Please describe your proposed solution

zkFold offers to build a general-purpose zero knowledge rollup solution for Cardano. A zero knowledge rollup is a technological layer (Layer 2) on top of a blockchain that increases the blockchain’s scalability potential by compressing many transactions into transaction batches. As batches offer a greater degree of information compression, it is reasonable to expect that hundreds of rollup smart contract transactions might fit into a single Cardano mainnet transaction. Zero knowledge proofs technology places a limit on the cost of on-chain verification of the validity of transaction batches. Specifically, the batch verification fits well within the Execution Unit limits set at the protocol level, as demonstrated by the prototype created by the zkFold team (see the benchmark)

Once online, our ZK Rollup solution will offer cheap wallet-to-wallet transfers. Preliminary estimates suggest that even Cardano -> ZK Rollup -> Cardano transfers might be cheaper than wallet-to-wallet transfers on Cardano. Besides that, our zkFold Symbolic framework (funded by Project Catalyst F11) will offer developers tools to develop smart contracts for the ZK Rollup. Smart contract transactions inside the ZK Rollup will cost users a fraction of the price they pay for smart contract transactions on Cardano.

Besides benefits to the individual users, ZK Rollup reduces the total chain load so that new applications demanding high transaction throughput can thrive on Cardano.

Our ZK Rollup solution has a number of distinct features that separate it from similar solutions on other blockchains.

1. Permissionless access to updating the state. ZK Rollup can be updated by any Cardano user to ensure that the system is fully decentralized and permissionless. Users can withdraw their funds from the ZK Rollup smart contract at any time.
2. New record bar set in data compression. Other ZK rollups either utilize cheap data posting options available on other blockchains (such as Ethereum) or use third-party data availability solutions (such as Celestia). Our solution posts the full Rollup state update on Cardano but takes extra care of which data is truly necessary for permissionless state updates. Cardano already demands very efficient space usage from smart contract developers. With our ZK Rollup, this has been taken a step further, making it possible to create transactions that are just a few bytes in size.
3. High-level functional programming for smart contracts. Smart contracts for our ZK Rollup can be created using the zkFold Symbolic framework in Haskell or in any Cardano on-chain language through our upcoming UPLC Converter funded in F12.

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

zkFold will develop and implement ZK rollups on Cardano to scale it efficiently, promoting broader adoption and supporting an ecosystem of decentralized applications and services.

Overall, our proposal will have the following positive impact on the Cardano ecosystem:

1. Improved Scalability: ZK rollups enable Cardano to process significantly more transactions per second (TPS) by bundling and verifying transactions off-chain. This reduces congestion, benefiting users by ensuring faster and more efficient dApp interactions.
2. Lower Transaction Costs: By reducing the number of transactions directly processed on-chain, ZK rollups lower the transaction fees, making Cardano more accessible and affordable, especially for smaller transactions or micro-payments.
3. Enhanced User Experience: Lower fees create a smoother experience for users interacting with dApps, decentralized finance (DeFi) platforms, and NFT marketplaces.
4. Increased Adoption: ZK rollups can make the Cardano ecosystem more attractive for developers and users, promoting the growth of dApps, DeFi, and other blockchain applications by offering higher performance and scalability.
5. Maintained Security: ZK rollups allow for scalability improvements without compromising the security and decentralization of the Cardano base layer, as Cardano still plays the role of the settlement layer for the rollup transactions.

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?

zkFold is a leading innovator in L1 and L2 scaling for Cardano, specializing in zero-knowledge proofs (ZKPs) to enhance blockchain performance. As one of the strongest experts in both the Cardano ecosystem and zero-knowledge technology, zkFold is driving innovation. With a team of seasoned Haskell, Rust, and ZKP developers, the company is set to deliver on multiple Project Catalyst initiatives. zkFold’s founder, Vladimir Sinyakov, previously successfully led the ENCOINS team, launching the DApp on the Cardano mainnet. The team continues attracting new players to the Cardano ecosystem.

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

Milestone 1: Create documentation

Outputs: Well-structured documentation for the solution being developed.

Acceptance: Documentation is created and publicly accessible.

Evidence of milestone completion: We will provide a link to the documentation.

Milestone 2: ZK Rollup update validation logic

Outputs: The written code reflects the milestone’s objective.

Acceptance: The code is written and publicly accessible.

Evidence of milestone completion: The code is open-source and will be published on GitHub (<https://github.com/zkFold/>).

Milestone 3: Bridge smart contract (Plutus) for transferring funds from and to ZK Rollup

<span class="ql-cursor"></span>Outputs: The written code reflects the milestone’s objective.

Acceptance: The code is written and publicly accessible.

Evidence of milestone completion: The code is open-source and will be published on GitHub (<https://github.com/zkFold/>).

Milestone 4: Transaction aggregation server

<span class="ql-cursor"></span>Outputs: The written code reflects the milestone’s objective.

Acceptance: The code is written and publicly accessible.

Evidence of milestone completion: The code is open-source and will be published on GitHub (<https://github.com/zkFold/>).

Milestone 5: Interface for data indexers and wallets

<span class="ql-cursor"></span>Outputs: The written code reflects the milestone’s objective.

Acceptance: The code is written and publicly accessible.

Evidence of milestone completion: The code is open-source and will be published on GitHub (<https://github.com/zkFold/>).

Final Milestone: Rollup beta test

Outputs: The written code reflects the milestone’s objective.

Acceptance: The code is written, publicly accessible, and runs on the testnet as expected.

Evidence of milestone completion: The code is open-source and will be published on GitHub (<https://github.com/zkFold/>). Rollup transactions on the testnet can be found through a blockchain explorer.

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

The zkFold team consists of expert Haskell, Rust, and ZKP developers. ZKFold's team members participated in the development of several successful projects on different blockchains, including Cardano, Polkadot, and Near. The zkFold team won the EMURGO BUILD Hackathon on the zero-knowledge track and took 3rd place in the Battle of the Builders at the Cardano Summit 2023 in Dubai. Also, zkFold's Fund 11 and Fund 12 proposals have been accepted by the community, and the team is delivering milestones as promised.

Vladimir Sinyakov

Founder and CTO,

<https://www.linkedin.com/in/vladimir-sinyakov/>

Founder and protocol architect of ENCOINS. Ph.D. in Computational Mathematics. Prior experience includes five years of postdoc in applied mathematics (Control Theory), publishing in top journals in the field. Previously completed a Project Catalyst Fund 6 grant leading the ENCOINS team. ENCOINS is a DApp on Cardano that launched on the mainnet last year.

Stanislav Marycev

Co-founder, Business Development.

<https://www.linkedin.com/in/stanislav-marycev/>

Bachelor degree in Business Management. Cardano Blockchain Certified Associate (CBCA). PMP and agile professional with 12+ years of experience in worldwide IT and blockchain projects. Stanislav has experience in leading multicultural international teams (30+ countries) and working closely with top level stakeholders in finance.

Eitan Chatav

Developer

PhD in mathematics, expert in advanced mathematics and physics; probability and statistics, algebra, real and complex analysis. 5+ years of experience with blockchain, NFT, Haskell

Vladimir Morozov

Developer

B.Sc. in Applied Mathematics and Computer Science, PhD in Computational Biology. 6+ years of experience with Haskell and Python

Other zkFold’s developers will contribute to this proposal on request.

Please provide a cost breakdown of the proposed work and resources

Documentation and Project Management: 61,765 ADA

1 Technical writer @ $1,400 per month for 2 months = $2,800 (~8,235 ADA)

1 Blockchain developer @ $3,500 per month for 4 months = $14,000 (~41,176 ADA)

1 Project manager @ $1,400 per month for 3 months = $4,200 (~12,353 ADA)

ZK Rollup update validation logic: 127,941 ADA

3 Senior blockchain developers @ $3,500 per month for 3 months = $31,500 (~92,647 ADA)

1 Backend developer @ $3,000 per month for 4 months = $12,000 (~35,294 ADA)

Bridge smart contract (Plutus) for transferring funds from and to ZK Rollup: 127,941 ADA

3 Senior blockchain developers @ $3,500 per month for 3 months = $31,500 (~92,647 ADA)

1 Backend developer @ $3,000 per month for 4 months = $12,000 (~35,294 ADA)

Transaction aggregation server: 70,588 ADA

2 Backend developers @ $3,000 per month for 2 months = $12,000 (~35,294 ADA)

1 Blockchain developer @ $3,000 per month for 4 months = $12,000 (~35,294 ADA)

Interface for data indexers and wallets: 70,588 ADA

2 Backend developers @ $3,000 per month for 2 months = $12,000 (~35,294 ADA)

1 Blockchain developer @ $3,000 per month for 4 months = $12,000 (~35,294 ADA)

Rollup beta test: 41,176 ADA

2 Senior blockchain developers @ $3,500 per month for 2 months = $14,000 (~41,176 ADA)

Total: $170,000 = ~ 500,000 ADA

No dependencies.

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

The proposal requires a combination of skills spanning cryptography, zero knowledge technology, blockchain development, and Cardano smart contract programming. As we pay competitive salaries to our developers, we've arrived at the budget breakdown above. Ultimately, the project's cost is comparable to other Cardano projects of similar scale.