Thank you for the answers Seviramar.
I think at $8500 the risk/reward might be favourable.
I see some major upside in case the intended potential of indirectly funding interesting projects in circular economies and network state projects.
From my part, in case this project passes, once it’s up, I can share with a few Bitcoin communities and Network States in Brazil and Latam, including a couple contacts in project Bitcoin é Aqui, in Rolante, which I believe might be the largest one in Latam.
@DAOstar_gov, thank you for the feedback and for the thoughtful questions. They are all very valid and help strengthen the design of the pilot. I’ll address each point below:
While these communities already have baseline knowledge of cryptocurrencies, the pilot is designed to operate with an extremely prudent approach. The maximum LTV would be capped from the outset within a conservative range (20–30%), enforced at the protocol level and clearly communicated to participating communities as part of the onboarding process. This is complemented by simple, non-technical training on volatility and liquidation events, ensuring a significant buffer against sharp BTC price movements and minimizing risk exposure.
At this stage, Rootstock subsidizes 100% of the interest as part of the pilot. This aspect had not been explicitly considered so far, but it can be included as a potential hypothesis within the pilot and as one of the key learnings to be analyzed during its execution.
The communities in Chile and Uruguay were identified through a long and in-depth evaluation process carried out together with Gabriel Kurman, co-founder of Rootstock. This process included multiple conversations and in-person meetings with each local economy to understand their structure, governance, needs, and intended use of capital. The assessment focused on their operational capacity, historical community work, and alignment with productive, non-speculative use cases, ensuring that the selection was the result of careful analysis.
For milestone reporting, verifiable documentation such as invoices or purchase receipts for tools, equipment, or supplies will be required to demonstrate that funds were used for productive local development rather than speculative purposes.
I’m happy to expand on any of these points or provide additional detail if needed.
Thank you for the comment, ChronoTrigger.
I agree that, at that amount, the risk/reward ratio is favorable. The potential benefit for Rootstock could be significant, as circular economies tend to share and document how they are financed, and Rootstock could become the common denominator in those conversations.
I also really appreciate the willingness to help with outreach to Bitcoin communities in Brazil and across the region.
Thank you so much, @Seviramar for your thoughtful responses, in general, I support this proposal. To fully understand this proposal, I want to hear more more details about the selection process and the manual return flow from M3. Specifically:
It’s great to hear that Gabriel Kurman has been very involved in the vetting process. To help the DAO understand the ‘Success Template’ for future circular economies, could you share the specific list of questions or due diligence checklist used during those in-person meetings? This would allow other delegates to see the objective baseline (i.e. min community size, years in operation, or existing BTC holdings) that makes these two communities in Chile and Uruguay the right fit.
Regarding Milestone 3, you mentioned a ‘Finalize and stabilize the automated interest-return flow.’ Since the DAO is currently paying the interest, how is the $6,000 being held and distributed? Will it be held in a 2/3 multi-sig with a DAO observer, or is it managed entirely by the project team?
Hi Seviramar!
Im seeing that you have successfully created the on-chain application. Under what KYCed entity are you applying with for this proposal?
On that note, can you please clarify the following:
Thank you !
Hi @Seviramar!
Now that we see the milestone 1 proposal is onchain, we would like to confirm the complete proposal with each milestone’s budget and deliverables. Apparently, you have incorporated our suggestion for the Milestone 1, but the original post hasn’t been updated nor we don’t see an updated post yet.
Thank you, @DAOstar_gov, for the support and the feedback.
Regarding the selection process: Gabriel Kurman was actively involved in all evaluation stages. The communities were selected through in-person meetings and a qualitative due diligence process that considered factors such as community size and activity level, years of operation, organizational structure, prior experience working with Bitcoin, the presence of clear local leadership, and the operational capacity to sustain a circular economy over time. A consistent evaluation framework was applied across all assessed communities, rather than a fixed questionnaire, allowing for meaningful comparison and the selection of the two best-suited communities in Chile and Uruguay for this pilot.
Regarding Milestone 3, the interest-return flow is not automated. During this phase, interest returns are managed manually. The $6,000 will be held in a dedicated address that will be publicly shared, enabling the DAO to independently track and verify the funds. Distributions will be executed in accordance with the proposal, with transparency and traceability as priorities.
Hi Tamara,
The on-chain application was created on behalf of Tropykus. This proposal is being submitted under the Tropykus KYCed entity, which is already completed and on file with the DAO.
Thanks for the questions, happy to clarify.
Transaction volume projections: This pilot is intentionally scoped as a validation and learning phase rather than a volume-maximization initiative. Based on current Tropykus on-chain usage and average position sizes, we expect a relatively modest but consistent level of activity driven by recurring user interactions (collateral management, borrowing, repayments, and interest accrual) across the 6+ communities over the 17-week period. The primary objective at this stage is to validate behavioral patterns, UX, and operational flows that can later be scaled, rather than to optimize for raw transaction count.
TVL contribution: The RBTC supplied by these communities is expected to represent a small incremental addition relative to Tropykus’s existing TVL. While not material in absolute terms, this contribution is strategically important as it reflects new, grassroots-driven collateral entering the protocol from previously unbanked or underrepresented users. The pilot’s success would be measured more by repeat usage and retention than by short-term TVL growth.
Revenue / fee generation: We agree that fee generation is an important metric. In this pilot, the expected transaction fees returned to the Rootstock network will be limited, consistent with the low initial volumes. However, the value lies in establishing a repeatable model for circular economies that, if scaled across additional communities, could generate meaningful and sustained on-chain activity and fee revenue over time.
Overall, this proposal should be viewed as infrastructure and market validation for long-term network growth, rather than an immediate revenue-driving initiative.
@Tane, thanks for the suggestions, they were taken into account.
I wasn’t able to edit the original post to reflect the updated breakdown. I’m not sure whether this was due to missing permissions or simply not finding the correct way to update it.
That said, to clarify and make it explicit, we adjusted the milestones as suggested:
M1: Focus exclusively on onboarding 2 communities, using a portion of the operational expenses primarily for marketing: $1,500
M2: Allocate half of the interest payment ($3,000) to the onboarded communities, plus an additional $500 to onboard 2 more communities: $3,500
M3: Allocate the remaining half of the interest payment to the later-onboarded 2 communities: $3,000
M4: Close out the pilot and deliver a final report with results and learnings: $500
This structure reflects the feedback received received.
Thank you! Yes, appreciated you incorporated our suggestions into the proposal. We would like to have a complete version of the renewed proposal with clear deliverables associated with each milestone, and the whole other sections, for us to review the proposal as a whole for the onchain proposal put out today and the deliverables once each milestone is complete in the future.
Thank you so much, @Seviramar for the additional details, and we appreciate the thoroughness of the selection process (and possibly it could also be documented/templated for the M2 & M3 on-boarding of additional communities for more efficiency). And we support the intent for transparency of the funds for tracking and verification of the interest-return flow funds.
We also support @Tane request for you to publish the complete and revised proposal in this thread so it makes it easier for delegates to understand the changes/updates and what we will be voting on.
Finally, in your response to @tamlerner , you mentioned about the revenue generation value back to Rootstock, and that it establishes a repeatable model if scaled. We totally understand that this is a pilot to “test the validation waters”. However, to scale to a repeatable model for actual ROI/meaningful fee revenue would take a larger project scope + greater time then what your lean version could accomplish even if 10x’d (i.e. in its current form, most of the processes wouldn’t scale).
Could you provide some more details of your vision of how you believe that this pilot could accomplish this, other than testing grounds, to obtain a repeatable fee revenue would be a very different animal than your vision today? We want to understand your vision of how you see this will bring true added value to the Rootstock ecosystem?
@Seviramar , we have voted against this proposal in its current form, not due to the intent of this proposal, which we believe is a good pilot initiative, but due our confusion of the total amount of the grant amount requested (and specifically the operational vs. marketing allocations), milestone deliverables for each, as well as the actual long term impact for Rootstock, as also noted by Chrono Trigger.
We appreciate your summary post of milestone grant amounts in your response to Tane’s request, however, we are unsure of the total allocations for operations vs. marketing, as you noted in your comment above you will use a portion of the operation expenses ($1K per the original grant request version) for marketing, however, your original marketing budget was already $1,500, and is the total grant amount still $8,500? In addition, what is the breakdown amount for each expense allocation, such as operations and marketing?
Secondly, as we noted in our last comment to you above about understanding your greater vision for this project, currently with the information that we have per your comments posted and the original proposal, we are unsure that this pilot will provide enough of an impact for Rootstock.
If the M1 grant proposal does pass, we will possibly again vote “against” further milestones proposals, unless there is more clarification on long term goals of project, measurement of how much of an impact for Rootstock this project will deliver, and a clarification of budget and milestone deliverables.
We also welcome more conversations with the proposal author to obtain a better understanding of this proposal and future goals.
Hey @Curia can you please clarify your comment that USDRIF is at ~95.8% utilization with only ~52k to borrow? The screenshot with Tropykus market data that you referenced shows that 26.35% USDRIF is borrowed. Thank you.
@Axia As you can see in the images, the top section show market composition these show how much each asset represents as a percentage of the entire platform. The below section is the breakdown behind those percentages.
On the left side “Total deposited,” it shows that USDRIF represents 7.77% of all assets deposited on the platform. On the right side “Total borrowed,” the 26.35% refers to the portion of the total debt that is held in USDRIF. It shows the composition of the debt, it does not mean that 26.35% of USDRIF is borrowed. It simply means USDRIF makes up 26.35% of all borrowed value on the platform.
To calculate the utilization: Total asset borrowed / Total asset deposited = utilization (1,196,582 / 1,248,785 = 95.82% utilization). The difference between total deposits and total borrowed shows a remaining borrowable capacity of just $52,203 USDRIF.
Hope this clarifies your question.
Thanks @Seviramar for engaging with all the questions so far.
I want to raise a point about the proposal structure that I believe hasn’t been addressed yet.
The team behind this proposal is essentially Tropykus itself (four years leading Tropykus communities). The pilot’s primary mechanics drive TVL and usage to Tropykus, while the DAO covers the borrowing costs. This isn’t inherently problematic, but it does mean we’re essentially co-funding a Tropykus user acquisition campaign.
With that framing, I think it’s fair to ask what Tropykus would be willing to contribute beyond operational labor. Could they match the interest subsidy, even partially? Or waive protocol fees for pilot participants? @DAOstar_gov raised this and I’d like to echo it more directly. If the protocol stands to gain TVL and sticky users, some skin in the game beyond staff time seems appropriate.
I’d also like to understand success criteria more concretely. Building on @Tane’s point about sustainability models and @Ignas’s concern about retention dropping once subsidies end: at the end of six months, what metrics would indicate this pilot is worth scaling? And critically, how do we measure whether the returned interest actually boosted circular economy activity versus what would have happened anyway? Without a baseline and attribution methodology, we risk giving away treasury funds with no way to assess effectiveness.
Finally, both confirmed communities are in the Southern Cone. Is the intention to stay regionally focused, or would later milestones diversify geographically?
Thank you for the thoughtful feedback and for raising these points.
We agree that the idea of a repeatable revenue sharing model for Rootstock is interesting and worth exploring. At the same time, we would like to better understand if there are concrete precedents, either within the Rootstock ecosystem or in comparable ecosystems, where applications are already generating sustainable revenue sharing back to the underlying blockchain. Having those references would help set realistic expectations around feasibility and timelines.
Regarding the expectation of defining revenue sharing before the pilot, our view is that the core purpose of this initiative is precisely to learn. At this stage, we have not yet validated whether the model works, what operational frictions may appear, or what level of scale is realistically achievable. Defining a fixed revenue sharing structure upfront, before we have gathered any real data or learnings, seems premature.
We see this pilot primarily as a validation and learning phase: to test assumptions, understand what can and cannot scale, and generate the insights needed to later design a more robust and potentially revenue-generating model. Any meaningful revenue sharing or ROI-oriented structure should, in our view, be informed by the outcomes of this pilot rather than established in advance.
Our intention is to add value to the Rootstock ecosystem by reducing uncertainty and de-risking future, larger-scope initiatives, instead of overcommitting to a revenue model that has not yet been validated in practice.
Thanks @ChronoTrigger, these are fair questions and I appreciate you laying them out so clearly.
On the “user acquisition for Tropykus” framing: it’s true that Tropykus is the execution layer and that TVL and usage flow through the protocol. However, it’s important to note that any sustained increase in Tropykus TVL driven by new users also directly benefits the Rootstock network itself, through higher on-chain activity, greater capital utilization, and stronger network effects around Rootstock native DeFi. In that sense, protocol level growth and network level growth are not fully separable.
That said, the primary objective of the pilot is not growth for Tropykus in isolation, but to test whether a community based circular economy model built on Rootstock can function in practice. Tropykus is used because it is a mature, battle tested lending protocol on Rootstock, which reduces execution risk for the DAO during an experimental phase. The learnings are intended to be applicable beyond a single protocol.
Regarding “skin in the game”: we agree with the principle, but we think timing matters. At this stage, Tropykus’ contribution goes beyond staff time and includes operational execution, coordination, tooling, monitoring, reporting, and community onboarding, all of which represent real costs and long term commitment. We are cautious about matching interest subsidies or committing to fee waivers upfront, before we have evidence that the model works, is sustainable, or produces measurable ecosystem level value. Once the pilot generates data, these mechanisms can be evaluated and structured more coherently.
On success criteria and measurement: we fully agree that qualitative impressions are not enough. Success at the end of six months would be evaluated across multiple dimensions, including:
We plan to establish a baseline at onboarding and compare behavior during and after the incentive period. While attribution will never be perfect, the goal is to generate enough signal to make an informed decision about whether scaling is justified.
On geography: the initial focus on the Southern Cone is intentional due to existing trust, access, and operational readiness. This is not meant to be limiting. If the pilot is successful, later milestones are explicitly intended to diversify geographically and test whether the model holds across different regions.
Overall, we see this pilot as a learning and validation step for the Rootstock ecosystem. The intent is to reduce uncertainty first, and only then discuss scaling, deeper incentive alignment, or more formalized revenue sharing structures.
Hello @Seviramar, thank you for the thoughtful and detailed response to the community’s concerns. We appreciate the collaborative responses and your agreement on the 20-30% LTV cap, we believe this is a significant step toward treasury safety.
While we believe in the pilot’s potential, our current ‘Against’ stance reflects a need for more operational precision to ensure we are responsible stewards of the DAO’s funds. To help us move toward a ‘Support’ position, we believe the following three areas still require more definitive work:
1. Unified Budget Clarity: To resolve the confusion surrounding the re-allocation of operational expenses toward marketing, could you provide a final, consolidated Budget Table? We want to ensure that if $1,000 is moved from Operations to Marketing, the essential ‘Monitoring and Reporting’ tasks originally under Operations are still fully resourced.
2. Tangible Protocol Alignment: Since the DAO is funding 100% of the interest, we are looking for a more concrete ‘Skin in the Game’ commitment from Tropykus, as @ChronoTrigger has also noted. Instead of an after-the-fact analysis, would you be open to linking Milestone 2 to a Tropykus fee-rebate or matching incentive? Even a symbolic match would signal a true partnership between the DAO and the execution protocol.
3. Defining ‘Productive Success’: Beyond retention and TVL, what is the specific metric that proves this is a ‘Circular Economy’ and not just DeFi looping? (e.g., A requirement to report the number of local business invoices settled via these loans).
We are very open to further conversation to refine these points. Our goal isn’t to block the initiative, but to ensure that the infrastructure we build together is transparent, aligned, and ready for scale.
