Please describe your proposed solution.

<u>Problem</u>

In the current blockchain landscape, Cardano native tokens are burdened by exorbitant listing fees on centralized exchanges. For top-tier exchange listings, fees for a single project can exceed $200,000 US dollars (excluding market making costs). This not only stifles the growth of the Cardano ecosystem as it sucks out liquidity from project funds, but also results in the concentration of value held by centralized entities; contrary to the decentralized ethos of blockchain. The need for a solution that circumvents these financial burdens on many Cardano projects and instead fosters ecosystem expansion and access to liquidity is evident.

Additionally, the vision of a cross-chain future, where communities collaborate and benefit from diverse ecosystem tools, is hindered by these financial and structural limitations. The past year has seen over $2 billion USD in cryptocurrency stolen from cross-chain bridges due to centralization risks and poor design, as reported by Chainalysis. This highlights the critical need for a secure and decentralized approach to cross-chain interactions.

<u>Solution</u>

Addressing these challenges, the Rosen Bridge presents a groundbreaking solution. It connects the Cardano ecosystem with Ethereum and other EVM ecosystems, thereby bypassing the prohibitive costs associated with centralized exchanges.

This connection not only offers enhanced liquidity and exposure for Cardano native assets in other ecosystems, but does so in a way which significantly benefis both the Rosen Watchers - Stake Pool Operators (SPOs), and the broader community. In this model, the previous financial burden of listing fees (at times exceeding $200k per project) rather remains in the ecosystem. This model is also fully transparent and auditable - a huge contrast to the way centralized exchanges operate.

The Rosen Bridge, which is operational between Cardano and Ergo on this stage, utilizes a robust 2-layer validation framework. This infrastructure is not only decentralized but also prioritizes security, positioning it as a potential leader in secure bridge frameworks within the blockchain industry. Our mission is to establish Rosen Bridge as the most decentralized and secure bridge, facilitating safe and efficient interactions between Cardano and Ethereum ecosystems.

Please define the positive impact your project will have on the wider Cardano community.

The project team’s core goals are to connect Cardano with other innovative blockchain ecosystems. Initially Rosen Bridge connects the Cardano and Ergo ecosystems. However, the same infrastructure can connect Cardano with other ecosystems such as Ethereum and EVM chains.

When successful, this will usher in a new wave of liquidity, project activity and collaboration with the broader Cardano ecosystem. Furthermore, this opens up opportunities for Cardano projects to leverage the many different tools available in other ecosystems.

Lastly, It will be a driver for additional revenue streams for SPOs and essentially their delegators as well. It has a positive ROI for the Cardano community as a whole.

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Members of this proposal and advisory team have strong experience in the blockchain sector and have delivered (and delivering) a number of successful products for the Ergo and Cardano ecosystems. The team are strong advocates of open-source technology and have examples to show for this. As such, they will continue to leverage their experience to ensure that timelines and milestones are met.

Notable examples of project delivered by key team members include:

• Ergo Blockchain, SCOREX and smarcontract.com: Alexander Chepurnoy is the core developer for the Ergo blockchain and founded various other projects. Previously worked as a researcher for IOHK.

• ERGO mining softwares, Stratum server, and ergopool - developed by Mohammad Hasan Samadani

• Delivery of the Rosen Bridge framework between Ergo and Cardano - Bridge is Live now (Check Github)

What are the key milestones you need to achieve in order to complete your project successfully?

• Research: In-depth analysis of existing EVM bridge solutions, identifying potential security risks, and understanding the unique requirements of the Cardano and Ethereum ecosystems.
• Preparation: Setting up the necessary infrastructure and tools for development, including software licenses, server costs, and other technical resources.
• Design: Development of architectural plans and protocols for the bridge, ensuring robust security and efficient functionality. This includes the creation of technical specifications and design documents.

>- Module Development: Building core components such as scanners, verification methods, and communication channels. This involves coding, debugging, and initial unit testing.

• Integration Testing: Ensuring that individual modules work seamlessly together. This includes the allocation of resources for comprehensive testing environments.
• Quality Assurance: Rigorous testing to identify and fix bugs, and to validate the functionality of the modules against the design specifications.

>- Development of Multisig Mechanism: Creating a secure multi-signature system for both hot and cold wallets, crucial for enhancing the security of cross-chain transactions.

• Security Testing: Extensive testing of the multisig system to ensure it is hack-proof and meets high-security standards.
• Integration: Seamlessly integrating the multisig system with the existing bridge infrastructure.

>- Code Integration: Merging the developed modules with the existing Rosen Bridge codebase. This includes ensuring compatibility and efficient performance.

• UI/UX Development: Designing and implementing user interfaces and user experiences for both watchers and guards, enhancing usability and accessibility.
• Final Testing: Conducting end-to-end tests to ensure all components work harmoniously.

>- Code audits

• Testnet Deployment: Launching the bridge on testnets to simulate real-world usage and identify any unforeseen issues.
• Community Testing: Engaging with the community for beta testing, gathering feedback, and making necessary adjustments.
• Documentation: Preparing comprehensive documentation for developers and users, detailing the bridge's functionality and usage

>- Mainnet Launch: Rolling out the bridge on the Cardano and Ethereum mainnets, marking the project's culmination.

• Monitoring Tools: Setting up systems to monitor the bridge's performance and security in real-time.
• Post-Launch Support: Allocating resources for immediate support and maintenance post-launch to ensure smooth operation.

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

<u>Core team:</u>

• Mohammad Hasan Samadani (Lead Developer): Lead developer for the Rosen Bridge project + SuSy Bridge (Wormhole). Holds a PhD in computer science and has over 12 years experience in security, software development, and team management. Designed various applications for the Ergo ecosystem.

• Joseph Armeanio (Project Lead): Currently a Board Member and Manager of Business Development of the Ergo Foundation.

• Daniel Friedman (Education and User Onboarding Lead): Currently an advisor to the Ergo Foundation and Co-Founder of zenGate Global. Previously, he was part of the IOHK early-founding team that helped launch the Cardano blockchain.

• Theodore Morisis (SPO and Watchers Coordination Lead): Operator of the Chef Stake Pool, community educator and Cardano Ambassador. Theodore also works as a community manager for zenGate Global.

<u>Subject Matter Experts:</u>

• Alexander Chepurnoy (Code Auditing Support): Co-founder of the Ergo Blockchain and smartcontract.com (now Chainlink). One of the first employees at IOHK, as a researcher fellow and manager for the Scorex Project. Active in blockchain since 2011 and has 20+ academic papers contributed to the industry.
• Sam Lambert (Project Management and User Onboarding Support): Co-Founder of zenGate Global. Previously, worked as a management consultant at Oliver Wyman and helped set up the Global Digital Assets practice. Worked with some of the largest banks, insurance and telecommunications companies around the world.

Please provide a cost breakdown of the proposed work and resources.

1. Milestone 1: Research, Preparation, and Design - 150,000 ADA
2. Milestone 2: Implementation and Testing of Modules - 100,000 ADA
3. Milestone 3: Implementation of Multisig Signatures - 100,000 ADA
4. Milestone 4: Integration of Modules into Current Code Base - 100,000 ADA
5. Milestone 5: Testing and Deployment on Testnets - 50,000 ADA
6. Milestone 6: Deployment on Mainnet - 50,000 ADA

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

The investment in Rosen Bridge represents a commitment to broadening the horizons of Cardano, enabling it to seamlessly interact with other major blockchain networks. This interconnectivity is crucial for several reasons:

• Increased Liquidity: By connecting with Ethereum and other EVM chains, Cardano native tokens gain access to a much larger pool of liquidity. This is vital for the growth of DeFi projects within the Cardano ecosystem, as it allows for more fluid and dynamic financial interactions.

• Enhanced Accessibility: The bridge reduces the barriers to entry for users and developers from other ecosystems. This inclusivity fosters a more diverse and robust community, leading to innovative projects and collaborations.

• Ecosystem Growth: With greater liquidity and accessibility, the Cardano ecosystem is poised for accelerated growth. It opens up new avenues for developers, entrepreneurs, and users to explore, experiment, and create value within the Cardano framework.

• Economic Benefits for Stake Pool Operators (SPOs): The bridge provides additional revenue streams for SPOs, enhancing the overall health and stability of the Cardano network. The more ecosystems are connected to Rosen, we will see more income opportunities.This is crucial for long-term sustainability and growth.