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Project Name & Description
This proposal introduces a pilot of a social program that enables circular economies to access bitcoin-backed credit (using RBTC as collateral) through Tropykus on Rootstock.The goal is to offer new financial alternatives for communities holding bitcoin, raise awareness of the solutions available on Rootstock (starting with Tropykus), and build global networks that benefit from fairer interest rates and better financing options. The program also helps local businesses access sustainable credit.
The specific proposal consists in a pilot where all the interest of the loans (not capital) demanded by “4” bitcoin circular economies will be paid by the Rootstock Collective DAO through this proposal. These interest payments allow communities to fund local initiatives, strengthen collective projects, and build long-term financial resilience, at the same time that they understand the benefits of DeFi on Bitcoin using Tropykus and RootstockThe program establishes a practical and transparent cycle:
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Communities show interest to participate in this pilot.
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Communities lock RBTC on Rootstock through Tropykus.
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They borrow digital dollars (DOC or USDRIF) for local development (tools, production, services, equipment, etc.) using their RBTC as collateral.
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The loan interest is paid back by Rootstock Collective to the same community through smart contracts, increasing their collective fund.
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Public metrics track collateral, loan usage, repayments, and impact.
This model promotes responsible credit, bitcoin liquidity without selling, community-driven economic growth, and practical onboarding into the Rootstock ecosystem.
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Team Background
• Over four years building, coordinating and leading the Tropykus and Rootstock communities across Latin America, with a clear focus on real-world adoption.
• Established partnerships with municipalities, cooperatives, community organizations and emerging circular economies, enabling on-the-ground deployment of Bitcoin-backed financial tools.
• Proven experience in designing and executing education programs on Bitcoin, Rootstock and DeFi, driving grassroots adoption and supporting thousands of users.
• Strong operational background in supporting Tropykus users, managing community feedback loops and translating real community needs into product improvements.
• Demonstrated ability to implement and scale financial use cases—saving, borrowing and circular economy models—using RBTC within the Rootstock ecosystem. -
Total Grant Amount
Total requested: $8,500Breakdown:
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$6,000 for interest payments to participating communities.
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$1,500 for marketing to promote the pilot and onboard communities.
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$1,000 for pilot operations, including coordination, support, follow-up, and reporting.
This distribution covers all components needed to run the pilot effectively.
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Milestone 1 Deliverables
Requested for Milestone 1: $2,500Milestone 1 — 6 Weeks
Objective: Onboard circular economy leaders and launch the first pilot experiences on Rootstock.
Main tasks:
• Select 2 pilot circular economies
• Onboard leaders of selected circular economies
• Training on Rootstock: network basics and Bitcoin-backed DeFi
• Wallet setup and compatible wallets on Rootstock
• Introduction to Tropykus: how it works and use cases
• Explanation of risks and good operational practices
• Configure RBTC-backed borrowing for each community
• Activate the first borrowing positions
• Run the first interest-return cycleKPIs:
• 2 pilot circular economies onboarded
• Leaders trained and operational on Rootstock
• Compatible wallets set up and funded
• First RBTC-backed borrowing positions opened
• First interest-return cycle completedTracking:
• Progress tracked in a simple shared Excel (tasks, status, dates) -
Milestone 2
Requested for Milestone 2: $2,000Milestone 2 — 5 Weeks
Objective: Scale participation and improve operational tools.
Main tasks:
• Onboard 3–4 additional communities
• Provide clearer and more detailed performance data for pilot communities
• Run recurring interest-return cyclesKPIs:
• 5–6 total communities active
• Increase in collateral supplied (RBTC)
• 2 completed interest-return cycles during this milestone
• Dashboard v2 publishedTracking:
• Progress tracked in a simple shared Excel (tasks, status, dates) -
Milestone 3
Requested for Milestone 3: $2,000Milestone 3 — 6 Weeks
Objective: Consolidate the program and publish results.
Main tasks:
• Onboard additional communities as capacity allows
• Finalize and stabilize the automated interest-return flow
• Produce final impact report
• Publish metrics, results and case summariesKPIs:
• 6+ communities participating
• Final impact report published
• Public webpage live with updated dashboardTracking:
• Progress tracked in a simple shared Excel (tasks, status, dates) -
Technical Specs
• Borrowing using RBTC as collateral via Tropykus on Rootstock.
• Transparent logic for returning interest to each participating community.
• Full use of Rootstock’s Bitcoin-secured infrastructure for reliability and transparency. -
Value Prop for Rootstock
• Increases on-chain activity through RBTC-backed borrowing.
• Demonstrates a socially impactful, real-world use case powered by Rootstock.
• Integrates cooperatives and local enterprises into the Rootstock ecosystem.
• Highlights how Rootstock enables productive financing without selling bitcoin. -
Video Pitch:
Demo – Real use cases in Latin AmericaTo demonstrate the real-world impact of this proposal, we will showcase concrete use cases from Argentina and Uruguay, all enabled through Tropykus and backed by verifiable press coverage and real images:
- Argentina – Income-generating apartment
A user acquired an apartment using a Tropykus loan and now covers the loan repayments with the rental income.
https://www.criptonoticias.com/comunidad/argentino-compra-vivienda-prestamo-bitcoin/
- Argentina – Cypherpunk Center construction
Dieguito Gutiérrez Záldivar financed the construction of a Cypherpunk community center using a Tropykus loan backed by his bitcoin.
https://www.criptonoticias.com/comunidad/centro-cypherpunk-construye-argentina-bitcoin/
- Argentina – Partial purchase and full renovation of a house
Another user accessed a loan through Tropykus to buy part of a property and complete a full remodel, enabling it to become a viable long-term asset.
- Uruguay – Family building their home
A family is currently building their home thanks to a Tropykus loan secured with their bitcoin.
These examples illustrate how bitcoin-backed credit is already helping people take meaningful, tangible steps in their financial lives. In the demo, we will present photos, outcomes, and links to news articles covering several of these cases.
- Argentina – Income-generating apartment
A great initiative, my full support!!!
Hi team,
Thank you for presenting this proposal.
We find the narrative of Bitcoin working for communities very strong, but as we kick off the discussion, we have a few questions regarding the mechanics and long-term sustainability. Specifically, how do we bridge the gap between this subsidized pilot where the DAO covers the interest and independent usage once the grant ends, ensuring we aren’t creating a dependency on “free” credit? Additionally, could you provide an estimate of the total loan volume this $6,000 allocation supports at today’s rates?
Hello @Seviramar thank you for this intriguing proposal.
I have a few questions to better understand the scope, intent, and safeguards of the pilot:
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Target communities: What types of communities are you planning to target for the pilot? What is your outreach strategy, and how will you identify and engage these communities?
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Participants: Will participants primarily be individuals, cooperatives, or organizations? How do you define an eligible “community” for this program?
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Social impact focus: What specific social or economic outcomes are you aiming to support? Are there particular causes or challenges (e.g., housing, local commerce, financial inclusion) that this pilot is designed to address?
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Impact metrics: What community-level impact results are you hoping to achieve or measure through this program?
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Vetting & safeguards: How will pilot participants be vetted to ensure alignment with the program’s goals and to prevent extractive behavior, especially given that fully subsidized loan interest is a meaningful incentive?
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Risk mitigation & accountability: What guardrails are in place to mitigate the risk of borrowers defaulting or disengaging after receiving funds? Given that interest payments are fully subsidized, how do you prevent participants from treating this as “free money” and walking away without delivering impact?
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Use cases: Is this initiative intended to support individuals (e.g., access to housing or personal financing), or is it more focused on business or community-oriented real estate and infrastructure that can generate broader economic impact?
Thank you again for bringing forward this proposal. I look forward to deepening the discussion!
I like the narrative Bitcoin-secured DeFi serving real world economies.
But my concern is that this model works best at small scale and becomes hard to manage if expanded too fast.
In lending markets, interest rates are a key risk signal. They push borrowers to use capital efficiently and manage LTV.
When DAO pays the interest, this signal weakens and can lead to over-borrowing, since the marginal cost of borrowing is close to zero.
How do you plan to prevent this behavior?
I also share the sustainability concern: subsidized borrowing may inflate demand and once subsidies end, retention may drop.
Is there a hard cap on subsidized borrowing, either per community or for the program overall?
Eren, thank you for the feedback and for opening the discussion.
Regarding the transition between the subsidized pilot and independent usage, the goal of the subsidy is not to establish a permanent zero-cost credit scheme, but rather to reduce initial friction and allow communities to adopt the tool in a controlled environment. The pilot serves as a learning phase: during this period, operational flows, real demand, and repayment capacity are validated. Once the grant ends, the model is designed for participants to continue operating under market conditions, with greater predictability, experience, and confidence in the tool, thus avoiding structural dependency on the subsidy.
As for the total loan volume, at current market values the $6,000 allocation would cover the interest on up to 100,000 DOC or USDRIF over a 6-month period across all participating communities, adjusted to their actual needs.
Hello @Axia, thank you very much for taking the time to carefully review the proposal and for formulating such thoughtful questions. Below are our responses to each point:
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Target communities: The pilot is designed for communities with active local economies that already operate with a certain level of organization, such as cooperatives, civil associations, community-led initiatives, or existing circular economies. Outreach is based on prior on-the-ground work and direct relationships with communities that have already expressed interest, as well as referrals from within the ecosystem. This is not an open or mass onboarding process; participation is intentionally limited to a small number of communities to ensure close support and monitoring throughout the pilot.
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Participants: Participants are not isolated individuals, but organized groups such as cooperatives, community organizations, or collective entities that represent a broader community. For the purposes of this program, a “community” is defined as a group with a shared economic or social purpose, some form of internal coordination or governance, and the ability to collectively manage the use and repayment of funds.
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Social impact focus: The pilot aims to support real, productive activities that strengthen local economies and promote internal circulation of value. A concrete example is Pichilemu, Chile, where satoshis are distributed within the community for use at local businesses that accept bitcoin. This approach encourages bitcoin to be used as a medium of exchange, strengthens local merchants, and keeps value circulating within the community. More broadly, the initiative seeks to reduce the need to liquidate bitcoin to cover meaningful expenses while fostering sustainable, grassroots adoption.
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Impact metrics: At the community level, we aim to track indicators such as total credit utilized, number and type of projects financed, repayment performance, continued protocol usage after the subsidy period ends, and overall retention of participating communities. Rather than focusing solely on financial metrics, the emphasis is on sustained adoption and productive use of credit over time.
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Vetting & safeguards: Participating communities are selected through a prior evaluation process that considers their track record, level of organization, intended use of funds, and alignment with the pilot’s objectives. The interest subsidy is explicitly limited in both amount and duration, making clear from the outset that this is a temporary mechanism and not a permanent entitlement, which helps discourage extractive behavior.
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Risk mitigation & accountability: A key safeguard is that the principal is not subsidized: borrowers are fully responsible for repaying the capital, which reduces the likelihood of the program being treated as “free money.” Loan sizes and terms are capped, and communities are closely monitored during the pilot. Importantly, interest payments are covered by Tropykus only after the previously defined conditions are verified, and these payments are executed via the smart contract. This structure adds an additional layer of accountability and minimizes the risk of misuse.
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Use cases: The initiative is primarily focused on productive, community-oriented projects and infrastructure that can generate broader economic impact. It is not designed for individual consumption, but rather for use cases that strengthen the community as a whole and have the potential to be sustainable beyond the pilot period.
Thank you again for your time. We look forward to continuing the discussion and are happy to provide further detail if needed.
Ignas, thank you for raising these concerns, which are fully valid and have been taken into account in the design of the pilot.
We agree that this type of model works best at small scale and that rapid expansion can introduce both operational and incentive risks. For this reason, the pilot is explicitly designed as a limited program, both in the number of participating communities and in the total credit volume, prioritizing learning and control over fast growth.
Regarding interest rates as a risk signal, the design aims not to remove this signal entirely, but to temporarily and carefully soften it. The subsidy is neither automatic nor unlimited: communities are selected cautiously, and in several of the cases we have already discussed, the intention is to start with small loan amounts and gradually increase debt only as concrete needs arise. This progressive approach helps prevent over-borrowing and preserves incentives for efficient capital use and prudent LTV management.
On sustainability and the risk of artificially inflated demand, the program includes clear limits. There is a hard cap on subsidized borrowing both at the overall pilot level and per community, and the interest subsidy is restricted in both amount and duration. From the outset, it is clearly communicated that this is a transitional phase, designed to enable initial adoption and validate the model, not to support demand indefinitely.
Taken together, these mechanisms—careful community selection, small initial loan sizes, gradual scaling, explicit caps, and time-bound subsidies—are intended to preserve risk signals, discourage opportunistic behavior, and lay the groundwork for sustainable adoption once the pilot concludes.
If there are any further questions or points that would be helpful to clarify, we would be more than happy to address them.
Hi @Seviramar! We appreciate the thoughtful design and community-driven focus of this proposal, especially the effort to bring bitcoin-backed credit to organized local economies through Tropykus on Rootstock. The pilot’s emphasis on transparency and public metrics is a strong foundation for building trust and learning.
A central issue that stands out is the sustainability of subsidized interest payments. As @Eren_DAOplomats noted, it’s crucial to understand how the program will avoid fostering a dependency on “free” credit. While acknowledging that you assume the model will be designed based on the results, we believe you should provide potential models that would work in the mid-long term.
We have some concerns on how each milestone is designed. $6,000 for interest payments, and the rest for operational expenses make sense, thus it would be better to properly align each milestone with them. Suggestions are provided below:
- M1 to focus purely on onboarding 2 communities, utilize potions of the operational expenses, mainly for the marketing: $1,500
- M2 to allocate half of the interest payment ($3,000) for the onboarded communities + an additional expense $500 to onboard additional 2 communities: $3,500
- M3 to allocate the rest of the interest payment for the later-onboarded 2 communities: $3,000
- M4 to wrap up the pilot, provide the report with the results: $500
Building on @Axia’s questions and your response, we’re interested in how you will ensure that the selection process for participating communities is both transparent and aligned with the program’s intended social impact. You have provided some example cases that only focus on individuals that utilizing the system for their personal benefits; not cover your potential target users: “active local economies that already operate with a certain level of organization, such as cooperatives, civil associations, community-led initiatives”. Could you provide a few leads that would be interested in this pilot if possible?
Thank you @Seviramar for answering my questions. A few more came up:
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After a borrower receives DOC or USDRIF, how are they expected to use those funds to interact with the real world and support public development work, particularly if the counterparties they’re engaging with only accept fiat?
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How does Tropykus manage collateral health and liquidation risk?
Thank you
We’ve been looking at the current Tropykus market data to assess how the proposed $6k interest subsidy, covering up to $100k in borrowing volume over the 6-month period you mentioned, fits within existing liquidity conditions, and we have some concerns around potential bottlenecks.
Because USDRIF is currently at ~95.8% utilization with only ~$52K available to borrow, meaning the pilot cannot realistically reach its target using USDRIF under current conditions. If borrowing shifts to DOC instead, where utilization is already ~88.5%, adding ~$100K in new debt would likely push the pool past the ~90% and spike utilization rates, potentially impacting organic, pre-incentive users.
Given this, we’d like to ask whether you’ve thought about a plan to attract additional stablecoin depositors alongside the pilot, as without parallel supply-side growth, the program risks straining available liquidity and distorting interest rates for the broader Rootstock community.
@Tane, we agree with the suggestions raised and will take them into account. We believe they help improve the structure and clarity of the proposal, particularly in aligning milestones with both interest subsidies and operational expenses in a more coherent way.
Regarding the examples mentioned, they were included solely to illustrate that if there is clear potential for individuals using the system, there is also strong potential for organized communities. This observation is precisely what led us to propose this pilot focused on community-based local economies.
At an early stage, we have already spoken with leaders from two circular economies. One is Punta Bitcoin in Punta del Este, Uruguay, and the other is Satoshilemu in Pichilemu, Chile. Both communities have expressed interest in participating in the pilot as a way to support and strengthen their local economies.
If any additional information or clarification is needed, we are more than willing to provide it.
@Axia, thank you for these additional questions, they are very helpful to further clarify the proposal.
Regarding the use of DOC or USDRIF in the real world, both communities are already familiar with and have access to off-ramps to their local currencies, which allows them to easily convert both DOC and USDRIF when needed. One available option is Kripton Market, which accepts both DOC and USDRIF, although each community is free to choose the off-ramp solution they consider most convenient or appropriate for their local context.
As for collateral health and liquidation risk, this is addressed as part of Milestone 1. This phase includes selecting the circular economies, understanding their specific needs, and delivering an initial training focused on how Tropykus operates on Rootstock. This is followed by a second training session aimed at defining a tailored action plan for each community, with a strong emphasis on maintaining safe collateral margins. The intention is for communities not to borrow up to the maximum allowed by the platform (64%), but instead operate within a more conservative range of approximately 30% to 40% of their deposited collateral. This approach also ensures they retain additional collateral capacity to add funds if there is a downturn in the price of bitcoin.
We hope this addresses your questions. If any further clarifications are needed, we’re happy to provide them.
Thanks for the responses @Seviramar — they’ve addressed my questions, but I still have some hesitations. While I appreciate that borrower education is included, I remain concerned that education alone may not be sufficient to mitigate risk. Even well-informed borrowers can be incentivized to borrow closer to the maximum allowed, particularly when interest costs are subsidized. In volatile environments, this leaves little margin for error and increases the likelihood of liquidation during market stress.
Additionally, reliance on off-ramp providers introduces counterparty, tax, and regulatory risks that do not exist in purely onchain activity. This isn’t a deal-breaker for the proposal, but it is something I believe delegates should understand clearly and upfront.
Before this proposal goes up for a vote, I think it would be valuable to hold a Q&A session with Tropykus so delegates can ask questions directly and better understand how these risks are being addressed or mitigated.
Curia, thank you for raising this point. It is a valid concern, and we appreciate you bringing it to our attention.
While current USDRIF liquidity may appear constrained, it is important to note that these markets are inherently dynamic. Over Tropykus four years of operation, we have consistently observed that increased borrowing demand leads to higher deposit rates, which in turn attracts new deposits and helps rebalance utilization and borrowing costs. This feedback loop has been a key driver behind the growth and stability of both the USDRIF and DOC markets.
We expect this organic dynamic to continue over the next six months and to progressively accommodate the liquidity needs of the pilot.
It is also important to clarify that the 100,000 USD borrowing volume is a cumulative target over the six month pilot period, not an instantaneous loan requirement. This gradual ramp up allows us to closely monitor utilization levels on a weekly basis and make adjustments as needed, minimizing the risk of sudden spikes that could impact existing users.
Additionally, to provide further reassurance, the marketing budget associated with the pilot is not intended solely to stimulate borrowing demand. A key objective is also to attract new depositors and strengthen overall market liquidity, ensuring that growth on the demand side is matched by growth on the supply side.
We are happy to address any additional questions or concerns and remain fully available to provide further clarification as needed.
@Axia, thank you for the comment and for expanding on the points raised.
We agree that education alone does not fully eliminate risk, which is why we do not view it as a standalone measure. The pilot is designed with conservative usage limits, active position monitoring, and continuous tracking of collateralization levels, specifically to reduce the incentive to operate close to maximum thresholds, even in a subsidized interest environment. The goal is to encourage responsible use of credit and minimize liquidation scenarios during periods of market volatility.
Regarding the use of off ramp providers, we understand the counterparty, tax, and regulatory risks you mention. It is important to clarify that these services are not part of the protocol itself nor its onchain operations, but rather optional tools that users may choose to use depending on their local context.
In addition, there are already service providers such as Kripton Market, previously mentioned, that accept payments in DOC or USDRIF and handle payments to suppliers and service providers on their behalf, acting as intermediaries. Under this model, circular economies can operate without direct exposure to fiat flows, significantly reducing tax and regulatory friction, since fiat does not pass through them directly. This is clearly an optional setup, and each circular economy can decide whether or not to use this approach.
We believe the suggestion to hold a Q and A session ahead of the vote is very valuable. We are fully open to participating in an open discussion with delegates to address questions directly and explain in detail how these risks are considered and mitigated within the scope of the pilot.
Thanks to the proponent for putting together this detailed pilot proposal, I appreciate the focus on productive use cases and the emphasis on onboarding community-driven groups without requiring them to sell their BTC holdings. I also appreciate the potential for boosting liquidity in lending/borrowing protocols on Rootstock such as Tropykus.
The small ask ($8,500) and clear milestones make it easy to evaluate, and the real-world examples shared (with press links) are encouraging.
That said, I have some concerns about the overall impact and alignment with the Collective’s goals of boosting broad Rootstock usage and adoption.
I feel lending/borrowing are a mature and well established application of Web3/DeFi. People are well aware of Aave and what it’s used for, and Bitcoiners have been looking at possibilities for lending their “hardest asset” and borrowing “weak currency”, comparing protocol risks, centralization, custody rehypothecation, etc. I feel like lending/borrowing functionality on Rootstock itself is also known, as Sovryn and Tropykus have been around for five years.
Case in point is the profusion of good quality Bitcoin lending comparison websites, like this one
https://www.zone21.com/ and so many others. a Google search for “Bitcoin lending comparison” or “Top Bitcoin lending” yields about 3 pages of results.
My concern is subsidizing interest costs risks primarily benefiting participants who are already positioned to borrow (or would do so at slightly higher rates), rather than driving meaningful net-new user growth at scale. I fear we might just be subsidizing traditional ongoing DeFi costs for Web3 citizens.
How will the participating communities be chosen? What safeguards ensure they are genuinely new to Rootstock DeFi (vs. existing users or groups that would borrow anyway)?