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MLabs Helps Indigo Synthesize Real-World Assets on Cardano

March 8, 2023

Cardano dominates the blockchain financial instruments space with security beyond reproach.

DeFi protocols building on the Cardano platform stand to disrupt traditional finance for good, and Indigo provides a prime example. This synthetic asset protocol tokenizes real-world assets, bridging traditional and Web3 economies.

However, nobody handed success to Indigo's founders on a silver platter. They experienced firsthand how developing on Cardano's advanced architecture requires a top-notch engineering team to deliver — anything less could prove disastrous.

After experiencing setbacks elsewhere, the Indigo team recognized MLabs as the winning partner needed to successfully launch their dApp and provide users of the protocol with world-class value.

Championing DeFi on Cardano

A burgeoning industry, DeFi commanded over USD 170 billion during 2022 highs according to DeFi LLama. Aficionados often use the phrase "DeFi Legos" to underline how returns compound as the number of like-minded products increases.

The term highlights how DeFi applications are composable and used in combination by savvy investors to increase yield.

Here, stablecoins and synthetic assets are essential. Stablecoins are tokens pegged to the value of a fiat currency like the US dollar. Ideally, they are backed by liquidity reserves, while a stablecoin's availability is adjusted to maintain a consistent value.

Synthetic assets, on the other hand, are blockchain's answer to traditional stocks. These derivatives leverage diversified price feeds to track the value of assets — such as shares in a company.

The take-home point: synthetic assets integrate real-world value into a blockchain ecosystem such as that of Cardano.

Cardano DeFi Early Mover

An early mover in Cardano DeFi, Indigo quickly integrated both synthetic assets and a stablecoin. Yet, designing such a cutting-edge protocol would challenge any team, especially given the complicated architecture of Cardano.

Indeed, the Indigo protocol faced challenging roadmap bumps early on.

The Indigo team began building in 2021, making some initial progress with another consultancy. Their partnership soon stagnated as the project reached a turning point.

Like many DeFi protocols on Cardano, Indigo found it necessary to reevaluate initial core design assumptions.

Feeling underserved, Indigo reconfigured its roadmap while reconsidering their choice of development partners. It had become obvious the dApp needed a rock-solid consultancy with experience delivering high-quality DeFi solutions designed for the Cardano blockchain.

MLabs Saves the Day

It soon became clear that partnering with MLabs would be a natural choice for the firm. Like many MLabs clients, Indigo has significant in-house talent yet requires support in several key areas specific to blockchain development.

From the start, MLabs was able to take over the development of Indigo's smart contract suite, redesigning the business logic required to ensure user safety while greatly increasing ease of use. Specifically, this included securing transfers and exposing ergonomic endpoints for external interactions.

MLabs began by bringing the Indigo protocol up to spec. This involved debugging, redesigning, and optimizing the existing code base.

Towards this goal, MLabs led significant R&D efforts to redefine Indigo's structure while simultaneously integrating it with Cardano's unique architecture. This work kept an eye to the future, focusing on the application's scalability, upgradeability, and concurrency.

Decidedly, the solutions developed by Indigo and MLabs have been a huge success. After six months of working with MLabs developers, the Indigo application launched in late 2022, the first of its kind to market.

Moving forward, Indigo teamed with MLabs for unsurpassed DevOps and infrastructure support, ensuring that Indigo protocol users receive the seamless experience they expect.

Services employed

  • Smart Contract Development: MLabs encoded Indigo's fundamental business logic to safely manage synthetic assets and their transfer.
  • Transaction Building: MLabs integrated its Cardano Transaction Library to handle off-chain code, so users can easily interact with Indigo using web browsers.
  • On-chain Code Auditing (separate team): An independent team of MLabs auditors worked separately from the development team, auditing Indigo's main smart contract code to ensure proper function. This included robust testing including integration testing.
  • DevOps: MLabs organized top-tier infrastructure and hosting solutions which allowed Indigo to scale seamlessly alongside its rapidly growing user base.
The Indigo Labs team has been working alongside MLabs for the development of Indigo Protocol since early 2022. Together we've architected processes and procedures that have enabled our teams to collectively design and ship one of the more robust and complex DeFi protocols on Cardano to date. Throughout our partnership, MLabs has exhibited remarkable agility as our development needs shift over time, whether it be resource allocations for core development, CTL and/or DevOps. MLabs has truly been a catalyst in the development progress and successes we have achieved with Indigo!
Eric Coley (Founder & CEO, Indigo Laboratories)

Indigo Today

Indigo now thrives on the Cardano mainnet, responsible for an active DAO and its on-chain governance. More impressive, Indigo experienced a successful airdrop and has commanded significant volume since going live.

Within its first quarter, the platform's market cap of synthetic assets surpassed USD 6 million. The Indigo protocol also boasts over USD 14 million TVL (Total Value Locked).

Most importantly, however, active participants in the protocol enjoy a very attractive staking APR while also showing high Indigo DAO governance participation.

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