https://drive.google.com/file/d/1OCsgKV4HZgQhC2-P6L9kpiJ5wFRYU0d0/view

The review we received from SCF on our application had been structured in 4 sections: General, Team, Budged/Deliverables, Implementation Plan. We address your points below in chronological order:  

General

• The data we use in our risk dashboards is publicly available, but still hard to get, process and standardize. We are capturing on-chain as well as off-chain data to create a comprehensive picture of dApp-specific risks. The availability of data usually depends on how old a project is, but of course continuously grows over time. Also, the absence of certain data points serves as meaningful indicator for dApp-specific risks that common users often overlook.
• The term ‘standards' refers to risk standards as established in the traditional financial system (think of credit rating agencies or financial metrics like Sharp-Ratios, Max DD, etc.). The transferability of these concepts to decentralized economies is limited. For this reason, we enable communities to create new standards that actually fit to decentralized ecosystems. A project as here proposed can be only the first step in that direction and its aim is to empower end-users and communities first of all, by understanding risks associated with the technical fundamentals of protocols, and second, by leveraging this knowledge to come up with new solutions to manage risks. Alterscope has developed a risk tooling set so that everybody can easily set up risk frameworks according to their risk preferences and understanding and to share those with the community. By extending our approach to the Stellar/Soroban ecosystem we believe that we can represent a highly relevant tool for attracting and retaining liquidity as well as fostering interest from additional developers and contributors. 
• The dashboard will be publicly accessible, and we will provide API endpoints for developers to utilize our development. We will offer in-depth documentation, including code elements (excluding core infrastructure code) and details on how we access on-chain data, to benefit others in the Stellar/Soroban ecosystem. Additionally, we plan to develop an SDK for third-party protocol and data integration in the future (not part of this Activation project).

Team

In the description of our proposal, we incorporated the LinkedIn profiles of the key team members. Please let us know, if you would like to have any additional information on our leadership or project team. 

Budget/deliverables

Based on the feedback provided, we have refined the estimated hours for the node integration, the ETL pipeline setup, and the measurement of the ETL pipeline setup completion. Additionally, we provide an initial overview of Community Grant following the Activation Grant. Please note that the indicated Phase 2 is only a first outline and that we are more than happy to align specific deliverables and protocol integrations of a subsequent Community Grant in close collaboration with the SCF team.

Implementation plan

We have included an implementation plan (section 1.5). The goal of this Activation project is to expand our methodologies and expertise to the Stellar/Soroban ecosystem. Please note that we have already gathered significant implementation expertise on the integration of nodes, as we have already implemented five chains in our infrastructure, so that we are very confident that we can deliver this project. 

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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.

1. 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.

 

1. 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.  

2. 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

3. 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.

4. 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.

5. 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.

1. 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

2. System Design:

• Design the data model and API interfaces for interacting with Stellar and Soroban.
• Plan the security measures in accordance with Oauth2 standards.

3. Development Setup:

• Set up development environments and version control systems.
• Establish coding standards, review processes, and continuous integration workflows.

4. 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.

5. 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.

6. Infrastructure and Orchestration:

• Orchestrate AWS resources with Kubernetes for scalability and resilience.
• Implement Elastic Block Store (EBS) configurations specific to Stellar and Soroban.

7. 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.

8. 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.

9. 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.

11. Monitoring and Optimization:

• Set up monitoring tools for system performance and security.
• Optimize system performance based on real-time data and usage patterns.

13. Project Review and Closure:

• Update technical documentation to reflect the new system architecture and features.
• Review the project outcomes against the initial objectives.

https://www.alterscope.org/

https://docsend.com/view/xyzqhnnvg64svjzt

So far, we have launched our risk modeling engine by covering the Ethereum ecosystem, DeFi blue-chip protocols and are now starting to extend our approach to other emerging ecosystems, adapting our approach to chain specifics.

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Phase 1: Activation award (Setup of indexing and monitoring for Soroban)

Our proposal is to develop a blockchain-agnostic dashboard that leverages the high-performance capabilities of WASM, designed to process and present complex risk data efficiently. This dashboard is engineered to support fast indexing and data processing, essential for handling the multifaceted risks and the Lindy effect associated with the growing complexity of DeFi protocols. It aims to be adaptable across multiple networks and protocols, with the ultimate goal of deploying on the Mainnet to address real financial risks after thorough testing on integrated testnets.

Description of deliverables	How to measure completion	Estimation completion date	Estimated hours of work (H)	Required budget (USD)
Node integration	Nodes in sync with network	02/02/2024	90	7.200
ETL pipeline setup	ETL pipelines extracting, transforming, and loading  a sample data set	02/16/2024	125	10.000
Data processing setup	Real time processing through custom made statistical models established	02/23/2024	60	4.800
Frontend setup	Frontend displays graphs and charts data	02/31/2024	90	7.200
Testing & documentation	Documentation with key features published, achieve 90% test coverage	03/08/2024	115	9.200
Total		~ 6 weeks	480	38.400

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Phase 2: Community award (Protocol scale up & risk marketplace integration) 

After completing Phase 1, we will have established the foundations for indexing and integrating protocols in the Soroban ecosystem in our KYP dashboards, enabling the community to perform sound due diligences on ecosystem elements. We aim to begin by indexing key protocols in the Soroban ecosystem, facilitating a rapid accumulation of high-quality projects. The selection of protocols for indexing will be collaboratively determined with the SCF team.

This project is grounded in a community-driven approach, addressing the challenges of composability and interconnectedness. Our platform allows users to build customizable risk frameworks using over 300 parameters, a number that is continuously expanding. The strength of our solution lies in its real-time capabilities, the opportunity for community collaboration, and the ability to integrate diverse parameters from chains, protocols, and various middleware solutions simultaneously. Initially, we will develop the first risk frameworks on our platform, leveraging our domain expertise. These frameworks will then be made public and customizable for community use, fostering innovation. We are also progressing towards incorporating zk-proofs into our risk frameworks, enhancing user privacy and augmenting ecosystem protocols with greater intelligence and flexibility. We anticipate the launch of this feature by the end of 2024.

Below is an initial outline for a potential Community Grant following the Activation grant, commencing in mid-March 2024. Detailed deliverables and an implementation plan will be outlined in a forthcoming application, developed in close collaboration with the SCF team.

Description of deliverables	How to measure completion	Estimation completion date	Estimated hours of work (H)	Required budget (USD)
Indexing of leading protocols in the Soroban ecosystem	Protocol integrations in KYP-Dashboard	04/19/2024	600	48.000
Integration in risk framework tooling frontend	Integration in risk framework frontend + API access	04/30/2014	200	16.000
Integration in risk framework marketplace frontend	Integration in risk framework marketplace	05/10/2024	200	16.000
Testing & documentation	Documentation for indexed protocols, risk framework & marketplace integrations	05/15/2024	100	8.000
Total		~ 8 weeks	1.100	88.000

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Solity Network UG

Solity Network provides the infrastructure for Decentralized Finance (DeFi) to enable real-time processing of risk across chains, protocols, and liquidity pools for protocol teams and investment firms. In November 2023, Solity Network rebranded to Alterscope. Alterscope has set up presences in Munich/Germany, London/UK, and Zagreb/Croatia and consists of a team of about 20 people. Alterscope is backed by well-known web3 investors, such as IOSG Ventures, Delta Blockchain Fund, and Zee Prime Capital. Additionally, Alterscope is part of the accelerators Earlybird VisionLab as well as Consensys Scale.

The development team of 15 is led by Marijo Radman. With more than 10 years of experience in corporate development, Marijo has 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 within the realm of electromobility. Notably, he spearheaded the development of a Formula-E team that secured a win at one of the Grand Prix events, contending with teams from Audi, NIO, BMW, and Renault.

Since 2016, Marijo has immersed himself in the crypto space, with a predominant focus on DeFi. He co-founded his first web3 startup, Chaincentive, in the niche of gamification & NFTs. He won prizes at various web3 hackathons (e.g., Miami Wormhole, Avalanche Summit Barcelona, ETH Amsterdam). These achievements led to inclusion in the inaugural cohort of the Polkadot Academy, where he spent a month with Gavin Wood. Together, they delved deep into the intricacies of designing a blockchain network. Regarding his academic credentials, Marijo holds a technical degree in electrical engineering and informatics, with a focus on software robotics and machine learning. Additionally, he earned an executive MBA from the Technical University of Munich.

The Alterscope development team consists of a mix of senior and junior developers from the best European technical universities (e.g., Technical University Munich/TUM, Koc University Istanbul, FER Zagreb), with a strong track record in applied research (e.g., working at institutions such as Frauenhofer IIS, IEEE) and practical experience gathered at renowned organizations (e.g., Oracle, SAP Labs, ING, Cisco, Dassault Systems). Notably, Vedran Zivicnjak, the infrastructure lead of Alterscope, has over 15 years of experience in DevOps and previously built critical national IT infrastructures in the area of telecommunications.

Regarding Stellar/Soroban, the leadership team has been in contact with the Stellar Community Fund and the investment team of Stellar for over a year, discussing strategic cooperation. Additionally, the Alterscope development team gained practical experience with the technological specifications of Stellar/Soroban by participating in the SCF Startup Camp at the beginning of 2023.

Overview of Linkedin profiles of key project team members:

• Marijo Radman: https://www.linkedin.com/in/marijo-radman-19013220/
• Vedran Zivicnjak: https://www.linkedin.com/in/vedran-zivicnjak/
• Can Bayraktaroglu: https://www.linkedin.com/in/can-bayraktaroglu/ 
• Halil Eralp Kocas: https://www.linkedin.com/in/can-bayraktaroglu/