This proposal seeks to fund audit fees for a suite of open-source smart contracts designed to enhance Cardano’s DeFi ecosystem by improving composability and interoperability:

• Fixed Rate Pool Lending
• Governance Action Pool Lending
• Float Rate Pool Lending
• Bond Trading
• Interest Rate Swap Market
• Multi-source Oracles
• Leveraged Trading

Significant progress has been made, including initial contract designs by Danogo and partnerships with Anastasia Labs for audits. Here is the planned approach for the next phase of development.

Next Steps for Development:

• Smart Contract Auditing : Engage Anastasia Labs to conduct comprehensive audits of all contracts.
• Documentation and Developer Support: Create detailed audit report summaries for community transparency. Update off-chain tools to enhance developer experience based on feedback.
• Community Engagement and Integration: Promote audited contracts via X, Discord, and forums to drive adoption. Collaborate with Cardano dApp developers to integrate contracts, focusing on DeFi and governance use cases. Advocate for a Cardano-wide standard for auditor transparency in treasury-funded projects.

This proposal leverages Danogo’s expertise and the requested 250,000 ADA budget to deliver audited, composable contracts that drive Cardano’s DeFi and governance goals. By solving real-world development challenges, improving user and developer experiences, and fostering ecosystem growth, this initiative supports Cardano’s vision of a decentralized, interoperable financial future.

• Cardano’s composability depends on open‑source smart contracts: a dApp can integrate with another only when it can read the validator logic and datum schema. If that code is closed, developers must reverse‑engineer script hashes and cannot build the complex transactions or reference‑script adapters required for seamless interoperability.

• Publishing code safely is costly. Many teams keep their contracts private because they cannot afford the independent security audit expected of an open repository. These high audit fees act as a hidden tax on composability, splintering Cardano’s dApp landscape.

• Danogo will fully open-source a suite of “DeFi Lego” which is consist of composable, interoperable smart contracts, complete with detailed documentation and guides on Datum, and is requesting ₳250 000 specifically to cover external audits. By providing audited, reusable modules, we make it easy for other projects to plug into Danogo, build more complex DeFi applications, and strengthen interoperability across the entire Cardano ecosystem—while Danogo absorbs the development expense.

If implemented, the allocation of 250k ADA to fund audit fees for open-source smart contracts will deliver transformative benefits to the Cardano community by providing a suite of audited, reusable smart contracts that cover comprehensive lending market features, standardized oracles, and liquidity-enhancing trading mechanisms. These contracts—Fixed Lending, Float Lending, Bond Trading, Interest Rate Swap Market, Governance Action Pool Lending, Multi Oracles, and Leveraged Trading—are designed to support Cardano DeFi, enhance composability, and connect dApps, fostering a cohesive and competitive Cardano ecosystem. These audited contracts can be utilized not only by Danogo but also by the broader debt market and DeFi ecosystem, allowing other dApp developers to plug into Danogo, build more complex DeFi applications without reinventing the wheel, while Danogo covers development costs.

• Fixed Rate Lending Contract enables fixed-term deposit and fixed-rate borrowing, providing stability for DeFi users. This contract supports predictable interest rates, allowing dApps to offer loans with consistent returns, ideal for risk-averse users and institutional adoption.

• Governance Action Pool Lending Contract enables users to borrow ADA for six epochs to fund the creation of governance action, aligning with Cardano’s Voltaire-phase governance (CIP-1694). This contract empowers community members to participate in decentralized decision-making by providing accessible financing for proposal development, fostering greater engagement in Cardano’s governance ecosystem.

• Float Lending Contract facilitates floating-rate lending and borrowing, offering flexibility for dynamic market conditions. This contract enables dApps to adjust interest rates based on supply and demand, enhancing DeFi adaptability.

• Bond Trading Contract allows users trade both zero‑coupon and interest‑bearing (non‑zero‑coupon) bonds.

• Interest Rate Swap Market Contract introduces a decentralized market for interest rate swaps, allowing users to exchange fixed and floating interest rates. This feature supports sophisticated financial instruments, attracting institutional investors and increasing Cardano’s DeFi TVL.

• Multi Oracles Contract provides a standardized oracle framework that aggregates data from multiple sources (e.g., price feeds, market data), ensuring reliability and security for DeFi and governance dApps.

• Leveraged Trading Contract enables amplified trading positions, increasing liquidity and transaction volume by allowing users to leverage borrowed funds.

Mainnet Deployment of Audited Smart Contracts: Deliver fully audited, open-source smart contracts (Fixed Lending, Float Lending, Interest Rate Swap Market, Governance Action Lending, Multi Oracles, and Leveraged Trading) deployed on Cardano’s Mainnet, enabling developers to build secure, composable DeFi and governance dApps.

Timeline:

• Milestone 1: Fixed Lending and Multi-source Oracles (First 2 months)

The team will finalize the Fixed Lending and Multi Oracles smart contracts, and the auditing firms will complete audits for these contracts, producing detailed reports. Completed documentation for developers will also be prepared.

• Milestone 2: Float Rate Lending (3rd month)

The team will finalize the Float Rate Lending smart contract, and the auditing firms will complete audits for this contract, producing detailed reports. Completed documentation for developers will also be prepared.

• Milestone 3: Governance Action Pool Lending (4th month)

The team will finalize the Governance Action Pool Lending smart contract, and the auditing firms will complete audits for this contract, producing detailed reports. Completed documentation for developers will also be prepared.

• Milestone 4: Bond Trading & Interest Rate Swap Market (5th-6th month)

The team will finalize the Bond Trading & Interest Rate Swap Market smart contracts, and the auditing firms will complete audits for these contracts, producing detailed reports. Completed documentation for developers will also be prepared.

• Milestone 5: Leveraged Trading (7th and 8th month)

The team will finalize the Leveraged Trading smart contract, and the auditing firms will complete audits for this contract, producing detailed reports. Completed documentation for developers will also be prepared.

• The total budget for this proposal is 250,000 ADA, equivalent to approximately $187,500 USD, allocated to fund audit fees and related activities for the open-source smart contracts (Fixed Lending, Float Lending, Bond Trading, Interest Rate Swap Market, Governance Action Lending, Multi Oracles, and Leveraged Trading).

• The comprehensive process encompasses planning, coordinating, and executing audits for the smart contracts. The planning phase involves creating a detailed audit framework, defining review steps, and establishing a reporting structure to ensure transparency and security.

• Coordination with Anastasia Labs includes aligning on audit scope, preparing technical specifications, and producing EUTxO-focused documentation to support developer adoption.

• The execution phase covers the actual auditing by Anastasia Labs, including code reviews, vulnerability assessments, and validation of composability, with detailed reports shared with the community. This integrated approach ensures a robust, transparent audit process.

Team is composed of:

• 4 Smart Contract Developers – Responsible for the design, development, and optimization of the open-source smart contracts (Fixed Lending, Float Lending, Interest Rate Swap Market, Governance Action Lending, Multi Oracles, and Leveraged Trading), as well as preparing the completed documentation and Datum guide.

• Auditing Firm (e.g., Anastasia Labs) – Tasked with conducting comprehensive audits of the smart contracts, including code reviews, vulnerability assessments, and validation of EUTxO optimizations. The firms will produce detailed reports for community transparency and collaborate with the developer to address findings, ensuring secure and reusable contracts.

Danogo has already demonstrated significant traction within the Cardano ecosystem, currently securing over 4 million ADA in Total Value Locked (TVL) on mainnet. This adoption reflects user confidence in the platform’s capabilities and the maturity of its core offerings.

The team has successfully launched several live DeFi products, including:

• Staking Bond: A fixed-term yield product offering predictable returns
• Bond DEX: A secondary trading platform for tokenized bonds
• Yield Aggregator: Allows users to supply collateral, borrow assets, and swap tokens within a single transaction flow

All smart contracts are open-sourced: https://github.com/danogo2023

• Following initial development, the open-source smart contracts (Fixed Lending, Float Lending, Bond Trading, Interest Rate Swap Market, Governance Action Pool Lending, Multi Oracles, and Leveraged Trading) will be sustained through a community-centric and transparent model that ensures their longevity and relevance within Cardano’s ecosystem.

• The contracts’ open-source nature will enable Cardano developers globally to contribute enhancements, fix issues, and ensure compatibility with future protocol updates, fostering continuous improvement. A dedicated GitHub repository, managed by Danogo, will serve as a hub for collaborative development and community contributions.

• To support adoption, Danogo will maintain a suite of developer resources, including detailed documentation, and tutorials, ensuring the contracts are accessible and reusable across dApps. Community engagement through X, Discord, and Cardano forums will drive awareness and gather feedback to guide updates.

• This collaborative, transparent, and resource-supported approach ensures the contracts remain secure, composable, and integral to Cardano’s interconnected dApp ecosystem, advancing the platform’s vision for decentralized innovation.

• The proposal’s emphasis on open-source smart contracts to improve composability, dApp interoperability, and the security, risk, and efficiency of transactions in Cardano DeFi resonates with key priorities within the Cardano community. There is a clear community-driven interest in enhancing smart contract functionality and usability, as evidenced by ongoing discussions around improving the efficiency, accessibility, and security of Cardano’s scripting capabilities, particularly for DeFi applications where secure and low-risk transactions are critical.

• The focus on governance-related contracts, particularly the Governance Action Lending Contract, aligns with the Cardano community’s strong commitment to advancing decentralized governance frameworks. By removing the barrier of the 100,000 ADA requirement for creating governance actions through accessible, low-fee loans, this proposal enables broader participation in Cardano’s governance process. Community members, including those with limited resources, can propose improvements or create governance actions without the prohibitive financial hurdle, fostering greater inclusivity. By empowering more voices to be heard, the proposal encourages increased engagement in decentralized committees, strengthening Cardano’s Voltaire-phase governance and aligning with community-driven priorities for accessibility and participation.

• The proposal also addresses recognized challenges in smart contract composability and the need for audited contracts to mitigate risks in DeFi transactions, topics frequently explored in developer discussions and community channels, underscoring its relevance to Cardano’s ecosystem goals. These alignments demonstrate that the proposal supports the community’s vision for a more interoperable, user-friendly, secure, and decentralized Cardano network, particularly in fostering a robust DeFi ecosystem with minimized transactional risks.

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