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

[tobyj]

RootstockLabs wishes to grow and evolve the ecosystem through broader use of USDRIF and is exploring new tools to connect protocols and interoperate with USDRIF.

As such, RootstockLabs proposes to use the RootstockCollective dApp as a prototype entry point for one such tool using ERC4626 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 a “BETA Tools” section of the Collective dApp. This will provide an initial User Experience playground to help learn and understand how ERC4626 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 USDRIF 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 stable-value yield 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 that may be tested with small amounts.

The Sandbox will allow small test deposits of up to 100 USD to clearly demonstrate sandbox business flows.

Amounts greater than 100 USD can be deposited in the other part of the Sandbox where depositors are invited, whitelisted, and have performed KYB. This will form a friends and family section of the Sandbox where any value that is received beyond the deposited capital is agreed to be returned.

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 will include but is not exclusive to: 1/collecting the test yield amounts, 2/governance of contracts, and 3/dApp level asset conversion for example USDT0 to USDRIF swapping.

Benefits to the community

• Simple access to yield test mechanics using USDRIF, 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 how stable-value yield 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 yield operate

• Test flows with 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 small number of test strategies (most likely on Avalon and Tropykus using existing pools)

Phase III — Feedback & Iteration

• Gather insights from users and partners

• Improve UX and transparency features

• Explore Swapping functionality to allow USDT0 in-flows

• Prepare for responsible future scaling by RLabs

Conclusion

Introducing the USD Vault SANDBOX Prototype through the RootstockCollective dApp gives the community responsible, transparent, and user-directed access to a new stable-value primitive. Users can deposit USDRIF 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

[Tane]

Thanks @tobyj for the proposal. We appreciate the thoughtful approach taken to introduce a Sandbox environment for testing USD Vault mechanics within the RC dApp. The focus on transparency, capped risk, and hands-on experimentation is commendable and aligns with the broader goal of fostering responsible innovation in the ecosystem.

However, we have a couple of questions and clarifications to be done.

First of all, where is the yield coming from? We are aware that this is an experimentation in the Sandbox environment but the plan to generate yield on the deposits should be clearly explained. We are also a little concerned that the existence of the “official” vault prevents 3rd party developers from working on similar protocols.

The governance process around participant selection and reporting is somewhat opaque. How will whitelisted users and partners be chosen, and what mechanisms will ensure that insights and outcomes from the Sandbox are transparently communicated back to the DAO for future decision-making?

The last one is more of a request; could you share what the UI/UX of this feature looks like? We are interested in seeing them because the user experience is the key to success of this feature.

[tobyj]

hi @Tane thank you for the amazing questions you are absolutely spot on - we plan to test 2 existing yield sources to begin with that already support USDRIF, Tropykus and Avalon. And this will provide great insights for the future where other protocols could also be used.

[Kaf_StableLab]

Thanks @tobyj for the proposal and the explanations shared so far.

This is a simple, low-risk addition that helps strengthen the USDRIF tooling on Rootstock. Having an ERC-4626 vault, even in Sandbox mode, gives the ecosystem a useful building block and lets RLabs test integrations with existing protocols without exposing the DAO or users to real risk.

The Collective’s role is minimal, the cost is symbolic, and the upside is clear so we’re supportive.

[tobyj]

thank you @Kaf_StableLab yes you are correct. This is a low cost way to accelerate these building blocks and test integrations with protocols whilst creating a new use case for USDRIF in the ecosystem.

[ChronoTrigger]

@tobyj This is very promising.
ERC-4626 has rapidly become the universal standard for tokenized yield on EVM chains, with billions in TVL across the largest mainstream protocols such as Aave, Morpho, Pendle, Ondo, EtherFi.
I think the ecosystem can only gain from this initiative, especially in these times where liquidity, RWA and stablecoin yields are the name of the game.
I hope this can lay the foundation of an ERC-4626 DeFi primitive, which can boost stablecoins and overall liquidity in Rootstock in the coming future.

[CodeKnight]

Very supportive. It should be a great tooling primitive to make it easier to attract defi protocols to Roostock.

[tobyj]

thank you @ChronoTrigger you are right that this is an emerging standard we must help to adopt in our ecosystem. I look forward to your engagement in this test phase.

[tobyj]

thank you @CodeKnight I hope so too. We want to continue to break down the barriers to entry.

[Ignas]

Having a controlled sandbox to test an ERC 4626 vault on mainnet is a low risk way to validate how USDRIF can integrate with yield based products across the Rootstock ecosystem.

I appreciate the team has set clear deposit caps and well defined test boundaries. We can understand user flows, share price mechanics and yield behavior before making any broader product decisions.

I have one question: What specific test strategies will be used on Avalon and Tropykus?

And my suggestions as we move forward are:

• Providing a simple dashboard to track vault metrics in real time.
• Clarifying the whitelist criteria for the >100 USD testing tier.

Overall, I will vote yes on this proposal. I believe this sandbox will generate meaningful insights and help prepare the ecosystem for more advanced USDRIF primitives in the future.

[tobyj]

hi @Ignas you are right in your statement around validating how USDRIF could work in the future in Vault related products and protocols. Your points around the desposit caps and test boundaries are appreciated - this is deliberate and I am glad you spotted this.

We plan to introduce a simple dashboard as part of the SANDBOX. This will be used as a starting point to explore more.

In Answer to your questions:

1/ what test strategies will be used?
Good. We plan to make use of 2 yield sources initially that already exist in the ecosystem so basically deposit pools for USDRIF for Tropykus and Avalon. The logic for allocations to these pools is codified in a simple allocation logic we will test and explore as part of this prototype - the logic looks for the higher rate at time of rebalancing and allocates to the pool with the higher rate. We plan to explore how the rates can be managed and incentivised as part of the prototype testing.

2/ Whitelist criteria for >100 USD will include KYC/AML steps and other criteria and will begin with a conversation with the RLabs Institutional team in the first instance .

Thank you for your support and great insightful questions - keep them coming !

[PGov]

We think this is pretty promising, and will be a great tooling feature to make it more favorable to attract defi protocols to Roostock! Great work team!

[tobyj]

thank you for your feedback on this exciting proposal @PGov . Yes it should be a very beneficial tool to experiment with and can only help to attract other protocols and also show how USDRIF is being used in the ecosystem raising awareness.

[404Gov]

Voted FOR this proposal. It’s great to see this type of experimentation aimed at enhancing the optionality and interoperability of USDRIF. After speaking with @tobyj, my understanding is that the first phase will enable users to deposit USDRIF and earn yield from a basket of yield sources. Subsequent phases, likely in January, will enable swaps from USDT0 and later USDC into USDRIF.

Since this is a prototype for testing, the goal is not to strengthen DeFi metrics such as TVL, liquidity, and volume, but rather to test new features before they are rolled out in production.

That said, it would be prudent for delegates to start thinking about how to strengthen USDRIF’s metrics to support accessibility, use, and low fees for users. Now that @Ignas has joined the collective, it would be valuable to hear their perspective.

Lastly, I think it’s a great idea to have delegates and the broader community participate in early product testing. Delegates, and the broader community, are some of the most committed users — having close proximity and access to the product team will significantly shorten feedback loops and allow for rapid iteration.

Looking forward to contributing!

[tobyj]

thank you @404Gov for your feedback. Yes you are 100% correct in your understanding, and I love the suggestions for the future around USDRIF and Delegate engagement in this growth area of functionality and use cases for the ecosystem.

[Tane]

@404Gov

Lastly, I think it’s a great idea to have delegates and the broader community participate in early product testing.

We think it’s a great idea, while some delegates, including us wouldn’t be comfortable using our delegate wallet for this kind of testing. We may need to have a way to link our testing activities to our delegate wallet. Simple signatures by etherscan would work.

[Eren_DAOplomats]

Hey @tobyj we have voted FOR this proposal the sandbox approach feels like the right balance of innovation and caution. We definitely need a way to separate our main delegate wallets from the testing environment for security reasons. Excited to help test this out!