Daniel Nehme - Engineer, Oxford Graduate, Ex BAML (Interest Rates Swaps desk), experience in tech startups and finance.

Akos Erdos - Engineer, studied in Germany, experienced software developer including at GE, held roles in technical leadership and as technical architect.

Experience with blockchain and payments with a strong interest in the intersection of web3 and web2 financial solutions.

Project Description:

Koru is a lending protocol on Stellar that offers self-repaying loans to the underbanked.

The protocol works by locking up USDC in high-yielding DeFi protocols and paying borrowers their future yields upfront. The upfront yield is paid from a DEX pool on Stellar which benefits from the future income stream from the locked up USDC yield.

Activation Award Goal:

Koru's viability depends on accessing high-yield USDC strategies, particularly those on mainstream DeFi blockchains with high total value locked and liquidity. Currently, there is no 'out-of-the-box' non-custodial service that Koru can utilize that bridges Stellar with mainstream DeFi protocols.

The activation award focuses on building a standalone service that seamlessly integrates Stellar with USDC yield aggregators on mainstream DeFi blockchains. The service will be non-custodial to ensure users retain control over their assets and initially integrate with the DeFi aggregator Yearn. 

Problems Addressed:

1. Interoperability Issues:
   • Lack of seamless integration between Stellar and other DeFi blockchains prevents unlocking cross-chain yield opportunities and enhancing the overall DeFi ecosystem
2. Complex Asset Management:
   • Managing assets across multiple blockchains is complex and risky, complicating investment handling

Benefits:

• Interoperability: Emphasizes the future of seamless cross-chain interactions, enhancing the DeFi ecosystem’s flexibility and connectivity
• Simplicity: Simplifies the process of managing and investing assets across blockchains, making DeFi more inclusive
• Wallet Integration: Potential for wallets to integrate the yield service directly in their application for their own users

How It Works:

Stellar wallets connect to Koru, search USDC yield strategies, and seamlessly deposit and withdraw their funds at their will.

On-Chain Components:

• Koru Vault Contract on Stellar: Manages user deposits on the Stellar blockchain
• Allbridge Contract on Stellar: Bridges funds from Stellar to Ethereum
• Bridge Contract on Ethereum: Receives funds from Allbridge and interacts with the Deposit contract
• User's Smart Contract Wallet: Holds user funds and authorizes transactions on Ethereum
• Koru Contract on Ethereum: Deposits funds into the Yearn V3 vault
• Yearn V3 Vault: Investment vault where funds are deposited

Off-Chain Components:

• Transaction Executor: Monitors the Ethereum Bridge contract for received funds and submits meta-transactions on behalf of users
• Yield Strategy Service: Retrieves yield strategies from Yearn, filters them and stores them in a database
• Yield Strategy API: Returns eligible yield data
• User Interface (UI): Allows users to log in using a Stellar wallet, view yield strategies, and interact with the system

Yield Strategy Dashboard

• Data is sourced from Yearn’s yield API, processed through Koru's backend, and enriched with additional relevant information specific to Koru
• Users can browse, search, and select a yield strategy for their investments, providing a seamless experience to identify and deposit funds into preferred strategies

Yield Deposit View

• Users can select the desired amount to deposit, up to the available USDC in their Stellar wallet
• Upon clicking the "deposit" button, funds are transferred to Koru's Soroban smart contract, along with additional investment details
• User signatures activate Koru's contracts, ensuring that Koru Finance cannot execute transactions without user authorization
• Deposited funds are immediately bridged to Ethereum and transferred to the user's Ethereum wallet
• A worker job continuously monitors the wallet, and once the funds are received, they are deposited into Yearn

User Investment Portfolio View

• Koru's backend retrieves data from Stellar (via Mercury indexer) and Yearn, providing comprehensive information about the user's investments
• The frontend displays a list of deposited funds and offers an option for withdrawal, ensuring transparency and ease of access for users

Koru Withdraw Funds View

• Koru executes a series of transactions to withdraw funds from Yearn and utilizes Allbridge to transfer the funds back to the user's account
• The process updates the data on Koru's Soroban smart contract, maintaining accurate and current investment records for the user

Milestone 1: Initial Setup and Basic User Interaction

1. Project Initialization
   • Set up project repositories and initial configurations.
   • Define project architecture and component interfaces.
2. User Authentication
   • Implement user wallet connection with the Stellar blockchain.
   • Integrate Lit Protocol for creating Ethereum wallets.
   • Basic user registration and login functionality.
3. Frontend: Basic UI
   • Develop a basic frontend skeleton using React.
   • Create a simple UI for user login and dashboard access.

• Time: 2 weeks
• Budget: $8,000

Milestone 2: Yield Strategy Dashboard

1. Backend: Yield Data Integration
   • Implement worker to fetch yield data from Yearn's API.
   • Implement database for storing filtered and enhanced yield data relevant to Koru.
   • Implement backend API to retrieve filtered and enhanced yield data
2. Frontend: Yield Strategy Dashboard
   • Develop UI components for browsing, searching, and selecting yield strategies.
   • Integrate frontend with backend APIs to display yield data.
3. Testing and QA
   • Perform initial testing of yield strategy integration.
   • Conduct user acceptance testing (UAT) for the dashboard UI.

• Time: 1 week
• Budget:$6,500

Milestone 3: Yield Deposit Functionality

1. Backend: Deposit Processing
   • Implement smart contracts on Stellar (Soroban) for managing deposits.
   • Implement fund bridging logic to Ethereum using AllBridge.
   • Implement service to watch funds bridged onto ethereum and initiate deposit to yearn
2. Frontend: Yield Deposit View
   • Develop UI components for deposit amount selection and confirmation.
   • Integrate frontend with smart contract for deposit transactions.
3. Testing and QA
   • Test deposit transactions end-to-end.
   • Conduct UAT for deposit functionality.

• Time: 2 weeks
• Budget: $13,000

Milestone 4: User Investment Portfolio

1. Backend: Portfolio Data Fetching
   • Integrate Mercury indexer to fetch user data from Stellar.
   • Fetch user deposit data from Yearn via The Graph.
   • Aggregate and store portfolio data in the database.
   • Implement backend APIs to serve the aggregated data
2. Frontend: Investment Portfolio View
   • Develop UI components to display user's deposited funds and their status.
   • Integrate frontend with backend APIs for portfolio data.
3. Testing and QA
   • Test data fetching and aggregation logic.
   • Conduct UAT for investment portfolio view.

• Time: 1 week
• Budget: $6,500

Milestone 5: Withdrawal Functionality

1. Backend: Withdrawal Processing
   • Implement withdrawal logic from Yearn strategies.
   • Integrate Allbridge for cross-chain fund transfers back to Stellar.
   • Update smart contracts on Stellar (Soroban) for withdrawal tracking.
2. Frontend: Withdraw Funds View
   • Develop UI components for initiating withdrawals and displaying status.
   • Integrate frontend with smart contracts for withdrawal transactions.
3. Testing and QA
   • Test withdrawal transactions end-to-end.
   • Conduct UAT for withdrawal functionality.

• Time: 1.5 week
• Budget:$9,000

Milestone 6: Final Integration and Optimization

1. System Integration
   • Ensure seamless integration of all components.
   • Perform end-to-end testing for the entire workflow.
2. Documentation and Deployment
   • Create comprehensive documentation for the system.
   • Prepare deployment scripts and automate deployment process.
3. Final Testing and QA
   • Conduct thorough testing across all components.
   • Perform UAT and bug fixing

• Time: 1 week
• Budget:$4,000