Milkomeda

A smart contract enabled sidechain protocol bridging between virtual machine based, layer 1 chains and Cardano. Interchain operability with a seamless UX.

The sidechains built by the Milkomeda team act as blockchain bridges, enabling cross-chain interoperability between Cardano and some of the most popular layer 1 blockchain solutions and the dApps built on them. These sidechains are building on top of Cardano and, while enabling interconnect-ability between blockchains and the porting of projects from one chain to another, they will use wrapped ADA, called milkADA, as their native currency.

MilkADA is needed to pay fees and gas for transactions executed on the sidechain. These sidechains are run by validators who will initially be made up of a small group of Cardano stake pool operators, SPOs. Eventually, governance of these sidechain protocols will be undertaken through a DAO that is run on the Cardano mainnet.

Milkomeda sidechains will allow developers to write smart contracts in languages that are familiar to them e.g. Solidity, and deploy them across multiple chains. Meaning that developers don’t have to learn the functional programming languages of Haskel and Plutus to build on Cardano, decreasing the barrier to entry for developers and increasing the developer pool for Cardano.

The First Sidechain: M1

The first Milkomeda sidechain is an Ethereum Virtual Machine, EVM, based sidechain called M1. This sidechain has opened up the Cardano ecosystem to developers of the most popular smart contracting language, Solidity. Wrapped ADA, milkADA, will be the native currency of this sidechain and will be required to pay fees and gas for using the sidechain.

ADA transferred to the M1 sidechain for wrapping will be auto-delegated to stake pools, meaning that the sidechain works in synergy with the Cardano mainnet.

Wrapped Smart Contracts

A novel feature of the Milkomeda protocol is that of wrapped smart contracts. A dApp, or anyone at all, can deploy a smart contract to the sidechain from a connected virtual machine, VM, blockchain. This makes the smart contract available users of Cardano who can then interact with this smart contract through the sidechain. This means that users of Cardano can seamlessly use smart contracts that are built on other chains and written in coding languages other than Plutus.

Wrapped smart contracts opens up the smart contracting capabilities of chains that don’t use the Solidity programing language e.g. Cardano, Algorand, Solana, and Terra, to Solidity developers.

The Developer Experience

The wrapped smart contract functionality of the Milkomeda sidechains means that smart contracts only need to be deployed once, meaning that they don’t need to be recoded into other languages to work on other chains. The advantage of this is that there is less code, and that only one set of code needs to be audited. Reducing the quantity of code required to run cross-chain dApps resulting in fewer vulnerabilities for hackers to exploit and results in a quicker-to-market time for developers.

The User Experience

As far as the user experience goes, users can use smart contracts on the sidechain without leaving the Cardano mainnet; making for a seamless user experience. The user creates a transaction with their assets, as they would normally, and submits it to the network.

Under the hood, these assets are then transferred to the sidechain where they interact with the target dApp. The results of the transaction are then deposited in the user’s wallet on the Cardano mainnet. All of this happens under the proverbial hood, meaning that the UX doesn’t change, even though the users is interacting with a dApp outside of the Cardano mainnet.

The “Milkomeda” name is derived from the collision of the Milkyway and Andromeda galaxies.

Sidechains as Blockchain Bridges

The Milkomeda sidechain allows for the porting of projects from one blockchain to another, exposing these projects to another group of users and increasing that project's potential user base. Users who have tokens on the connected chain can move these assets to Cardano, and vice-versa, by simply wrapping them on the sidechain that links the two blockchains. Once wrapped these tokens become native assets on the Cardano mainnet and work just like native assets do on Cardano.

The virtual machines that can be connected to Cardano using the Milkomeda protocol include:

The Ethereum virtual machine (EVM)
Facebook’s Move VM
Solana VM
Flow/Cadence
Hyperledger Fabric
Quorum
Near VM

DAO Governance

The sidechains will be governed collectively by their users. This will be done on Cardano through the Milkomeda DAO, meaning that users must use the Cardano network to participate. Users will be incentivized to vote through rewards and can vote on a variety of network parameters and, importantly, on the addition and removal of validators. Aspects managed by the DAO include:

Addition or removal of validators
The launch of new sidechains
The reduction or increase of required collateral amounts
Punishment of malicious validators
Spending treasury funds to fund the growth of existing sidechain ecosystems
Deciding which stake pools the wrapped ADA is delegated to
Accepting tokens onto the sidechain (by adding them to the sidechain’s token registry)
Verifying and accepting new wrapped contracts (after audit by developers)

Validators

The validators are the block producers for the sidechain and are added and removed by votes undertaken in the Milkomeda DAO. The list of validators will be stored on the Cardano mainnet. The initial validators are a handpicked subset of existing Cardano SPOs. Validators are required to put up collateral to become a validator for the sidechain. If they are determined to be bad actors this collateral is slashed.

Validators are also tasked with the running of the sidechain bridge, which is what enables the transferring of assets and allows for the calling of smart contracts stored on the sidechain by users of Cardano and other blockchains.

Validators are paid out every week from the treasury. Their payments are put into smart contracts and locked for two weeks.

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Layer 2 Solutions

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Wrapped Smart Contracts

Wrapped Assets

Blockchain Bridge

DAO

Non-custodial

Cross-chain

Sidechain

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builtoncardano

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Glossary

Plutus

Plutus is the smart contract platform and language of Cardano and is written in the functional programming language of Haskell. The Plutus platform is used to write and release smart contracts to the Cardano blockchain.

There are multiple tools for learning how to use Plutus to create smart contracts on Cardano. Some of them are official and released by IOHK but many have been made and open sourced by community members.

DAO

If a project on Cardano operates with a DAO that you’ll find it tagged and listed on this page. All of these Cardano DAO projects have, in some form or another, incorporated or plan to incorporate a DAO. Not all of them will be full autonomous and this may be for one of many reasons, be it that features are being released gradually, that they will never actually be a full and proper DAO (and this a debate for another time).

There are specific Cardano DAO projects listed here, and these are those that operate as a full DAO, who’s direction is guided by the votes of its members. Others on here are projects and protocols built on Cardano, and these can take various forms, including: DeFi projects, NFT projects, and gaming projects.

Regarding full Cardano DAO projects, these have been created around many different topics, the most popular being Cardano investment DAOs that invest in Cardano NFTs and tokens. However, there are other DAOs focused around things such as the development of open-sourced tooling, the growth of the DAO idea itself, and art.

Cross-Chain

The protocols and projects tagged here are interoperable with one or multiple other blockchains. Projects with this tag include those that provide the infrastructure of this inter-chain-operability, such as the providers of blockchain bridges, or they could be protocols or projects that operate across multiple chains by utilizing these blockchain bridges. There are also projects that can be cross-chain without these blockchain bridges, however these usually rely on a 3rd party, custodial entity to facilitate this, instead of a trustless, blockchain bridge.

Blockchain Bridge

Blockchain bridges allows you to port assets from one chain onto another, allowing those assets to represent their value and be used on a different chain. Most blockchains are not compatible with each and blockchain bridges bring much needed interoperability between chains by allowing for the psuedo-transfer of assets from one to the other.

Blockchain bridges work by first locking up the asset on its home chain, done by sending the asset to a designated address or smart contract. Once this lockup has been confirmed the protocol or company then mints a synthetic asset, representing the locked asset, on the target chain. The locking up process provides assurance that the asset on the target chain is always backed by the asset on the original chain.

These bridges can be both one-way and bidirectional. One-way bridges only allow you can to send assets in one direction e.g. from Ethereum to Cardano, and not from Cardano to Ethereum. Note that you can always unlock the locked up asset by returning synthetic asset to the bridge. One-way, in this sense means that you cannot lock up assets on the other chain, Cardano in our example, to be used as synthetic assets at the other end of the bridge. Bidirectional blockchain bridges allow you mint synthetic assets on both chains.

Blockchain bridges can be custodial, where the assets are stored by a trusted 3rd party, or non-custodial, where the assets are locked up in a smart contract. Non-custodial blockchain bridges, utilizing code and smart contracts to secure assets instead of a middleman, are championed as being more aligned with the ethos of decentralization.

Audit

Audits are incredibly important in the decentralized and blockchain world and audits are completed on a platforms code, typically by 3rd parties, to ensure that that code is as watertight as possible. Conducting audits before releasing product is a best practice technique and can expose flaws in a protocol before that protocol is released to the public, allowing developers to fix them so that they cannot be exploited by hackers.

When we run on the mantra that “Code is law” then that code needs to be secure so that everyone can be sure that their tokens are safe in the protocols and platforms they’re using. The projects tagged with audit are those that offer or conduct audits on platforms and projects in this space.

The First Sidechain: M1

Wrapped Smart Contracts

The Developer Experience

The User Experience

Sidechains as Blockchain Bridges

DAO Governance

Validators

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