Please describe your proposed solution.

The businesses worldwide rely heavily on invoices, for managing their sales, income flows, purchases, finance, inventory, etc. There are some downsides of the current paper or electronic invoice systems, though. The major ones are security and traceability. E.g. an invoice could be easily altered or deleted after its issue, or could land in the hands of an unauthorized person. It’s also not easy to efficiently trace the invoices and payments related to them, by the company, its clients, investors, auditors or authorities.

Blockchain technology can be applied to electronic invoicing. It has the potential to revolutionize how transactions are validated, invoices issued and payments made. The blockchain has some unique properties that could be utilized to solve the current issues in invoicing. It’s immutable. Once an invoice is recorded on the blockchain, it cannot be altered or deleted. This may help maintain the integrity and accuracy of the invoice data over time. It’s traceable. The blockchain provides a complete and transparent history of all transactions, making it easy to track the flow of invoices from creation to last payment. It’s secure. The decentralized nature of the blockchain makes it extremely secure and resistant to hacking or tampering.

We will make an innovative system called CARDANO Invoice System that utilizes DiD (Distributed ID) infrastructure, Blockchain to permanently store timestamped information regarding invoices and IPFS (Content Addressable Storage), where all files stored have unique filename/hash, based on the file content. CARDANO Blockchain invoicing system will provide invoicing, auditing, payments and a secondary market for invoices.

Storing invoices on the blockchain can streamline the invoice processing and payment process, reducing the time and resources required for manual reconciliation. And, by automating the invoice process, companies can reduce the need for manual labor and cut down on paper-based processes, potentially leading to cost savings.

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

Applying the solution CARDANO Invoice System to cross-sectoral fields like data science, AI and cybersecurity can offer several benefits, like:

• Storing invoices on the blockchain can ensure the integrity and origin of data used in data science, AI, and machine learning models.
• The Blockchain technology enables secure and decentralized data sharing. In the context of data science, this can facilitate the sharing of invoice data between organizations for collaborative research or model training without compromising data privacy and security.
• Blockchain-based invoice storage can serve as the foundation for creating trusted data marketplaces. These marketplaces can enable businesses to securely sell or exchange invoice data, fostering innovation and collaboration among different organizations.
• Storing invoice data on the blockchain can simplify and enhance the auditing process, ensuring compliance with regulations and industry standards. Auditors can easily access and verify invoice records on the immutable blockchain, providing transparency and trust in financial transactions.
• Blockchain technology can be leveraged to detect and prevent fraudulent activities in invoice processing. The transparent and audit-able nature of the blockchain can help identify anomalies or discrepancies in invoice data, enhancing fraud detection capabilities and improving cyber-security measures.
• Identity systems can be applied to invoice processing, ensuring secure and decentralized access to invoice data. This can enhance cyber-security by reducing the risk of unauthorized access or data breaches, while enabling efficient data access for authorized parties.

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

As outcome of this project we should have a Smart Contract for working with business invoices and tooling for using it in the context of the Cardano Invoice System.

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

The company will present its activities and results from the project to its customers, not only in Bulgaria, but abroad, too. This will be done through information in its website, via special leaflets and e-mails to the customers and also to the Blockchain Communities via a special e-leaflet to serve as an example of implementation of digital processes in Circular economy. The result will be of interest for the Blockchain Communities around the world. Major assumptions for success of this globalized marketing approach are the wide range of potential users worldwide. The innovative idea BIS addresses the real practical needs of the market, by bringing an efficient and effective system to permanently store timestamped information regarding invoices. The project will benefit from extensive links with recent and ongoing national and international research and innovation activities, as well as coordination and support actions in Europe. We have built our business strategy based on four main steps:

1. Get test customers (banks, authorities, accountants, auditors, investors).

2. Local market and validation in Bulgaria.

3. Expansion to Balkan countries.

4. Entering the European market.

At this stage, we will closely follow the process at every location. We will conduct surveys that will help us to track user satisfaction and will be the base for future improvements. Moreover, we will conduct a promo campaign that will aim to popularize the system and to onboard new users. The campaign will be offline - promo materials, booklets, posters, and other; and online - a website with detailed information about the system, its advantages, tutorials, videos and testimonials, as well as a social media campaign that would aim to raise awareness and to promote the app.

In order to ease the process of downloading and installing the app and registering for the first time, we will provide an easy-to-follow step-by-step guide. On the other hand, for new customers we will provide assistance in onboarding, tutorials for use of the Manager suite - the administration panel, which explain all actions that can be tracked - like system maintenance, setting and others.

With CARDANO Invoice System, we will continue the strategy of promotion and dissemination by visiting forums and conferences related to Blockchain invoicing and payment solutions. We plan to participate in all local tech conferences as an exhibitor during 2023 and demonstrate the system solution via web or mobile app. Every demo and expo will be documented and communicated to the Social Media channels like Twitter, LinkedIn, Facebook, etc., as well as video sharing platforms like YouTube, Vimeo, etc. Moreover, we are developing a PR strategy that would allow us to reach more people via publications in media whose focus is on enterprise solutions, technology, fintech, research and development and science.

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

We will make a smart contract for issued invoices stored on the blockchain:

With Invoice Payment we could create and distribute a pair of NFT tokens, to Invoice Issuer a payToINV, and toPayINV to invoice Payer.

The role of the payToINV is to allow Invoice to change Address to receive the funds and toPayINV to be able to change Invoice Payer.

Use Case 1:

Company B has invoice #0050 issued on Cardano to Company C with value 30 ADA, which must be paid in 3 weeks time and to Company D invoice #0015 with value 10 ADA, which must be paid in 2 weeks, so:

Company B Wallet receives correspondingly:

- INV#0050 and INV#0015 NFTs

Company A issue invoice #00100 to Company B with value 50 ADA and date to be paid 1 month ahead of issue date on Cardano, so:

Company A Wallet receives: INV#0100

Company B sends to SmartINV#00100 contract address its ToINV#00100, [INV#0020, INV#0015] to indicate invoice payment with upcoming invoices.

• So at the time of payment the Company B would have to pay to SmartINV#0100 only 10 ADA and the invoice status would turn to PAID if both invoices were promptly paid, else it have to cover unpaid invoice and reset the unpaid state of (payToINV#0015, CompanyB.addr) for example.

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

We are developing an innovative system CARDANO Invoice System that utilizes DiD (Distributed ID) infrastructure, Blockchain to permanently store timestamped information regarding invoices and IPFS (Content Addressable Storage), where all files stored have unique filename/hash, based on the file content. The proposed system will store company invoices on IPFS and their corresponding IPFS hashes along with invoice issuer and invoice receiver signatures are stored and time stamped on the Blockchain, which ensures they are not tampered with. Access to stored invoice data could be provided to all interested parties, with an explicit request for access to either the invoice issuer or invoice receiver. They can use their signatures to provide the requested access to invoice data to these interested third parties.

Invoices will be encrypted or decrypted with corresponding users’ public or private keys registered on the Blockchain, with the help of Sidetree PKI library and the corresponding DiDs stored as Blockchain transaction metadata. Invoice participant signatures are a way of validating, acknowledging and agreeing to partake in the transaction. They will be verifiable by everyone upon request, meaning that a third party (e.g. an auditor) can validate what the agreed upon terms were at the moment of signing.

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.

The solution CARDANO Invoice System’s work plan comes in 8 Work Packages (WPs), includes BIS’s overall project management and coordination. The Project Coordinator with solid coordination with the entire project team will constantly monitor the project’s activities and outputs to ensure time and budget are optimally managed.

WP1: Integration with DiD/T1.1: Integrate our solution with Sidetree DID solutions. Duration: 3 months.

WP2: Creation of combined DID and crypto wallet/T2.1: Integration of DiD enables wallet with Crypto wallet to be able to operate with both resources. Duration: 2 months.

WP3: 3rd party secure access to invoice information/T3.1: System-level designs and integration 3rd Parties could request access to encrypted Invoices. Duration 1 month.

WP4: Invoice payments with stable coins/T4.1: Provide Invoice payments in Stable count to go through via Blockchain instead via standard bank payment. Duration: 4 months.

WP5: Smart contract for trading of invoices/T5.1: Provide Smart contract which will allow Invoice parties to trade invoices on secondary market or pay to 3rd parties with other invoices (that are still unpaid). Duration: 3 months.

WP6: Company rating system for companies/T6.1: Provide a rating system for the companies according to their invoice history. Duration: 2 months.

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

D1: DID management and access to invoice information. Outputs: DID document storage on Cardano Blockchain and will provide 3rd parties access to encrypted invoices. Sidetree DID Operation on Cardano Blockchain Invoice storage with 3rd parties’ access. Intended outcome: A tool

D2: Invoice payments with stable coins. Outputs: Payment on invoices with crypto stable coins with smart contract for trading invoices on secondary market: Smart contract and trading Application on; Wallet with DID and crypto. Intended outcome: A tool

D3: Integrated Rating system for companies. Outputs: Rating system based on Invoice information, with full decentralization of all components. Intended outcome: A tool

D4: System User Manual additional documentation. Outputs: Full user manual of the system usage and intended use cases covering various usage scenarios for the intended users as well as Developer manual for system integration into 3rd parties B2B systems. Intended outcome: User manual.

The whole project and its progress are under the monitoring of the Project Coordinator, who is going to follow the best practices in software development. Defining roles and responsibilities is an important part of a successful collaboration among team members. The Project Coordinator will ensure a good communication flow and guarantee that the project will meet all objectives on time, without budget deviations, and with high-quality results.

We are strongly committed to providing equal opportunities and will promote gender balance through various actions, e.g., dissemination plans. Gender dimension will be taken into due account in each step of the project implementation, in line with the Guidance on Gender Equality in Horizon Europe, fostering and integrating gender balance at all levels of personnel involved in the project.

Quality Management: The project team will be responsible for the overall quality assurance of the project “CARDANO Invoice System”. The quality of the project activities will be monitored by the Project Coordinator. The capacity and expertise of the team will be useful and crucial to manage potential risks in the project.

Risk Management: This will be a continuous process throughout the project’s period and addresses risk identification, analysis, monitoring, and control. To ensure a successful project implementation irrespective of unforeseen circumstances, we include a developing Risk Management Plan. The Risk Management Plan will be set up in the very beginning of the project and will be constantly updated. Changes may concern: 1) changes in the project team (a staff member, etc.); 2) changes in deliverables (nature of the deliverable); 3) changes in schedule; 4) changes in Project Information and Data Management.

The identification of the critical risks is a part of the quality control and risk assessment to help set up appropriate mitigation measures. Project risks will be managed and shared between the team. The identified risks will be monitored throughout the project and discussed during the project meetings. Each identified risk will be assigned to an expert responsible for monitoring it, and mitigation and contingency plans will be defined jointly with the Project Coordinator.

From the technical point of view, the main risk would be compromised DiD Private Keys, which will make all invoice data readable by the party with access to the private Key. This risk could be mitigated by updating DiD document with new keys and removing compromised keys, so only documents encrypted with compromised keys are temporarily exposed. In general, the responsibility of safely managing keys falls on the users of the application.

The Project Coordinator will be responsible for monitoring the risks' management process, assuring the monitoring and control of all risks that may affect the work plan and compromise the project.

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

Resource management is essential for our project. Planning, availability, and activities management, as well as resource optimization are among the key factors for the success of the project. That's why resources are an integral step in project planning. Each activity is being assigned the resources necessary to perform the project as follows:

Personnel costs: The project team has proven skills, knowledge, and capacity in the field of IoT, Blockchain and experience with EU projects, and have worked together on various projects resulting in well-established relationships and cooperation structures. All members of the team have a valid role and adequate resources to fulfil their roles.

Budget: €130000 (5 persons * 100 / h per month per developer).

Specific expenses related to the infrastructure - cloud hosting.

Budget: €10000 for one year.

Other costs for publicity / marketing plan/ promotion (online advertising)/ community engagement; project management; documentation; and reporting back to the community -

Budget: €10000

Total cost: €150 000

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

We have assembled a diverse and multidisciplinary team with many years of experience. Our team has expertise in different areas such as designing and developing software, data analysis and database design. The project is managed by Hristina Bakardzhieva (Project Coordinator) with over 15 experiences in the preparation and managing of EU projects. Hristo Koshev (Team Lead) has experience in the development of Blockchains solutions, and he is the person responsible for the architecture and design of the solution. He is involved in the development as well. Main development responsibilities are conducted by the developers’ team Vladislav Tonev, Ahmet Ahmedov, Alper Aydan, with experience in developing software and data analysis). Market research and penetration possibilities are in the hands of the Marketing Specialist Patrisia Torretti. The whole project is under the monitoring of the Project Coordinator, who is also capable of contributing to the development phase. Defining roles and responsibilities is an important part of a successful collaboration among team members. The Project Coordinator will ensure a good communication flow and guarantee that the project will meet all objectives on time, without budget deviations, and with high-quality results. We are strongly committed to providing equal opportunities and will promote gender balance through various actions, e.g., dissemination plans. Gender dimension will be taken into due account in each step of the project implementation, in line with the Guidance on Gender Equality in Horizon Europe, fostering and integrating gender balance at all levels of personnel involved in the project.

Hristina Bakardzhieva Project Coordinator https://www.linkedin.com/in/hristina-bakardzhieva-19960a72/

Hristo Koshev (Team Lead) - Blockchain developer at Quanterall https://www.linkedin.com/in/kochev/

Vladislav Tonev - Junior Developer at Quanterall- https://www.linkedin.com/in/vladislav-tonev-505b41223/

Ahmet Ahmedov Junior Blockchain Developer at Quanterall https://www.linkedin.com/in/ahmet-ahmedov/

Alper Aydan - Blockchain Developer at Quanterall, https://www.linkedin.com/in/alper-aydan-300467216/

Patrisia Torretti - Digital Marketing Team Leader at Quanterall https://www.linkedin.com/in/patrisia-torretti-6355a7193/

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

1. Integration of DID / SSI as NFT will give options for Business Owners to use Cardano Blockchain, which will boost the overall popularity and TVL on the Cardano Blockchain
2. We're going to provide Cardano users to use DiD connect NFTs to various transaction and will allow this transaction to be subject to KYC and AML requirements.
3. We're going to provide an application for storing and sharing Invoice information on the Cardano Blockchain