Please describe your proposed solution.

This project will be comprised of four key activities:

• Initial analysis - examine the distribution of transactions during recent congestion periods - ie. periods of high market volatility
• Technical development - establish a new testnet, leverage and extend existing tooling as needed to reproduce the approximate distribution of transactions during congested periods on key metrics: transaction size, transaction memory, and transaction CPU requirements. This also includes key developer necessities such as a test-ada faucet
• Maintenance - a 6-month maintenance period where MLabs directly ensures that the testnet is available and provides hosting for a subset of the topology
• SPO community engagement & adoption monitoring - partnering with the SPO community to measure interest and develop potential strategies for decentralizing the congested testnet and for gaining official ongoing support as we currently have for the preprod and preview testnets

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

Intended Challenge – Development & Infrastructure

Challenge Statement – “What research, tools or software can improve the developer ecosystem or infrastructure to make it easier to build and scale on the Cardano blockchain?

How does this proposal improve the developer ecosystem?

This will provide a real-world testnet reflecting suboptimal conditions under which developers will be able to experiment with their DApp, mitigating risks related to slow oracle messages, as well as measuring worst-case throughput.

This is a critical tool for DApps where transaction timing can deeply affect user experience, and create bad debt, and other undesirable outcomes.

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

We plan to measure the success of our Congested Testnet project via technical and community-focused metrics:

• Technical Metrics - We will use Github and related tools to track software development progress. By reaching project milestones, and by delivering on specific technical goals such as maintaining server uptime, we'll be able to assess our performance and the reliability of the testnet.
• Adoption Metrics - Success will also be gauged by the level of usage of the testnet, highlighting its real-world relevance and usefulness to developers. By tracking these metrics, we'll be able to identify the community response and usefulness of our efforts.
• Community Engagement - Our goal is for this testnet to not only be functional but also embraced by the community. Our ultimate goal is to see widespread support for the testnet and for it to gain enough traction not specific to MLabs.

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

We will share the progress and outcomes of our congested testnet project as transparently as possible using the typical channels:

• Dedicated GitHub Repository – As an open-source project for use by the community, our project outputs will be made available and regularly updated on a dedicated GitHub repository. This will provide easy access to interested developers.
• Community Updates – We'll regularly update the Cardano community on our project progress and milestones through our social channels and regular Catalyst channels.
• Compliance and Documentation – MLabs has participated heavily in Catalyst in the past and has a strong track record of providing transparent and precise progress reports that are publicly available.

What is your capability to deliver your project with high levels of trust and accountability?

MLabs, a leading consultancy in the Cardano ecosystem, has a proven track record and significant experience. Our team consists of seasoned engineers, each holding expertise in their respective fields. Moreover, we have consistently demonstrated our ability to deliver complicated projects with a high degree of trust and accountability. We have an extensive portfolio of satisfied client projects as well as several popular Catalyst projects. We're committed to upholding these standards for this congested testnet proposal. Moreover, we are committed to working in an open-source and transparent manner.

What are the main goals for the project and how will you validate if your approach is feasible?

There are multiple established testnets to work from, so the initial analysis and technical development risks are quite low. Key risks include:

Risk: What if the hosting provider changes their stance on cryptocurrency and bans Our account?

Mitigation: Work with hosting providers who are explicitly pro-crypto, work with SPOs to gain early decentralization, and ensure that MLabs-run nodes operate across multiple hosting providers and/or host on our own hardware.

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.

Initial Analysis - Complete 2 weeks from funding

Technical Development: Complete 2 Months from funding

Maintenance: 6 months from completion of Technical Development, 8 months from funding

SPO Community Engagement & adoption monitoring: this will be pursued in parallel with maintenance, complete 8 months from funding.

Please describe the deliverables, outputs and intended outcomes of each milestone.

Initial Analysis (0.5 - 1 months)

Deliverable: Detailed report on the distribution of transactions during recent congestion periods.

Outputs: Clear understanding of transaction sizes, memory, and CPU requirements during congested periods.

Intended Outcomes: The analysis will guide the technical development phase, ensuring the testnet accurately reflects congestion periods.

Technical Development (2 months)

Deliverables: A new testnet that replicates congested conditions, extension of existing tools as needed, and a test-ADA faucet.

Outputs: An operational testnet for developers to use for congestion testing, and a resource for obtaining test-ADA.

Intended Outcomes: Developers can test DApps under high traffic loads, helping them identify performance bottlenecks and prevent potential exploits.

Maintenance (3 months)

Deliverables: Continuous availability of the testnet, monitoring, and troubleshooting of issues.

Outputs: A stable, high-availability testnet for congestion testing.

Intended Outcomes: Developers have ongoing access to a reliable test environment for rigorous congestion testing of DApps, facilitating continuous improvement of Cardano's ecosystem.

SPO Community Engagement & Adoption Monitoring (2 months)

Deliverables: Strategies for decentralizing the congested testnet, and proposals for gaining official ongoing support.

Outputs: A roadmap for community engagement and adoption of the testnet.

Intended Outcomes: The testnet gains recognition and is maintained by the SPO community, becoming an official persistent testnet.

Please provide a detailed budget breakdown of the proposed work and resources.

Initial analysis:

• 45 hours

Technical development:

• 250 hours
• $1,500 - Hosting costs

Maintenance:

• 30 hours
• $12,000 - Hosting costs

SPO Community Engagement & adoption monitoring:

• 35 hours

Subtotal: 360 hours @$95/hour = $34,200

Operational costs: $13,500

Total USD: $47,700

Total (@ rate $0.21 USD / ADA): 227140 ADA

**In the interest of full transparency, please note we have applied a conservative USD/ADA exchange rate in pricing this proposal. This is to ensure our operations remain stable regardless of market conditions. Although we firmly believe the future of Cardano is bright, we recognize the price of ADA and all cryptocurrencies is inherently volatile. Our financial obligations are denominated in fiat. Most importantly, this includes the salary of our engineers whose hard work makes projects like this possible.

In the unlikely scenario of severe negative price movement beyond our forecasted rate, it is possible that MLabs may need to temporarily suspend work on this proposal until the market recovers. Rest assured, this decision would be made solely to protect our business's long-term viability and never taken lightly.

We appreciate your understanding and support, and we are excited to see what we can achieve together.

Who is in the project team and what are their roles?

MLabs has quickly become one of the premier development firms in the Cardano Ecosystem. We are an IOG Plutus Partner and work regularly with IOG to develop the Cardano blockchain and ecosystem. Our team is composed of talented developers who have helped build community projects such as:

• Liqwid
• SundaeSwap
• Minswap
• Indigo
• Optim
• Many others

Through our work with early-stage projects, we have one of the largest groups of Haskell/Plutus developers in the community.

Website: <u>https://mlabs.city/</u>

Core Team

CTO and Head of Cardano Operations

Ben Hart

Ben Hart has worked in the fintech and blockchain world for more than a decade, specializing in functional programming, blockchain, and web technologies. Today, he is MLabs CTO and head of Cardano Operations. He offers strategic insight into more than a dozen ongoing projects and works with organizations across the Cardano ecosystem. He also has experience in implementing accounting software, web development, functional javascript, technical writing, and more.

GitHub: <u>https://github.com/Benjmhart</u>

Delivery Manager

Neil Rutledge

Neil serves as a delivery manager at MLabs and has been involved in the successful development and launch of multiple Cardano projects. His primary focus is on web development and he oversees the DevOps team. This gives him a unique perspective on integrating and hosting the various components that comprise the full stack of a Cardano DApp.

Before MLabs, Neil held a variety of roles ranging from software developer to product manager and has a decade of overall experience in the software development industry.

GitHub: https://github.com/nrutledge

How does the cost of the project represent value for money for the Cardano ecosystem?

The overall cost of the project has been carefully calculated to ensure efficient utilization of resources while delivering high-quality outputs. The project proposes a comprehensive solution to a significant challenge faced by the Cardano ecosystem – congestion during high traffic loads. By creating a dedicated testnet that simulates congestion conditions, developers will have a tool to robustly test their DApps under high-stress scenarios, which in turn will result in more reliable, resilient, and user-friendly applications. This translates to an improved user experience and increased confidence in the Cardano network.

Moreover, the project offers the potential for substantial long-term cost savings. By providing developers with the ability to identify and address issues related to high-traffic loads in a test environment, the potential for costly problems to occur in the live environment is significantly reduced. This can save considerable resources that might otherwise be needed for troubleshooting, rectifying damages, or compensating users for losses in a live environment.

Finally, the community engagement aspect of the project seeks to decentralize the maintenance and hosting of the testnet, reducing the long-term costs and making it a self-sustaining part of the ecosystem. The project's cost thus represents an investment into Cardano's future, contributing to the network's scalability, robustness, and overall growth, which will more than justify the initial expenditure.