Stellar Community Fund

By Alterscope

KYP - Risk Dashboard & Market

SCF #24

$38.4K

Legacy v5.0 Activation Award

Awarded

We provide a Soroban ecosystem dashboard, enabling the community to perform DDs on protocols and create custom risk frameworks.

Products & Services

Executive Summary

Value for the ecosystem

Platform synergy: The dashboard is engineered to synergize with Soroban's native smart contracts platform, utilizing its robust and scalable framework to deliver real-time risk assessments.

Data-driven insights: Our infrastructure processes vast datasets to provide accurate risk scores directly on the dashboard.

Direct benefits for Soroban

Attracting liquidity: The dashboard enhances the attractiveness of Soroban's ecosystem for liquidity providers due to increased risk management.

Builders empowerment: Equipping both developers and users with the necessary risk tooling to deploy risk assessed strategies and contracts.

Ecosystem health monitoring: The dashboard acts as a barometer for the health of the Soroban ecosystem, allowing to know where the liquidity/risk is exposed in real-time.

What we propose to build for SCF

Alterscope aims to craft a real-time risk overview within Soroban's growing ecosystem, highlighting dApp-specific risks. Our vision is to integrate as a core risk assessment layer, offering developers, strategists, and users easy access to detailed data on protocols, liquidity pools, or new DeFi derivative stacks. We propose to build a community dashboard for SCF to facilitate end users to research dAps and to perform due diligence on on-chain/off-chain related parameters, ranging from liquidity to security metrics. Thereby, we provide a clear look at dApps in the Soroban ecosystem, helping improve projects and attract and retain liquidity in the ecosystem.

Inspiration

“Know Your Protocol" (KYP) is a concept we have developed to emphasize the importance of understanding the intricacies of dApps. Drawing inspiration from the financial sector's "Know Your Customer" principle, KYP allows a comprehensive research of protocols. We propose using "Know Your Protocol" as the name for a dedicated tab, reflecting our commitment to offering users in-depth insights into the Soroban ecosystem.

Figure: Illustration of how a community dashboard on dApps could be embedded on the webpage of Stellar.

The "Know Your Protocol" links to a DYOR community dashboard to assess dApp-specific risks metrics. We suggest the personalized Soroban domain (https://solity.community/Soroban). Below you see an illustration of our current UI design with an overview of integrated dApps in our solution.

Figure: Illustration of frontend design for the overview of integrated dApps. We'll provide a high-level overview in a table format, comparing dApps based on predefined risk frameworks, as highlighted in the illustration below.

Figure: Illustration of an UI for the summary of protocol risks in table format (scores here only illustrative). Upon clicking on a protocol, users can delve deeper into its subcategories, such as the detailed breakdown of audit data. This approach allows for a more granular view of each protocol's risk profile while preventing information overload on the initial risk screen, ensuring a user-friendly experience.

Figure: Illustration of the audit section for a selected protocol.

dApp risk categories

We are working on various major risk categories to analyze risks and facilitate users' analysis of risks. Currently, we cover the following dApp-specific risk dimensions:

Category Metric/Aspect Description

Liquidity DEX Liquidity Assessment Volume, impermanent loss, and growth patterns

Liquidity Volume Continuity Persistence of volume flows from mean and median volume, unique wallet interactions, overall transaction count

Liquidity Protocol Analytics Protocol's trading dynamics from LP observation on 24-hour volume and TVL (in USD)

Liquidity Pool-specific Analysis Granular insights on individual pool dynamics from TVL, fees, tx count and distinct wallets besides token volume and value

Liquidity Statistical Liquidity Daily average transaction count and volume

Liquidity Lending Markets Assessment Wallet positions, loan balances, broader protocol patterns

Liquidity Liquidity Health Average score for all wallets in a protocol, influenced by borrowed money, with more debt leading to a higher influence on the average

Liquidity Market, Token and Lending Data Supply metrics, borrowed amounts in base asset, represented by each protocol and addresses

Social Channels Discord Server statistics, sentiment analysis, textual trends, and activity spread

Social Channels News Market perception and potential shifts driven by news sentiments

Social Channels Reddit Subreddit popularity, moderators count, and traction metrics

Social Channels Telegram Community size, communication patterns and intensity of daily interactions

Decentralization Autocracy Power distribution among token holders

Decentralization Participation Depth of user engagement, emphasizing each participant's voting potential

Decentralization Gini Coefficient Equity of token distribution

Tokenomics Price Manipulation Data Price dynamics, lock-up periods, and influence of major holders

Tokenomics Market Positioning Data Market cap, fully diluted valuation, core utility, and competitor standings

Tokenomics Token Circulation Data Metrics like 24-hour volume, token velocity, holder count, top-5 holder concentration

Tokenomics Value Stability Data Daily volatility, correlation data and support mechanisms

Tokenomics Liquidity Risk Data Tradeability and liquidity focusing on total supply, volume, listings and market depth

Tokenomics Token Distribution Data Decentralization of allocated token distribution

Security Audits Vulnerabilities spotlight, categorized by severity, and modifications in smart contract source code

Security Upgradability and Latest Updates Governance model overview with focus on upgradable smart contracts and proxy contracts

Security Bounty Amount, Hacks and Team Data Rewards for reporting vulnerabilities, unauthorized activities coverage, developer team transparency

Development Activities Dev Contribution Frequency of issues raised and pull requests submitted

Development Activities Engagement Promptness and activity in addressing ongoing issues

Development Activities Documentation Upkeep and clarity of provided documentation

Development Activities Dev Balance Diversity of contributions across developers

Development Activities Development Risk Regularity of development undertakings, efficacy in issue resolution, overall popularity of the repositories

Data acquisition and processing

Our high-level design system streamlines a multi-faceted public data ingestion process, differentiated in on- and off-chain data sources. Regarding, on-chain data we run our own nodes and build proprietary ETL pipeline to ensure a high accuracy and latency of data (e.g., Liquidity Risk Data). Regarding off-chain data, we built our own data pipeline infrastructure for being able to continuously gather and process relevant data (e.g., Development Activity Data from GitHub). To ensure data integrity, we run stress tests on our infrastructure and establish quality processes. Since data in our risk modules are public, dApps don’t need to opt in for realizing our solution. Standards have not yet been established for analyzing technical-fundamental risks associated with dApps and today’s risk scores lack the ability to provide objective evaluation criteria. For this reason, we emphasize transparency on how the risk scores are calculated and offer the Stellar/Soroban team to adapt the evaluation criteria according to their preferences.

Architecture diagram

The system architecture is designed to enable efficient data processing, ingestion, and management, integrating machine and deep learning capabilities with high speed data storage. The data processing utilizes Kafka for stream processing, coupled with a ML engine for risk processing, and employs an ETL process for data treatment. The system incorporates APIs to harness off-chain data from various sources, including GitHub and social media, and utilizes web crawlers for real-time data acquisition. Storage solutions are diversified, featuring for example MongoDB for structured risk parameters, ensuring robust data persistence and retrieval. The AWS is orchestrated via Kubernetes, utilizing EBS for scalaling. The frontend is made with React.js libraries to render the data in an intuitive dashboard, interfacing with the OAuth2 service for secure user authentication. Please see the attached Technical Architecture Doc.

Implementation plan

Currently, we have already implemented five chains within our infrastructure. The goal of this project is to expand our methodologies and expertise to the Stellar/Soroban ecosystem. As part of our implementation plan, we anticipate the following steps to ensure the successful delivery of this project.

Project Initialization:

Define the scope and objectives of the Stellar and Soroban integration.

Identify stakeholders on the SCF side and form a project team with clear roles and responsibilities.

Gather additional requirements

System Design:

Design the data model and API interfaces for interacting with Stellar and Soroban.

Plan the security measures in accordance with Oauth2 standards.

Development Setup:

Set up development environments and version control systems.

Establish coding standards, review processes, and continuous integration workflows.

Development:

Develop modules for Kafka stream processing with Stellar transactions.

Create the ML engine risk processing module with Soroban smart contracts integration.

Implement the ETL process to accommodate data from Stellar and Soroban.

Data Storage and Management:

Configure MongoDB for structured risk parameters from Stellar and Soroban.

Set up robust data persistence and retrieval processes for the new data sources.

Infrastructure and Orchestration:

Orchestrate AWS resources with Kubernetes for scalability and resilience.

Implement Elastic Block Store (EBS) configurations specific to Stellar and Soroban.

Frontend Development:

Develop the React.js frontend to display data from Stellar and Soroban in the dashboard.

Integrate Oauth2 for secure authentication, ensuring compatibility with Stellar and Soroban.

Testing:

Perform unit testing on individual modules.

Conduct integration testing to ensure modules work together as expected.

Execute end-to-end testing with the Stellar network and Soroban smart contracts.

Deployment:

Plan the deployment phases, including any required downtime or maintenance windows.

Deploy the system to a staging environment for live testing.

Transition to a production environment after successful testing and review.

Monitoring and Optimization:

Set up monitoring tools for system performance and security.

Optimize system performance based on real-time data and usage patterns.

Project Review and Closure:

Update technical documentation to reflect the new system architecture and features.

Review the project outcomes against the initial objectives.

Requested Budget

$38.4K

Team

The development team of 15 is led by Marijo Radman, who has more than 10 years of experience in corporate development, having worked for major German corporations such as AUDI, ZF Group, and E.ON. He has led intricate multibillion-dollar projects and managed teams of over 70 individuals in the area of electromobility and won prizes at various web3 hackathons, including Miami Wormhole, Avalanche Summit Barcelona, and ETH Amsterdam. Our development team includes senior and junior developers from top European technical universities such as Technical University Munich, Koc University Istanbul, and FER Zagreb. They bring a wealth of applied research experience from institutions like Frauenhofer IIS and IEEE, and practical experience from renowned organizations like Oracle, SAP Labs, ING, Cisco, and Dassault Systems. Our infrastructure lead Vedran Zivicnjak has over 15 years of experience in DevOps and previously built critical national IT infrastructures in telecommunications.