, with assistance from our advisors, and with a full-time team, composed of 4 people: Papa Goose, Big Irish Lion, Conrad and Goose. An important note is that although we utilize our pseudonyms and avatars, we are fully doxxed, operating under Kora Labs, LLC, a USA-based company.

Therefore, we know the Handle Standard, as we have built it and what we have delivered over the past 22 months, can be used to attest our commitment and capability to deliver. Our CIO and CTO, Papa Goose and Big Irish Lion are, respectively, Plutus and Atala PRISM pioneers. They have a combined experience of over 45 years building systems. Conrad, the COO, has over 20 years building Information Security and Infrastructure projects, for TradFi operations. Goose, our CEO, has been tirelessly leading the development of the protocol.

Papa Goose and Big Irish Lion migrated from TradFi operations to build The Handle Standard, leaving behind leading positions on Top 10 USA banks. Their knowledge and background have permitted us to deliver the leading naming standard on the Cardano blockchain, with an uptime of 99.99%.

We have, thus far, had a perfect track record in delivering everything that we said that we would. Additionally, the above capabilities are our demonstration that we are the best suited team to build The Handle Marketplace as we are the ones who deployed the protocol and will continue to do so for as long as Cardano remains an L1 blockchain. We are going to be here to continue to build and improve on the standard.

We are here for Cardano and we are going to see it happen.

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

1: Validate Merkle Tree Minting

The primary goal of this proposal is to validate the proposed solution to utilize Merkle Tree verification to mint Handles and subHandles utilizing Smart Contracts. This first goal will be achieved within a private TestNet, in order for the team to securely validate and learn from the process.

2: Launch Merkle Tree Minting on Preview and PreProd

Once the team is confident that the solution is viable, that it prevents an deters attempts to double mint any given asset, we will launch the feature on the Preview and PreProd TestNets, in order to present the solution to the community, requesting their assistance to validate the technology, while looking for flaws and vulnerabilities.

3: Audit the Smart Contract

With the Smart Contract live on the Preview and PreProd blockchains, we will initiate the audit process of the Smart Contract, with our external development company. They will be our extra pair of eyes to determine that the Smart Contract-based Merkle Tree-verified minting engine is in fact safe for MainNet launch.

4: Execute Marketing Strategies

Upon concluding our audit process, we will initiate the marketing efforts to communicate the achievements with the ADA Handle and Cardano community, scheduling a date for MainNet launch. This will include the successful communication with all wallets, dApps and platforms that have integrated to or are going to integrate to The Handle Standard in the near future.

5: Launch on MainNet

Once all goals are achieved, we will launch the Smart Contract on MainNet. This will require upgrading all our systems to adapt to the new standard. This will include updating our minting engine, our API endpoint, and our Docker Container.

[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.

<u>Milestone 1: Private TestNet</u>

The first milestone for this proposal will be to build an internal TestNet, for us to deploy the Smart Contract-based Merkle Tree-verified minting engine in order to have a secure and closed environment to learn and test from. This will give our team ample room to make mistakes, to test different approaches, run load tests, determine transaction costs and requirements. This private TestNet will allow us to validate the Merkle Tree approach in combination with the ingestion process of a sample Handle database, to determine that we can convert any list of existing Handles into the Merkle Tree data structure. During this milestone we will also determine the feasibility of minting subHandles utilizing this same solution. We will then attempt to force a double mint to ascertain that the solution works as designed, while also testing with all assets alongside the Personalization feature.

1. Infrastructure Deployment.
2. Merkle Tree Validation.
3. Ingestion of Sample Handle Database.
4. Handle & subHandle Minting.
5. Attempts to Double Mint.
6. Personalization Tests.

Timeline: 3-5 months

<u>Milestone 2: Preview Launch</u>

Upon successful validation of Merkle Tree data structures within our private TestNet, we will launch the first iteration of the Smart Contract on Cardano's public Preview TestNet. This will allow the community to test the solution with us, looking for flaws and vulnerabilities. This will also permit our external auditors to initiate the validation of our code. Alongside the community, we will continue to test minting of Handles, subHandles and Personalization features. During this phase we will initiate the write up of the Decentralized Minting documentation.

1. Smart Contract Deployment.
2. Ingestion of Preview Handle Database.
3. Handle & subHandle Minting.
4. Attempts to Double Mint.
5. Community Testing.
6. Personalization Tests.
7. Initial Code Audit.
8. Decentralized Minting Documentation Process.

Timeline: 1-2 months

<u>Milestone 3: PreProd Launch</u>

After concluding a successful Preview launch, we will initiate a similar procedure on Cardano's PreProd public blockchain. This will be another step towards our MainNet launch. During this milestone we will ingest the entirety of the PreProd Handle database, utilizing our Merkle Tree data structures, to determine that we can successfully switch from the existing minting engine to the decentralized version. Alongside the community, we will continue to look for flaws and vulnerabilities. We will produce the final version of the Decentralized Minting documentation. Our auditors will also conclude the verification of the code.

1. Smart Contract Deployment.
2. Ingestion of PreProd Handle Database.
3. Handle & subHandle Minting.
4. Community Testing.
5. Personalization Tests.
6. Final Code Audit.
7. Final Documentation Update.

Timeline: 1-2 months

<u>Milestone 4: Marketing Efforts</u>

A successful PreProd launch will permit us to proceed with the 4th milestone, and ramp up our marketing efforts to communicate the deliverables with the Cardano and overall blockchain communities. We will host Twitter and Discord AMAs, engage in paid Twitter advertising in order to reach a broader audience. We will engage with news outlets and crypto platforms in order to participate in interviews and other social-media opportunities. We will actively communicate with all our partners, wallets, dApps and other relevant stake holders. It will be during this milestone that we will communicate the MainNet launch date and time.

1. Twitter & Discord AMAs.
2. Twitter Advertising.
3. Documentation Sharing.
4. Social Media Outreach.
5. News Outlets Outreach.

Timeline: 1 month

<u>Milestone 5: MainNet Launch</u>

MainNet launch will be the most critical milestone because although we will have thoroughly tested the entire solution on three separate environments (Private TestNet, Preview and PreProd public blockchains), we are going to pause MainNet minting in order to calculate the Merkle Tree hashes, which will permit us to ingest the existing 221,000+ Handles and subHandles, switching over from the existing minting engine to the decentralized and permission-less Smart Contract-based engine. During our launch we will provide the community with customer-service support and ongoing communication channels.

1. MainNet Minting Pause.
2. Smart Contract Launch.
3. Merkle Tree MainNet Database Ingestion.
4. Handle & subHandle Minting.
5. Community Launch.
6. Ongoing Support & Maintenance.

Timeline: 1-2 months

Total Development Timeline: 7-12 months.

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

<u>Milestone 1: Private TestNet</u>

The most important deliverable for the first milestone of this proposal is to enable our team with a secure and private environment for building and testing the Merkle Tree-verified solution, without having to expose to the outside world how we are building it. This environment will give us the privacy and security that we need in order to execute all our tests.

The other important deliverable of this phase will be to have empirical proof that Merkle Tree-verified minting works for our use cases, mainly Handles and subHandles, while also allowing us to test the ingestion of sample Handle data sets.

<u>Milestone 2: Preview Launch</u>

The most valuable deliverables from the second milestone will be successful testing of the Decentralized Minting engine by the Cardano and ADA Handle community, the initial write up of the documentation that will enable stake holders and interested parties to start minting Handles and subHandles in a decentralized manner, and the initial code audit by the software agency that we will hire for the job.

<u>Milestone 3: PreProd Launch</u>

The deliverables that we care the most about from the PreProd launch milestone are the ongoing tests by the community, the conclusion of our software audit and documentation. The conclusion of this phase will determine our ability to launch on MainNet.

<u>Milestone 4: Marketing Efforts</u>

The 4th milestone will produce tangible deliverables: Twitter Spaces & Discord Meetings to answer any and all questions from the community and associated stake holders, deploy Twitter paid advertising campaign to reach the broader crypto community, constant interaction with wallets and dApps to assist with integrating to the Smart Contract, while delivering customer service to all interested parties.

<u>Milestone 5: MainNet Launch</u>

The 5th and final milestone of this proposal will be to launch Decentralized Minting that will utilize Merkle Trees in order to prevent double mints on Cardano's MainNet blockchain. To achieve this we will pause minting for 12-24 hours (the number of hours will be determined by previous tests on the Preview and PreProd blockchains) in order to ingest the existing 221,000+ Handles into the Merkle Trees.

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

<u>Private TestNet</u>:

• Infrastructure: 10,000 ADA.
• Documentation: 25,000 ADA.
• Salaries and Contractors: 55,000 ADA.

Total: 90,000 ADA.

<u>Preview Launch</u>:

• Infrastructure: 45,000 ADA.
• Salaries and Contractors: 65,000 ADA.
• External Audit: 60,000 ADA.
• Documentation: 15,000 ADA.

Total: 185,000 ADA.

<u>PreProd Launch</u>:

• Infrastructure: 45,000 ADA.
• Salaries and Contractors: 65,000 ADA.
• External Audit: 50,000 ADA.

Total: 160,000 ADA.

<u>Marketing</u>:

• Twitter Advertising: 25,000 ADA.
• Salaries and Contractors: 25,000 ADA.

Total: 50,000 ADA.

<u>MainNet Launch</u>:

• Infrastructure: 90,000 ADA.
• Salaries and Contractors: 60,000 ADA.
• Other costs: 20,000 ADA.

Total: 170,000 ADA.

<u>Grand Total: 655,000 ADA.</u>

[RESOURCES & VALUE FOR MONEY] Who is in the project team and what are their roles?

PapaGoose – Master Platform Engineer (25+ years experience)

With a wide-ranging career that includes a decade of fintech experience, PapaGoose has become a specialist in enabling developers to self-serve over the entire application lifecycle. Providing workflows, standards, and automations, from concept origin, through application and security design, to infrastructure management, including production deployment and maintenance cycles.

Recently exited TradFi, in favor of blockchain and now guides projects in the Cardano community. Currently holding an executive position at Kora Labs - with the intent to build out a standard for NFT-based digital identity.

Conrad Cordeiro – InfoSec and Infrastructure Engineer (20+ years experience)

Information Security and Infrastructure management are Conrad's expertise. For over 15 years he's been supporting companies from the financial sector and for the last 10 years running his own business in New York. Hedge funds and private-equity firms were his main focus before transitioning to Cardano.

Conrad operates BLADE, a top 10 Cardano stake pool, on MainNet and TestNet, with over 60M ADA staked. Conrad was elected as a SundaeSwap Scooper and selected as a Milkomeda C1 validator. Conrad is a Co-Founder at ADA Handle and works full-time in implementing The Handle Standard.

Goose – Co-Founder @ ADA Handle / CEO @ Kora Labs

With a near decade-long stint in commercial lending in Silicon Valley Goose has sourced, structured, and executed a number of high-profile loans to some of the largest tech companies in the world. Managing relationships with financial institutions, credit agencies, and competing financiers in order to provide the most cost-efficient, desirable and prompt loan lifecycles for clients has primed Goose for the fast-paced, community-focused, and technologically cutting-edge product management lifecycle that Web 3 has to offer.

Big Irish Lion – Co-Founder / CTO @ Kora Labs / Master Platform Engineer (20+ years experience)

Big Irish Lion is a veteran developer, with over 20 years of experience with web and software development. Big Irish Lion is an Atala PRISM pioneer. Lion has hands-on experience building video-game platform and mobile applications. The Irish Lion is a server-less evangelist and is proficient with Amazon Web Services and Google Cloud Platform.a

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

Our team is composed of 4 full-time USA-based engineers. We are dedicated to building <u>The Handle Standard,</u> and we have been doing so since June 2021. 2 years of full-time dedication to Cardano and ADA Handle. The total cost of this proposal, <u>655,000 ADA,</u> will be used to fund the development, pay for infrastructure costs, reward the software company that will perform our security audit, and pay the internal team so that we can continue to build.

In the past two years, ADA Handle, being the leading naming service on the Cardano blockchain, minted over 221,000 Handles. It is our understanding that <u>The Handle Standard</u> must now initiate its path towards a fully decentralized protocol, in order for ADA Handle to exist and remain operational independently from us, the founding members. Therefore, it is our understanding that delivering a fully decentralized solution for minting Handles and subHandles will produce tangible and intangible value for the Cardano blockchain and community.

dApps, wallets, platforms and anyone else that would like to directly interact with the minting Smart Contract will be able to do so. Wallets will, for example, have the ability to independently mint Handles and subHandles for their customers, while charging a premium on the mint fee, in order to not only create brand awareness (via associated subHandles) but also to monetize their platforms in the process. dApps and other community members will also inherit the ability to integrate their own platforms directly to The Handle Standard, in a decentralized and permission-less manner.