Development Fund Proposal
Author: FractiFi — submitted by Slava Zhygulin (Co-founder & CTO)
Status: Draft
Created: 2026-07-06
Label: token-asset-standards
Champion: need Champion
Abstract
FractiFi proposes an open-source Daml reference implementation of a tokenized bank-deposit template on Canton: deposit tokens with a protocol-enforced 1:1 reserve invariant, mint / redeem / transfer flows, and an on-ledger reserve-attestation pattern. The design is already validated on Ethereum — a working Sepolia testnet proof-of-concept with real on-chain transactions, a verified contract, and Merkle-based proof-of-reserves — and is ported here into Canton-native Daml. It closes a concrete ecosystem gap: token standards and reference implementations are an explicit Canton priority, and no existing Canton reference implementation demonstrates a bank-deposit token with a live, auditable backing invariant. FractiFi operates a live Canton validator (Splice, DevNet), giving the team direct operating familiarity with the target environment.
Specification
1. Objective
Ship an open-source Daml reference implementation of a 1:1-backed tokenized bank deposit — mint, redeem, and transfer contract templates plus an on-ledger reserve-attestation pattern — as reusable, documented Canton ecosystem infrastructure. Single objective: a reference implementation others can learn from and build on. FractiFi's proprietary white-label product is explicitly out of scope and is not funded by this request.
2. Implementation Mechanics
Port FractiFi's existing Sepolia DepositToken design into Daml contract templates. Where the Ethereum version uses Solidity role-based AccessControl, the Daml version uses Canton's native signatory / observer / controller authorization model. Each bank is represented as a distinct Daml party; the reserve-attestation registry is a Daml contract whose signatories are the bank party plus (optionally) an independent attestor party — giving Canton's sub-transaction privacy a genuine advantage over the public-EVM version, since counterparties observe only their own view rather than the whole ledger. Deliverables: contract templates (mint / redeem / transfer), a reserve-attestation module, a test suite, and adoption-oriented documentation (quickstart + architecture diagram) so that a third-party team can deploy and exercise the implementation from the repository alone.
3. Architectural Alignment
Implements the reference template against the Canton token-standard interfaces (CIP-0112 / Token Standard V2), so future standard upgrades are absorbed at the interface layer. Aligns with the ecosystem priorities of token & asset standards, developer experience (documentation and examples that reduce integration friction), and security & resilience (the reserve-attestation module is designed for third-party audit; an audit-readiness pass is included in Milestone 3).
4. Backward Compatibility
No backward compatibility impact — this is a new, standalone reference implementation with no existing Canton contracts to break. It is versioned against the CIP-0112 interface.
Milestones and Deliverables
Milestone 1: Design doc + prototype
- Estimated Delivery: Month 1–2
- Focus: Daml contract design (party model, authorization rules, reserve-invariant enforcement) and a working prototype on DevNet.
- Deliverables / Value Metrics: A public design document reviewed by at least one SIG member; a prototype that a third party can deploy from the repository README alone.
Milestone 2: Reference implementation + docs
- Estimated Delivery: Month 2–4
- Focus: Full mint / redeem / transfer implementation with test suite, deployed to TestNet, plus adoption-oriented documentation.
- Deliverables / Value Metrics: A named third-party team (not FractiFi) can deploy and exercise the reference implementation from documentation alone.
Milestone 3: Ecosystem adoption + audit-readiness
- Estimated Delivery: Month 4–6
- Focus: Outreach to the token-asset-standards / dapp-integration SIGs, a short technical writeup/demo for the community, and a security-audit-readiness pass on the reserve-attestation module.
- Deliverables / Value Metrics: At least one concrete adoption signal (a fork, an integration inquiry, or a SIG-hosted demo) by the milestone deadline; an audit-readiness checklist published.
Acceptance Criteria
The Tech & Ops Committee will evaluate completion based on:
- The design document reviewed and accepted by the named SIG.
- The reference implementation independently deployable and exercised by a third party from documentation alone.
- At least one concrete adoption signal (fork, integration inquiry, or SIG-hosted demo) by the Milestone 3 deadline.
- The reserve-attestation module documented to an audit-ready standard.
Value is measured by ecosystem adoption and reuse, not by artifact delivery or CI status.
Funding
Total Funding Request: 300,000 CC (proposed figure — to be confirmed by FractiFi before this proposal is marked ready for review)
Payment Breakdown by Milestone
- Milestone 1 (Design doc + prototype): 100,000 CC upon committee acceptance
- Milestone 2 (Reference implementation + docs): 100,000 CC upon committee acceptance
- Milestone 3 (Ecosystem adoption + audit-readiness): 100,000 CC upon final release and acceptance
Canton receiving party (for disbursement): [to be provided — FractiFi validator party ID]
Volatility Stipulation
Project duration is planned at approximately 6 months. Should the timeline extend beyond 6 months due to Committee-requested scope changes, any remaining milestones will be renegotiated to account for USD/CC price volatility. The grant is denominated in fixed Canton Coin.
Co-Marketing
Upon release, FractiFi will collaborate with the Foundation on:
- Announcement coordination
- A technical blog / case study on the reference implementation's design and adoption
- A SIG or community-call demo, if invited
Motivation
Tokenized bank deposits are FractiFi's core domain. Canton's Daml authorization model and sub-transaction privacy make a materially better version of the pattern possible than what exists on public EVM chains — per-counterparty visibility, native authorization, and an on-ledger attestation of backing. Rather than pitch the proprietary product (out of scope for the fund), FractiFi is scoping the underlying reference pattern as ecosystem infrastructure — the same motivation under which the fund's precedent proposals (reference implementations of settlement patterns, wallet SDKs, and similar) were supported. The team ships real infrastructure today: a working Ethereum Sepolia PoC (live demo at demo.fracti.fi) and a live Canton validator on DevNet.
Draft notes — to resolve before marking Ready for review (delete this section then)
- Confirm the Total Funding Request (300,000 CC is a proposed figure benchmarked to comparable first-time reference-implementation grants in this fund).
- Provide the FractiFi Canton receiving party ID for the disbursement line.
- Secure a SIG Champion (currently
need Champion); FractiFi's Splice / DevNet validator relationship is the natural channel.
- Confirm the legal entity name for the Author line if the Foundation requires it.
- Source code currently lives in a private repository. Either offer the Committee read access on request, or open-source the reference-implementation repo at Milestone 1 (the deliverable already implies a public repo).
