What protocol does SMT123 use for optical communications? Does it use standard Fibre Channel protocols FC-0, FC-1 and FC-2 or proprietary Sundance protocol?
It uses a simpler proprietary protocol developed by Sundance.
A proper core for FC-x protocols is available for us to buy, but it's enormously expensive.
No, not at the moment because the protocol is not supported.
Can I add some functionality to the SMT123's FPGA? To do this I need Sundance's source code for FPGA in SMT123. How and where can I get this code?
Yes, there is space left in the SMT123's FPGA. The code used in the SMT123 is created by and held by Sundance. It would be available under NDA.