Please describe your proposed solution.
Our proposed solution leverages the strength of our two projects within the ecosystem. This proposal specifically focuses on concretely defining the problem space, and developing a specification and proof of concept for our solution. We may seek funding in future catalyst rounds for the full scope of developing this solution.
Kora Labs, through ADA Handles, has built a widely adopted and dead-simple social layer. With the recent work on Personalization, custom data can be attached to your ADA Handle. While this Personalization capability has to date been used to express yourself through your ADA Handle, the scope and roadmap for the feature has always been much wider. For example, with this project, this project will seek to define a standard for associating your ADA handle with, in a secure and private way, the types of information required by current financial laws (such as global Know-Your-Customer and Countering of Terrorism Financing information).
The first key components of our solution are to extend the ADA Handle personalization protocol to integrate existing DID standards, like those championed by Atala Prism, IAMX, and Proofspace. This will create a dead-simple, widespread, and easy to use DID platform for the Cardano ecosystem.
In addition, Sundae Labs, through SundaeSwap, has built a battle-hardened and widely deployed DeFi exchange protocol; with their upcoming v3 contracts, they will extend both the scalability and feature set of that protocol.
The second key component of our proposal is to leverage the ADA Handle DID capabilities to enable permissioned financial products within the SundaeSwap Protocol. Large liquidity providers will be able to add a tailored compliance layer as they create a pool, creating confidence that their liquidity is used in accordance with any laws applicable to their business, while also providing access to the broader Cardano user base.
This also opens the door for a number of other use cases, from transactions with a real-world component (such as commodities transactions), to transactions with community centric pools where projects can offer members of their community a discount on trades, just to name a few.
Both of these will result in open source artifacts that the broader Cardano community can learn from and integrate into their own protocols. That includes code for DID resolution from an ADA Handle, and smart contract code to integrate with one or more compliance oracles.
We recognize and champion the idea that the future of finance needs to be permissionless first: we’ve both spent nearly 3 years building exactly that. This proposal doesn’t replace that, but rather seeks to complement it by expanding in the spectrum of available products, allowing a more diverse set of financial activity within the Cardano ecosystem.