Proposal: Introduce the BTC Vault (Sandbox Mode) on the RootstockCollective dApp

General
1

RootstockLabs wishes to grow and evolve the ecosystem through broader use of rBTC and is exploring new tools to connect protocols and interoperate with rBTC as an extension to previous proposal https://gov.rootstockcollective.xyz/t/proposal-introduce-the-usd-vault-sandbox-mode-on-the-rootstockcollective-dapp/674

As such, RootstockLabs proposes to use the RootstockCollective dApp as a prototype entry point for one such tool using Async Vaults mechanics to explore future possibilities.

In order to test out this new tooling RootstockLabs proposes to create a SANDBOX where new tooling can be tested on mainnet Rootstock. Adding this test tooling in the Collective dApp could open potential collaboration pathways in the future.

No additional funds will be required from the Collective Treasury aside from 1 USDRIF that will be used to indicate a successful proposal checkpoint.

We therefore wish to create a PROTOTYPE screen to test this new SANDBOX and will add this in the “BETA Tools” section of the Collective dApp. This will provide an initial User Experience playground to help learn and understand how Async Vaults and related mechanics can interact with other protocols in the Rootstock ecosystem for the good of the community.

Prototype testers will be able to deposit rBTC to earn test yield through predefined on-chain rules, explore how vault shares appreciate over time, and do so safely within Sandbox test limits.

By supporting this proposal, the Collective plays a role to help accelerate the efforts of RootstockLabs providing early access with clarity and control, better ecosystem readiness, improved understanding of async vault mechanics, and a collaborative pathway between RootstockLabs, developers, builders and the community.

The SANDBOX Approach will be used in order to meet the Product Delivery objectives of RLabs.

The SANDBOX will operate with full transparency showing all business flows through all parts of the Vault contracts from deposit all the way through to Yield generating protocols or simulations that may be tested with small amounts.

The Sandbox will allow small test deposits of up to 100 USD of rBTC to clearly demonstrate sandbox business flows following a Whitelisting process. To register your interest in taking part in the Sandbox testing please visit https://www.rootstocklabs.com/institutional/ and click “Talk to the team”.

The SANDBOX will be integrated into the DAO dApp to provide an initial User Experience playground. The Sandbox may be offered to select partners for initial testing should this prove useful prior to any subsequent Products being launched.

We will explore whether the DAO can be used to help accelerate other parts of the Sandbox delivery, this could include but is not exclusive to: 1/collecting/simulating the test yield amounts, 2/governance of contracts, and 3/dApp level asset conversion for example RIF to rBTC, USDRIF to rBTC swapping.

Benefits to the community

  • Simple access to yield test mechanics using rBTC, with full user control

  • Transparent vault logic, visible directly through smart-contract data to increase awareness of vaults in the ecosystem

  • Safe early participation under Sandbox limits with fast feedback loop

  • Improved understanding of NAV mechanisms can work on Rootstock

  • A structured feedback loop between users, the Collective, and RLabs

Implementation Plan

Phase I — Integration & Review

  • Integrate vault interfaces and live reporting

  • Add simple explanations of how deposits, shares, and NAV operate

  • Test flows with whitelisted RLabs and early community reviewers

Phase II — Launch of Sandbox Mode

  • Enable live interactions with deposit caps

  • Display transparent vault data in the dApp

  • Enable some or more simulated strategies

Phase III — Feedback & Iteration

  • Gather insights from users and partners

  • Improve UX and transparency features

  • Explore Swapping functionality to allow rBTC in-flows

  • Prepare for responsible future scaling by RLabs

Conclusion

Introducing the BTC Vault SANDBOX Prototype through the RootstockCollective dApp gives the community responsible, transparent, and user-directed access to a new vault primitive. Users can deposit rBTC through predefined on-chain rules, explore how vault shares appreciate over time, and do so safely within Sandbox limits.

Please support this proposal to help us grow the Rootstock ecosystem.

Toby Box

On behalf of RootstockLabs

5 Likes
Rootstock Collective Governance-at-a-Glance 26-03-26
2

This can be exciting, seems demand for yield on BTC is pretty high. What timeline do you consider for the three phases, roughly?

2 Likes
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We naturally support this initiative, which aims to create a controlled environment to test yield generation strategies on rBTC at practically no cost to the DAO. Advancing in this direction is key to drive a qualitative leap in the Rootstock ecosystem and, in the near future, enable new DeFi integrations for yield for BTC, which has significant potential and demand.

That said, we have a few questions:

  • What will be the source of the yield in this case? Will it be similar to the USDRIF model, based on strategies implemented by Tropykus and Avalon?
  • In that context, what types of yield strategies are expected to be used for rBTC in this case?
  • Should we expect a user interface similar to that of USDRIF?
  • Once the test environment is up and running, roughly how long do you think it will take before conclusions can be drawn that will lead to the scale of real solutions and yield tools for rBTC users?
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SEEDGov Delegate Thread
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probably 1-2 months per phase, roughly.

1 Like
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yield will initially be simulated with very small amounts to post different NAVs to the vault. This will simulate a trading strategy that could be for example providing off chain yield in the future should a future full product be launched or explored.

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yes the user interface will be similar to the USD Vault sandbox, with some additional features to support the sync user journey.

there is no hard deadline for running the sandbox but I imagine around 2-3 months.

2 Likes
7

Thanks for putting this together, @tobyj and the RLabs team.

As @SEEDGov put it well, this proposal creates a controlled environment to test yield generation strategies on rBTC at practically no cost to the DAO. This framing really captures why the vault is a sensible step forward. The community gets the opportunity to test a prototype, the treasury carries almost no risk, and RLabs gets feedback.

Appreciate the continued effort from RLabs to engage the community in this way and look forward to seeing how the BTC Vault Sandbox evolves across the phases.

2 Likes
8

Thank you, @tobyj for this proposal that builds upon the existing Sandbox framework from the USD vault prior proposal that you referenced.

We are supportive of this proposal, and see it as low risk and no cost (other than a symbolic 1 USDRIF). That allows for the natural evolution of the dApp to be a testing ground for how Bitcoin-backed assets can interact with yield-generating protocols in a controlled environment.

However, we have a couple of clarification questions to help us understand the process:

  1. The proposal mentions a whitelisting process via the “Talk to the team” link. What are the specific criteria for community members to participate in the sandbox, and is there a cap on the total number of participants?

  2. Phase II mentions simulated strategies. Can you clarify which protocols or simulations will be used to generate the test yield for rBTC? Will these be internal simulations or integrations with existing Rootstock protocols like Money on Chain, Sovryn, or another partner?

  3. Finally, as mentioned by @Axia in the prior proposal, is there an opportunity for the delegates to be beta testers for this Sandbox (and any other future products), and if possible, a dedicated post on forum for testing feedback?

1 Like
9

Testing Async BTC Vaults in a sandbox is a reasonable approach, especially given how limited rBTC yield options are today. Appreciate the potential upside of this proposal @tobyj

Async vault mechanics introduce delays that are not common in typical DeFi UX. What is the expected delay for deposits and withdrawals? Just want to make sure users won’t get confused or assume funds are stuck when interacting with the vault.

Also what metrics will be used to evaluate whether this should move toward production? (volume, number of users,..)

2 Likes
Ignas Delegate Thread
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thank you for the review @Axia I think your summary is excellent in terms of benefits and win/win scenarios for the good of the community.

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thank you @DAOstar_gov for your comments. Great questions btw, which I will answer below here…

1/ What are the specific criteria for community members to participate in the sandbox, and is there a cap on the total number of participants?

→ for initial testing under the 100 USD threshold contact details and wallet registration will be required. This can be discussed with the team as per the link. No technical cap, although operationally it will be more first come first served for those that are perceived as committed ecosystem contributors likely to provide feedback to the Vault.

2/ Phase II mentions simulated strategies. Can you clarify which protocols or simulations will be used to generate the test yield for rBTC?
→ a manual test funding will be used (provided by RLabs) to simulate small fluctuations in the NAV.. No real investments will be made for these simulations in the initial testing.

2b/ Will these be internal simulations or integrations with existing Rootstock protocols like Money on Chain, Sovryn, or another partner?
→ later, as a subsequent step this is a great idea, but for now, baby steps.

3/ Finally, as mentioned by @Axia in the prior proposal, is there an opportunity for the delegates to be beta testers for this Sandbox (and any other future products), and if possible, a dedicated post on forum for testing feedback?

→ yes for sure. We will make small steps and first test with RLabs team members, then broaden to registered users who have contacted the team. Your idea about a post to share feedback is a really good one - I hadn’t thought to do this but yes can certainly do this thank you !

2 Likes
12

Thankyou @Ignas for your support and also great questions….

1/ What is the expected delay for deposits and withdrawals? Just want to make sure users won’t get confused or assume funds are stuck when interacting with the vault.
→ for the testing in the Sandbox this will be a few days to a week (7 days max) as this is the initial config for the epoch length (deposit window). If we have staff holidays then this could be delayed slightly as we don’t have a dedicated team for this testing.

2/ Also what metrics will be used to evaluate whether this should move toward production? (volume, number of users,..)
→ RLabs internal product metrics and validated demand. Its possible we will split this out into a dedicated product if needed, thanks to the Collective’s support to accelerate this so far.

2 Likes