Project Overview

Photrek and its partners will deliver technical and governance tooling to facilitate the development of a Cardano Layer 2 (L2) toolkit for integration of beneficial AI into intelligent contracts. Early blockchain pioneers envisioned smart contracts as a pathway for code to serve as law. However, as Gödel famously proved, no system of rules can simultaneously achieve completeness and consistency. Biological organisms solve this limitation by regulating boundaries and creating coherent signaling across layers, such as a cell’s membrane or an organism’s skin. Likewise, Cardano must define layered boundaries to maintain consistency in human agreements while integrating AI capabilities.

Photrek in collaboration with selfdriven Foundation and F1R3FLY.io will develop a Layer-2 infrastructure toolkit that embeds Beneficial AI capabilities. In this context, “beneficial” refers to the necessity of ensuring security risk guarantees that protect communities from potentially harmful AI actions within well-defined scopes of authority. Core L2 components such as Hydra, Partner Chains, and Mithril will be evaluated against the needs of Intelligent Contracts. Where appropriate, developments within the Midgard and Midnight ecosystems will be leveraged to support the utilization of beneficial AI capacity.

Key Contributions from Team Members

Photrek will lead the project’s vision and mission, spearheaded by Kenric Nelson. Megan Hess will oversee project management, with technical development led by Maciej Nowosielski and Ken Stanton. Governance design will be coordinated by Juana Attieh. Photrek will engage with AI projects launching on Cardano, including Masumi and the Decentralized Intelligence Network (DIN), to gather requirements for guiding L2 development priorities.

selfdriven Foundation will develop architectures for regenerative approaches to hosting Beneficial AI, drawing from research on beneficial transaction consensus frameworks and community self-governance principles. Inspired by Elinor Ostrom’s work on managing commons (Ostrom, Elinor, 2014), selfdriven will support experiments in self-governing, interlocked circles, and reputation-based community marketplaces using quadratic voting.

F1R3FLY.io will focus on integrating the MeTTaCycle Network (F1R3FLY.io, 2025) with Cardano’s L2. MeTTa (Meta Type Talk) (Goertzel et al., 2023) is a meta-programming language designed for encoding knowledge and control structures compactly to facilitate symbolic reasoning and learning. F1R3FLY.io will:

• Compile a version of MeTTa to the Cardano node, enabling cognitive reasoning for constructing Intelligent Contracts.
• Develop smart contract capabilities on MeTTaCycle, providing demonstrable use cases for Cardano’s ecosystem.

Use Case: Intelligent Contracts for AI Service Agreements

To illustrate the potential of intelligent contracts on Cardano L2, the project will showcase a practical use case where SingularityNET’s MeTTa language facilitates an agreement among three parties:

1. AI Service Provider: Offers an AI model for predictive analytics.
2. Service Users: Organizations or individuals accessing the AI model.
3. Community Constraints Layer: Ensures the use of the model aligns with community-defined beneficial standards.

Process:

• Initialization: Users propose a predictive model request.
• Agreement Formation: MeTTa constructs a symbolic reasoning contract evaluating conditions such as model accuracy, data privacy guarantees, and community benefit compliance.
• Execution: The contract runs on Cardano L2, dynamically adjusting parameters as data and usage evolve.
• Adaptation: Community feedback can update constraints through quadratic voting, sociocratic consent, or related consensus methods.

Cyclical Development Approach

The Intelligent Contracts L2 project follows a cyclical development process, as shown in the figure. These requirements feed into a beneficial transaction framework incorporating social reasoning, ensuring broad community benefits. The cyclical process includes:

1. Community Input: Developing requirements through engagement with stakeholders.
2. Framework Design: Creating transaction consensus structures with beneficial security guarantees.
3. Technology Development: Translating frameworks into deployable L2 tools.
4. Deployment & Feedback: Demonstrating intelligent contracts and refining them based on feedback.

Diagram 1: https://docs.google.com/presentation/d/1131vK5ycuJZytkflsiIoeiaEsQRewWe8HMzTJQzwUkg/edit#slide=id.p

Governance and Technical Integration

The Intelligent Contracts L2 Toolkit is designed to merge advanced governance with technical innovation, ensuring Cardano remains a leader in integrating beneficial AI. Governance within the toolkit emphasizes transparency and adaptability, drawing inspiration from Ostrom's principles of commons management. Communities will play a pivotal role in shaping transaction frameworks, fostering a balance between autonomy and collective accountability. Governance methods will draw upon advances in reputation management, sociocratic consent, quadratic voting, and related methods (Nelson et al., 2024) that assure broad integration of information.

On the technical side, the toolkit leverages Cardano's modular architecture, incorporating Hydra for scalability, Mithril for lightweight verification, and partner chains for domain-specific processing. By integrating F1R3FLY.io's work with MeTTaCycle, the system will support intelligent contracts capable of incorporating symbolic reasoning and adaptive learning, crucial for managing complex agreements.

The fusion of governance and technology ensures that Intelligent Contracts are not merely automated but are also context-aware, aligning with Cardano's vision for a self-governing, decentralized ecosystem.

Conclusion

Cardano is positioned as a top brand in blockchain, known for its technical and governance excellence. Expanding into Beneficial AI through intelligent contracts will enhance these strengths. By integrating MeTTaCycle’s cognitive reasoning with Cardano’s L2, the project offers a unique approach to managing complex agreements, fostering a secure, collaborative ecosystem. Photrek, selfdriven Foundation, and F1R3FLY.io will collaborate to deliver a comprehensive toolkit, empowering Cardano to lead in Beneficial AI integration for intelligent contracts, setting a precedent for ethical, self-actuating blockchain communities.

References

F1R3FLY.io. (2025). MeTTaCycle Architectural Proposal. F1R3FLY.io. https://github.com/F1R3FLY-io/MeTTaCycleYellowPaper/blob/main/map.pdf

Goertzel, B., Bogdanov, V., Duncan, M., Duong, D., Goertzel, Z., Horlings, J., Ikle’, M., Meredith, L. G., Potapov, A., de Senna, A. L., Suarez, H. S. A., Vandervorst, A., & Werko, R. (2023). OpenCog Hyperon: A Framework for AGI at the Human Level and Beyond. https://doi.org/10.48550/ARXIV.2310.18318

Nelson, K., Hansen, E., Battle, N., Macurdy, S., & Tran, N. (2024). Sociocratic Pluralism governance for blockchain ecosystems (SSRN Scholarly Paper 4911180). https://papers.ssrn.com/abstract=4911180

Ostrom, Elinor. (2014). Beyond Markets and States: Polycentric Governance of Complex Economic Systems. In Elinor Ostrom and the Bloomington School of Political Economy: Polycentricity in Public Administration and Political Science (Vol. 1). Lexington Books.

Cardano has an urgent need to accelerate the development of layer 2 (L2) capabilities which enhance the ability of the community to support a variety of use cases. The integration of artificial intelligence (AI) into the Cardano community with guarantees regarding benefits to the community, humanity at large, and the planet is particularly important and challenging. Beneficial AI Partner Chains, Hydra, and other L2 solutions require exceptional capabilities in scaling, security, and governance.

Developing well-defined Intelligent Contracts L2 (ICL2) Toolkit requirements for Cardano will provide a strategic foundation for scaling, efficiency, and interoperability, benefiting multiple stakeholders within the ecosystem. Developers will gain clear specifications for building L2 solutions, accelerating innovation and adoption. DApp teams will experience reduced friction with integration, leading to faster deployment of scalable applications. Overall, the Cardano ecosystem will benefit from increased network transactions, adoption & onboarding of new developers and community members into the ecosystem, and wealth-sharing capabilities.

Cardano is the international leader in UTXO-based smart contracts. The ICL2 project will establish Cardano as the leader in leveraging Beneficial AI to create intelligent contracts that integrate developer, user, and community requirements. Cardano has a long-standing partnership with SingularityNET, which is now part of the Artificial Superintelligence Alliance. Masumi is an agent marketplace being developed within the Cardano Community in partnership with Serviceplan Group, one of the largest European companies. These are just two of many communities accelerating a trillion-dollar industry advancing inorganic intelligence. Given a beneficial AI capability, Cardano community members would be able to integrate that capability into their production of artwork NFTs, advancement of network code development, governance agents to support community decision-making, and many other applications. Providing secure access to the AI industry will provide a significant return on investment for the Cardano community by increasing adoption and network transactions, facilitating the onboarding of new developers, and expanding the scope of the type of intelligent contracts the network can host.

Milestone 1: Toolkit Scope and Community Alignment

• Objective: The first objective is to map out the scope of the toolkit’s intended functionality to guide the development process. Initial use cases to be selected from include training and using an AI model to check the uniqueness of NFT artwork, letting an LLM sign off on the alignment of a proposal with a circle’s goals, mapping people’s work to a semantic vector space where proximity could indicate connections between what people are doing, or paying for MeTTaCycle AI resources with Cardano smart contracts. Documenting the alignment of goals and spending time on a shared technical strategy between the different organizations in this group (with community feedback) will indicate the viability of this proposal’s future performance.
• Deliverable: A report outlining the scope of AI smart contract capabilities to be included in this toolkit, and indicating that participants have a shared goal and understanding of how these capabilities should be mapped to a Cardano L2 solution.

KPIs & Targets: KPI 1.1: Use Case Definition Description: Confirm and document high-priority AI use cases for Cardano L2 integration.

Target: Minimum of 3 clearly defined use cases, each with a mapped technical requirement and Cardano L2 alignment.

KPI 1.2: Contributor Alignment Description: Facilitate cross-team collaboration between Photrek, selfdriven Foundation, F1R3FLY.io, and others to confirm shared development goals.

Target: Conduct 2 alignment workshops or strategy sessions with all core contributors.

Output: Shared technical strategy document signed off by all core teams.

KPI 1.3: Community Feedback Integration Description: Gather feedback from the Cardano community on proposed AI use cases and toolkit direction.

Target:

• Survey with at least 10 community respondents across roles (DReps, devs, SPOs, etc.)
• Conduct a stakeholder roundtable

Milestone 2: Beneficial Constraints on AI in Specific Contexts

• Objective: Define the constraints of the system. How can we ensure that AI integrations into smart contracts don’t step outside the bounds of what developers intend when integrating with our toolkit? Can we help users of these contracts understand the risks and limits of these AI integrations? We need to define how AI capabilities can be constrained to act beneficially within a given context and under specific conditions. Develop our strategy for how the MeTTa reasoning language (as the first reasoning language) should best be integrated with Cardano smart contract and scalability solutions.
• Deliverable: A report on the constraints required for beneficial AI transactions within well-defined scopes of control, and our MeTTaCycle integration strategy. KPI 2.1: Beneficial Constraints Framework Description: Define how AI behavior should be safely constrained within smart contracts.

Target: Publish a framework identifying at least 2-4 constraint models (e.g., scope limitations, explainability requirements, feedback triggers).

Criteria: Models must include both technical rules and governance safeguards.

KPI 2.2: MeTTa Integration Strategy Description: Develop a technical strategy for integrating the MeTTa reasoning language with Cardano’s L2 infrastructure.

Target: Deliver a MeTTa integration plan that outlines:

• How MeTTa will interact with smart contracts
• Key system components (e.g., interface layers, data flow)
• Security or sandboxing measures

KPI 2.3: Community Review and Validation Description: Gather input from Cardano developers, governance experts, and AI researchers on proposed constraint models and MeTTa strategy.

Target:

• Conduct a feedback session (forum or workshop)
• Document stakeholder responses in the final report

Milestone 3: Design Toolkit

• Objective: We will create a detailed plan for both the user-facing design and how it should map to the underlying technical details of this toolkit’s interface with Cardano and MettaCycle. Performance will be indicated by the ability to use this design to conceptually model the desired capabilities documented in Milestone 1, and the security guarantees established in Milestone 2.
• Deliverable: The design document for the ICL2 toolkit outlining the considerations that went into our choice of interface.

KPI 3.1: Functional Requirements Mapping Description: Translate use cases and constraint models into Version 0.1 toolkit features.

Target: Create a requirements matrix mapping 5+ core functions (e.g., contract constraints, MeTTa integration, interface workflows) to use cases and constraints from Milestones 1 & 2.

KPI 3.2: System Architecture & UX Design Description: Define both the backend architecture and the developer-facing interface.

Target: Produce a comprehensive design document with:

• System-level diagram (backend components, Cardano & MeTTaCycle interfaces)
• Developer UX flowchart or API schema for using the toolkit

KPI 3.3: Conceptual Modeling of Use Cases Description: Demonstrate how the toolkit design supports real-world scenarios.

Target: Create a conceptual mock workflow (e.g., AI-NFT contract, governance agent, payment contract) showing how the toolkit enables them within defined constraints.

Milestone 4: Build Toolkit

• Objective: Develop the essential components of the toolkit to the point where they are ready to be tested and refined in the next stage, particularly those that allow MeTTa to perform AI reasoning within the Cardano environment. Usable code output coupled with some documentation will indicate that we’re making progress in this stage.
• Deliverable: A functional ICL2 toolkit prototype with MeTTa integration, and basic guides for developers.

KPI 4.1: Functional Prototype Delivery Description: Develop a working prototype of the ICL2 toolkit with initial MeTTa integration.

Target: Deploy a functional prototype that enables a core use case flow (e.g., NFT validation contract, AI reasoning for governance agent).

KPI 4.2: Core Component Implementation Description: Build the toolkit’s foundational modules.

Target: Implement at least 2 major components, such as:

• MeTTa contract interface module
• Constraint enforcement logic
• Developer API or CLI tool for smart contract deployment

KPI 4.3: Developer Documentation Description: Provide clear setup and usage instructions for early adopters.

Target: Deliver basic documentation including:

• Installation and setup guide
• Quickstart tutorial for deploying a sample intelligent contract
• 1–2 annotated code examples

Milestone 5: Testing and Demonstration

• Objective: Show the toolkit in action through practical examples of AI contracts, gathering feedback on its usability and effectiveness. This will allow us to surface and work on any bug fixes and refinements that need to be made.
• Deliverable: Working AI contract demonstrations of toolkit use, and a report on testing and feedback received, with some details on the refinement process.

KPI 5.1: Demonstration of Working AI Contracts Description: Showcase real use cases to demonstrate the toolkit’s capabilities.

Target: Build and present a working AI-integrated smart contract

KPI 5.2: Community Testing Sessions Description: Invite developers and community members to try the toolkit and provide hands-on feedback.

Target:

• Host a public testing event/workshop
• Recruit 5+ testers with varied technical backgrounds

KPI 5.3: Testing & Usability Report Description: Summarize testing outcomes and how they informed improvements.

Target: Publish a public-facing report covering:

• Summary of demos and test results
• Feedback highlights and response actions
• A roadmap for next steps

Milestone 6: Finalize and Plan

• Objective: Summarize what was achieved and learned. Polish the toolkit based on our findings in the previous stage, and discuss future steps for advancing beneficial AI and governance on Cardano.
• Deliverable: Comprehensive final report, and the finalized toolkit with documentation and examples. KPI 6.1: Final Toolkit Release Description: Deliver a stable, polished version of the ICL2 toolkit ready for community use.

Target: Release v1.0 of the toolkit

• Include complete documentation (install guide, API reference, user examples)
• Include at least 3 tested and documented contract examples

KPI 6.2: Comprehensive Final Report Description: Summarize the full project lifecycle, outcomes, and lessons learned.

Target:

• Publish a final report
• Include sections on: objectives achieved, stakeholder feedback, technical insights, and refinement decisions

KPI 6.3: Outreach & Presentation Description: Share final results with the wider community and ecosystem partners.

Target:

• Present results in a community town hall or developer showcase
• Make final outputs available on Intersect, GitHub, and public forums
• Publish a roadmap for future toolkit development or phase 2

Budget Allocation Across Milestones

Milestone 1: Toolkit Scope and Community Alignment – $60K (₳ 120K) Research-intensive phase, requiring engagement with AI and blockchain experts, Cardano stakeholders, and documentation efforts.

Milestone 2: Beneficial Constraints on AI in Specific Contexts– $75K (₳ 150K) Deeper technical research and AI framework definition, involving integration planning with MeTTa.

Milestone 3: Design Toolkit – $90K (₳ 180K) Involves detailed system architecture planning, governance considerations, and technical design.

Milestone 4: Build Toolkit – $120K (₳ 240K) Largest cost segment as it involves engineering and development of functional prototype components.

Milestone 5: Testing and Demonstration – $60K (₳ 120K) Testing phase with developers, documentation, and initial feedback-driven improvements.

Milestone 6: Finalize and Plan – $45K (₳ 90K) Wrap-up phase, producing the final report and defining next steps for scaling AI governance.

Budget Breakdown by Category

Engineering & Development: ₳ 405K (45%) Includes backend and smart contract developers, AI engineers, and integration specialists.

Research & Analysis: ₳ 180K (20%) Covers AI requirements gathering, governance model research, and feasibility studies.

Project Management & Operations: ₳ 90K (10%) Coordination, milestone tracking, risk management, and administrative needs.

Customer & Developer Engagement: ₳ 90K (10%) Includes documentation, onboarding support, and usability feedback gathering. Testing & Quality Assurance: ₳ 90K (10%) Ensuring security, performance testing, and real-world validation of AI contracts.

Reporting & Future Planning: ₳ 45K (5%) Documentation, summary of findings, and outlining next steps for AI in Cardano.

Photrek, selfdriven Foundation, and F1r3fly.io will employ a team of designers, developers, and customer engagement specialists for a one-year period to execute the ICL2 project.

Project Functions: (Estimated Man-Months to be Added) Engineering & Development Research & Analysis Project Management & Operations Customer & Developer Engagement Testing & Quality Assurance

Photrek has pioneered Risk Governance capabilities through innovations in Risk-Aware Machine Intelligence, Sociocratic Pluralism Governance, and Environment Justice research. A few of Photrek’s accomplishments include:

• First SingularityNET Deep Funding team to launch an application on its AI Marketplace. Photrek’s Risk Assessment app was utilized to assess algorithms for Deep Funding’s first hackathon.
• Pioneered design of Sociocratic Pluralism for Blockchain Governance aspects of which are being implemented by the Cardano Catalyst and SingularityNET Deep Funding team.
• Photrek is the lead developer for SingularityNET Deep Funding’s Reputation system.
• Photrek is completing testing for the AI Assistant for Cardano Governance funded by Catalyst Fund 12.

selfdriven Foundation

The selfdriven Foundation provides frameworks & services to help communities self-actuate. The selfdriven Foundation is highly active within the Cardano ecosystem and has a deep understanding of both the community social and network technology layers. The team has extensive and broad experience;selfdriven.foundation/team. This experience includes formal research capabilities.

https://selfdriven.foundation/team

In the context of this project, we will be providing services that cover key concepts in the following diagram, including:

• Research into application of Beneficial Transaction Consensus Frameworks within self-actuating communities. e.g. Cardano
• Delivery documents:
  • Research outcomes
  • Technical research guidance document - that can be easily consumed by technologists (II & OI)

The selfdriven Foundation has worked with the Intersect MBO to delivery an governance education kit: https://docs.selfdriven.foundation/intersect-education-kit

F1r3fly.io

F1R3FLY.io is a pioneering technology group dedicated to accelerating the integration of Beneficial AI within decentralized ecosystems. With a focus on innovative development and practical implementation, F1R3FLY.io is the lead developer for MeTTaCycle, an L0++ network hosting SingularityNET’s OpenCog Hyperon capabilities. F1R3FLY.io has pioneered the use of rho-calculus to advance cognitive architectures for beneficial AI.

As a key contributor to the Cardano L2 Requirements and Development for Beneficial AI proposal, F1R3FLY.io brings expertise in bridging advanced AI frameworks with blockchain technology. In the short term, F1R3FLY.io is committed to compiling a version of MeTTa, a powerful meta-language for AI reasoning, to the Cardano node. This initiative aims to demonstrate the feasibility of integrating advanced reasoning capabilities directly within the Cardano ecosystem.

Looking ahead, F1R3FLY.io plans to expand Cardano’s smart contract functionalities by enabling MeTTa and Cycle to operate seamlessly on the network. This medium-term goal is designed to enhance the expressive power and adaptability of Cardano’s smart contracts, paving the way for sophisticated, ethically governed AI systems.

Photrek is developing a long-term vision to transition to a Benefits Corporation focused on Risk Governance. Our Intelligent Contracts Layer-2 proposal is part of a larger initiative to pioneer risk management capabilities for blockchain communities. Photrek has and will continue to develop ongoing support related to this initiative with the Cardano, SingularityNET, and AI communities.

Photrek and its partners are active members of Intersect. Through our committee engagement we are aware that development of Layer-2 toolkits is a critical component of Cardano’s growth strategy. Juana Attieh serves as an observer to the Intersect Board. Nelson is a participant in the Governance Tooling WG and an observer to the Product Committee. Nelson has reviewed the plan to advance the Layer-2 capabilities using beneficial AI with the Product Committee and through the Budget Committees public forums. Mark Byers was a founding member of the Membership & Community Committee and acted as a co-chair. He was also a member of the interim steering committee.

Patrick Tobler, founder of Masumi, and Matt Iklé, Chief Scientist of SingularityNET, have provided Letters of Support expressing the value of Photrek’s initiative in advancing the ability to apply AI to the development of Intelligent Contracts.

There are no blocking dependencies for this proposal;however, we will be collaborating with other community members pushing Cardano’s L2 capabilities forward.