Gov Action

This treasury withdrawal funds **Midgard - Optimistic Rollups** which will provide the following services: Midgard, which is a modular framework for deploying optimistic rollup Layer 2s on the Cardano blockchain, designed to enhance transaction throughput, reduce costs, and enable advanced decentralized applications. This Treasury Withdrawal is submitted by Intersect on behalf of the vendor. The following sections; Abstract, Motivation, Rationale and Vendor Profile have been sourced from the approved proposal submitted by the Vendor as part of the Intersect budget process. This treasury withdrawal funds one of 39 proposals to give effect to the approved budget info action for ₳275,269,340, administered by Intersect via gov_action1u9x73kwufaxa70lfy59g4ynwyrcsaxdcd0gxzzmh67s9fxq4j8hqqk2phgh. The information provided herein is intended to fulfill the spirit of the constitutional requirement for a treasury withdrawal info action by also providing the details of the proposed solution, alignment to the budget, and amount to be withdrawn from the Cardano Treasury.

This proposal aims to solve the following problem: We have Hydra as our native state of the art state channel solution, we have partnerchains as our native evolution of sidechains, Midgard aims to be our native evolution of rollups. The UTxO system is a match made in heaven for rollups. It allows us to build true L2 rollups that inherit maximal security from Cardano. This cannot be replicated in account based systems. It's not a coincidence that Fuel, the first general purpose L2 to receive a decentralization rating of stage 2 (highest possible) is UTxO based. Fraud proofs for global state systems like Arbitrum and Optimism are extremely difficult to implement and very expensive and complicated to conduct onchain (and require multiple parties); this is why to this date despite spending millions in R&D neither of those protocols has working fraud proofs, and they all rely on centralized permissioned sequencers and operators. On the other-hand, fraud proofs on Cardano are extremely straightforward and require only a single party (no challenge-response proofs) due to the local state properties of the ledger. Not a single blockchain has managed to achieve true permissionless general purpose rollups. At the end of the day, the top "L2s"in the blockchain space right now are all custodial multisigs. The Midgard framework is a first of its kind, in its capabilities to deploy completely permissionless rollups that inherit the full security of Cardano. - No centralized sequencer - No challenge response "proofs" - No custodial multisig - Permissionless fraud proofs (open to anyone) - Permissionless operator set - Deposits and withdrawals cannot be censored (inherits the full censorship resistance of Cardano) This is all made possible by Cardano's unique local state EUTxO architecture. UTxO contention, small block size, local state, transaction determinism, all of these "problems" may have led you to question why these design choices were made. Midgard aims to show you that these are actually not problems at all. In-fact quite the opposite, they are extremely powerful properties that, together, provide unique value that simply does not exist in any other ecosystem. These are, in actuality, the core pillars that make Midgard even possible in the first place. You cannot build Midgard on Ethereum, Solana or Sui. It is a protocol that is only possible on Cardano.