Whitepaper

1.Abstract

SpinPigs is a decentralized Rotating Savings and Credit Association (ROSCA) protocol built on the Polygon blockchain. It combines the centuries-old concept of community savings groups with smart contract automation and DeFi yield generation through Aave V3. Members form 5-person groups, contribute weekly in USDT, and receive payouts in a lottery-determined order. Idle funds earn interest automatically, creating a savings mechanism that outperforms traditional interest rates for early-position members.

2.Introduction

Traditional ROSCAs (known as "altın günü" in Turkey, "chit funds" in India, "tandas" in Latin America) have been used for centuries as informal community savings mechanisms. However, they suffer from key problems:

• Trust: Members must trust each other to make payments. Default risk increases for later positions.
• Transparency: No verifiable record of contributions and payouts.
• No Yield: Pooled funds sit idle, earning nothing.
• Geographic Limits: Traditionally limited to local communities.

SpinPigs solves these problems by replacing trust with smart contracts, providing full transparency through blockchain records, generating yield through DeFi integration, and enabling global participation.

3.System Architecture

The protocol consists of three core smart contracts deployed on Polygon:

4.Collateral Model

Collateral eliminates the trust problem inherent in traditional ROSCAs:

• Maximum deposit: All members deposit the maximum collateral (3x weekly amount) when joining.
• Position-based refunds: After the lottery, excess collateral is refunded. Position 1-2 get more back; position 5 retains full collateral.
• Auto-deduction: If a member misses a payment, their collateral covers it automatically.
• Penalty system: Persistent non-payment results in collateral forfeiture, redistributed to affected members.

This ensures that every scheduled payout can be fulfilled regardless of individual member behavior.

5.Yield Strategy

Funds that would otherwise sit idle are put to work through Aave V3:

• Supply: Weekly payments and collateral are supplied to Aave V3, earning variable interest as aUSDT.
• Withdraw: When a payout is due, the exact amount is withdrawn from Aave (principal + interest).
• Interest distribution: 80% of yield goes to the group member receiving the payout. 20% is the platform fee.
• Rounding safety: The contract tracks actual USDT balance changes (not intended amounts) to handle Aave V3 rounding.

Earlier positions benefit more because their contributions sit in Aave longer, accumulating more interest before their payout week.

6.Position Lottery

When the 5th member joins a group, the lottery executes automatically:

• Positions 1-4 receive payouts in weeks 1-4 respectively.
• Position 5 does not receive a payout week — their collateral covers their contribution share.
• Randomness is derived from on-chain data (block hash, timestamp, addresses) for fairness.
• All lottery results are recorded on-chain and publicly verifiable.

7.Payment Flow (MINI Pool Example)

Position 5 contributes each week but does not receive a payout week. Their total contribution ($20) is covered by their collateral deposit.

8.Smart Contract Security

• OpenZeppelin: Built on audited OpenZeppelin contracts (Ownable, ReentrancyGuard, Pausable).
• Pausable: Owner can pause all user-facing operations in emergencies.
• Rate Limiting: 5-minute cooldown between group joins to prevent spam.
• Emergency Withdraw: Owner can recover all funds in case of critical vulnerability discovery.
• Access Control: AaveV3Strategy is owned by CollateralManager — only the contract system can supply/withdraw funds.
• Verified Source: All contracts are verified and open-source on PolygonScan.

9.Fee Structure

10.Roadmap

11.Contract Addresses (Polygon Mainnet)

All contracts are verified and open-source on PolygonScan.