[TEMP CHECK] BizMarket <> Aave (Testing DeFi Yield With Real-World Businesses)

[KarlaGod]

Author: KarlaGod - Bitsave Protocol
Date: 2025-01-29

SUMMARY

My proposal seeks Aave Dao support to run a small, time-boxed experiment testing whether Aave capital can be deployed into tokenized real-world businesses via BizMarket, generating sustainable yield while onboarding new real economic actors into the Aave ecosystem.

I built BizMarket to tokenize real, operating businesses as RWAs, enabling them to access onchain capital for growth and become yield generators for onchain users.

These businesses already exist, generate revenue, and pay fees to be listed and attested onchain.

This proposal requests $100,000 USDC from Aave DAO for a 4-month pilot deploying capital into tokenized real-world micro-businesses via BizMarket, targeting 4% net yield in 4 Months, while onboarding 500 emerging market businesses to the Aave ecosystem.

TLDR;
I summarized my proposal in this Public 2-minute Pitch

MOTIVATION

The Opportunity

DeFi has largely proven product-market fit with:

• Crypto-native users
• Financial primitives (lending, leverage, LPing)
• Digital collateral

I believe that the next growth phase for DeFi protocols like Aave is real economic adoption by businesses that:

• Do not start with wallets
• Operate in emerging markets
• Generate real cash flows
• Need predictable, non-extractive capital

I built BizMarket to bridge this gap.

We work directly with micro and small businesses (currently in Africa and LATAM), tokenize their businesses onchain, and structure debt instruments that can be financed by DeFi capital.

About the Author

I’m KarlaGod, a Web3 business developer focused on designing low-risk, transparent DeFi infrastructure for real-world users.

I’m the founder of BizMarket by Bitsave Protocol, a savings and yield protocol exploring responsible on-chain yield.

I’m Lead partner at B<>rder/ess a Public Good that raises the next generation of web3 developers, contributors, creatives and builders from today’s universities.

My work sits at the intersection of DeFi primitives, risk-aware design, and grassroots adoption, with experience running grant-funded initiatives like Web3 For Universities Round during Gitcoin Grants round 24, governance participation, and yield experiments aligned with long-term ecosystem health.

Proposal Focus
My proposal builds on that background to explore how Aave can power transparent, resilient savings and yield strategies without introducing new counterparty risk.

What BizMarket Has Built (Current State)

BizMarket is already live and operating.

Today, we have:

• Tokenization infrastructure for real businesses
• Ethereum attestations for business identity and verification
• An operational onboarding flow for non-crypto businesses
• Businesses paying fiat listing fees to be tokenized
• Onchain representations that can support debt instruments

Key traction so far in the Bitsave Protocol ecosystem:

• 1,000+ users across Bitsave
• $30k+ TVS
• 2 ecosystem grants won
• Sponsored pitch at Devconnect
• BizMarket (V2) launched in December for businesses

How Businesses Are Onboarded (Without web3 Blockers like wallets etc)

You can request access to this folder to view pictures and other details of businesses listed (For Admin Purposes only).

Most businesses we work with do not interact with wallets directly.

Our process:

1. Businesses complete physical registration forms
2. Pay listing fees in local fiat
3. We convert fiat → USDC + ETH (Base/Ethereum)
4. BizMarket registers the business onchain
5. Ethereum attestations are issued for business data
6. Businesses become eligible for onchain debt instruments

This allows Aave and ecosystems that partner with us to gain exposure to real businesses without requiring those businesses to be crypto-native.

SPECIFICATION

The Experiment Structure

How Capital Flows:

BizMarket sources and tokenizes real businesses
↓
Businesses request growth capital (short-term debt)
↓
Debt instruments are issued onchain
↓
Aave capital is deployed into these instruments
↓
Businesses repay over time from real revenue
↓
Yield flows back to Aave treasury

All deployments, repayments, and performance metrics are tracked transparently via a public dashboard.

Specific Ask

Requested Allocation: $100,000 USDC

Source: Aave DAO Treasury - R&D/Innovation or Discretionary Funds Budget

Duration: 4-month pilot (120 days)

Expected Return: $104,000 USDC (4% net yield / ~12% APY)

Deployment Structure:

• Month 1: $100,000 deployed to 500 businesses ($200 average per business)
• Months 2-4: Weekly repayment collection and monitoring

Why This Amount:

• Large enough to validate model across 500 businesses
• Small enough to be immaterial risk to Aave treasury (<0.01% of TVL)
• Enables geographic and business-type diversification

How the Experiment Works

1. BizMarket sources and tokenizes real businesses
2. Businesses request growth capital (short-term debt)
3. Debt instruments are issued onchain
4. Aave capital is deployed into these instruments
5. Businesses repay over time from real revenue
6. Yield flows back to the allocated pool

All deployments, repayments, and performance metrics are tracked transparently.

Pilot Roadmap and Timelines

4-Month Execution Timeline

Phase	Timeline	Milestone	Target Metrics	Deliverable
Phase 1: Preparation	Weeks -2 to 0	Governance approval + setup	Vote passes, capital transferred	Deployment wallet funded
Phase 2: First Deployment	Month 1 (Weeks 1-4)	Deploy $100k to 500 businesses	500 businesses funded, $200 avg	Public dashboard live
Phase 3: Execute Amortization	Month 2 (Weeks 5-8)	Collect weekly payments and measure feedback.	500 total businesses, 3+ countries.	Weekly Report posted
Phase 4: Settlement	Month 3-4 (Weeks 9-16)	All debt instruments mature, final collections	95%+ capital + yield returned	Final Report + Phase 2 proposal
Phase 5: Decision	Month 5	Aave governance evaluates results	Vote on: sunset, iterate, or scale	Governance snapshot vote

Key Performance Indicators (KPIs) Tracked Monthly

Capital Metrics:

• Total deployed: $X / $100,000

• Total returned: $X (principal + interest)

• Outstanding: $X

• Default rate: X%

Business Metrics:

• Businesses funded: X / 500 target

• Active repayments: X businesses on schedule

• Delinquent (>7 days late): X businesses

• Defaulted (>30 days late): X businesses

Geographic Distribution:

• Nigeria: X businesses, $X deployed

• Kenya: X businesses, $X deployed

• LATAM: X businesses, $X deployed

• Other: X businesses, $X deployed

Operational Metrics:

• Average time from application to funding: X days

• Average business loan size: $X

• Repayment consistency: X% on-time payments

• Collection success rate: X% of delinquent resolved

Yield Metrics:

• Gross yield generated: $X

• Operational costs: $X

• Net yield to Aave: $X

• Annualized return: X%

All metrics published monthly in Aave governance forum + public dashboard.

What Aave Gets in Return

1. +4% On Principal

If Aave allocates $100,000 to this yield experiment, the return would be

$104,000 in 4 Months

2. Real-World Yield Experimentation

• Exposure to yield options that are not dependent on crypto market cycles

3. Ecosystem Expansion

• Onboarding real businesses as future Aave users

• Creating long-term protocol advocates (“real-world maxis”)

4. Thought Leadership

• Aave becomes one of the first DeFi protocols to:

  • Systematically farm real businesses

  • Prove DeFi utility beyond crypto-native users

4. Data & Learnings

• Performance data on real-world business debt

• Insights for future RWA strategies

Risk Management Framework

Capital Protection Measures:

Diversification Requirements:

• 500 businesses minimum (no single business concentration risk)
• Average loan size: $200 per business
• Geographic spread: Nigeria (40%), Kenya (30%), LATAM (20%), Other (10%)
• Industry diversification: Food/retail (40%), Services (30%), Manufacturing (20%), Other (10%)

Business Selection Criteria:

• Minimum 3 months operational history
• Verified monthly revenue > $500
• Community vouching from verified BizFi Merchant
• Ethereum attestation of business identity and data
• Photo evidence (storefront, inventory, customers)

Default Mitigation:

• Grace period: 7 days for missed payments
• Workout process: Direct contact + local merchant mediation
• Collection timeline: 90-day maximum collection effort before write-off
• Expected default rate: < 5%

Real-Time Monitoring:

• Weekly payment tracking dashboard (public)
• Automated alerts for payment delays > 3 days
• Monthly business check-ins via local BizFi Merchants
• Community reporting system for struggling businesses

DISCLAIMER

• BizMarket earns fees from listing fees and small deployment spreads
• My personal reputation and protocol success depend on this pilot

Third-Party Involvement:

• No third parties compensating me for this proposal
• No hidden partnerships or revenue-sharing arrangements
• Full transparency on all fees and incentives

Risk Disclosure:
This is a first-of-its-kind experiment. Aave should treat this as an R&D pilot with inherent uncertainty.

• This is an unproven model (first institutional deployment)
• Capital loss is possible (5% default risk estimated)
• Operational challenges may arise in emerging markets
• Regulatory environment could change

Downside Scenario

• A limited 1–5% allocation of R&D or discretionary funds underperforms
• The experiment is sunset with no impact on core protocol operations
• BizMarket absorbs the reputational cost and operational learnings
• I get a bad reputation in the ecosystem

Upside Scenario

• The pilot generates ~4% yield over 4 months
• Aave gains first-hand data on real-world business yield
• A new, repeatable RWA yield surface is unlocked
• Aave positions itself as a leader in real-economy DeFi adoption

What Happens If This Doesn’t Work?

Our Commitment to Transparency:

If this pilot underperforms or fails, we commit to:

Immediate Actions:

1. Full Disclosure: Publish a comprehensive post-mortem within 30 days of pilot conclusion
2. Capital Return: Return 100% of remaining/recovered capital to Aave treasury immediately
3. Data Sharing: Make all anonymized performance data available to Aave community for learning
4. Accountability: Accept full responsibility for underperformance publicly

Post-Mortem Report Will Include:

• Detailed breakdown of what went wrong and why
• Business-by-business performance analysis (anonymized)
• Operational challenges encountered
• Risk factors we underestimated
• What we would do differently
• Lessons learned for the ecosystem
• Recommendations for future RWA experiments (by us or others)

Reputational Consequences:

• My personal credibility in Aave and broader DeFi community damaged
• BizMarket’s ability to raise future institutional capital severely impaired
• Loss of trust from businesses and BizFi Merchants
• Potential end of BizMarket as a viable protocol

No Future Funding Requests Until:

• We demonstrate success in smaller, self-funded pilots
• We address all identified failure points with concrete solutions
• We regain community trust through transparent rebuilding
• At least 12 months have passed for reflection and improvement

Learning Contribution: Even in failure, this pilot will contribute valuable data:

• Real-world business repayment behavior in emerging markets
• Operational costs of managing micro-business debt at scale
• Effectiveness of community vouching vs. traditional credit scoring
• Which business types/geographies are most reliable
• What NOT to do in future RWA yield experiments

Success Metrics

The pilot will be evaluated on:

• Capital deployed vs. recovered
• Yield generated
• Repayment consistency
• Operational overhead
• Business retention and repeat demand

All metrics will be reported publicly to the DAO community.

NEXT STEPS

1. Open community discussion - (We are here)

2. Refine scope and allocation size

3. Finalize pilot structure

4. Launch experiment with transparent reporting

Community Engagement:

I’m actively seeking feedback on:

• Capital allocation size (too much? too little?)
• Risk parameters (too conservative? too aggressive?)
• Reporting requirements (what metrics matter most?)
• Exit conditions (what would trigger pause/stop?)

COPYRIGHT

This proposal is open-source and published under GPL-3.0 license.

Bottom Line: We’re asking Aave to take a calculated risk on an unproven model. If it fails, we won’t hide, deflect, or disappear. We’ll own it, document it, and help the ecosystem learn from it.

I’m happy to answer questions, provide additional documentation, or jump on calls with delegates.

KarlaGod
Founder Bitsave Protocol

[EzR3aL]

Hi,
Thanks for the proposal.
But please be aware that there is an approved template for creating a TEMP CHECK. So please follow the guidelines and edit this post.
Thank you

[claytonm]

Reviewed and here are my thoughts

1. I think 4 months is way too long for a first experiment. Most tech teams work in 1-2 week sprints internally.

For something like this, I’d imagine 1 month sprint could show yes/no value.

2. For the $30k, is that Total Value Saved, Secured, or should it be TVLocked?

When you show your traction and that amount, and then ask for $100k, there is a disconnect for me. That’s because it appears as if you’re asking for 3x more $ than you’ve gotten so far. While AAVE is huge, I think a smaller amount and timeline is win/win.

3. Whenever I see traction sections or value propositions in a pitch, I disregard them entirely unless there are actual stats assigned. We all know they can end up being wrong, but I want to see that stat/number and then ask how you arrived there. Whether it be actual from users/customers, or your theory, in which I get to learn more about how you think about running the business.

4. IMO you need to trim this by 50-75%. Less is more when pitching. The average VC spends ~100 seconds looking at a slide deck/memo. I’m sure reviewers are similarly minded.

GL and keep building!

[KarlaGod]

Thanks, where can I get the guidelines?

[KarlaGod]

Do I use this format?

[TEMP CHECK] Onboard rstETH to Aave V3 Prime Instance

[TEMP CHECK] Onboard rstETH to Aave V3 Prime Instance Author: ACI Date: 2024-12-18 Summary This is a TEMP CHECK to gauge community sentiment for onboarding P2P’s rstETH on AAVE V3 Ethereum. To align best with goals of all relevant stakeholders, this proposal suggests onboarding rstETH to the Aave v3 Prime instance. Motivation rstETH is a restaking vault token built on top of Mellow and Symbiotic. It currently has over $250m in TVL and is one of the largest Mellow restaking vaults. Adding rstE…

[EzR3aL]

They are pinned at the front/landing page. Use the TEMP CHECK first and read the rules. Thank you.

[KarlaGod]

Ok thanks, I’ll get on it right away.

[KarlaGod]

Hi Ez, I really couldn’t find any Temp Check template, could you help me point it out, it’s not any where on this front end.

It could also be that I’m a new member and that option isn’t open for me to access.

[EzR3aL]

Hi, you shared the screenshot with the framework. But here is the link [ARFC] ARFC and TEMP CHECK Framework - #20 by ACI

[KarlaGod]

Awesome, thank you so much.

[KarlaGod]

Hi Ez, done. I’ll go on to begin replying comments now, I can share this on discord too right?

[KarlaGod]

Hi Claytonm, thank you so much for your suggestions and questions. I’ll answer them:

1. The 4 Months is Not Negotiable

The fundamental difference between tech sprints and debt instruments, is that tech teams work in 1-2 week sprints because they’re building features. You can test a feature in 2 weeks.

We’re not testing a feature. We’re testing a system to see how, and the most profitable way DeFi can farm real-world businesses with RWA debt instruments.

This is our model

• Week 1-2: Deploy $100k to 500 businesses ($200 avg)
• Week 2-14: Businesses make weekly repayments
• Week 14-16: Final settlements and collections

If we compress this to 1 month:

• We deploy capital in Week 1-2
• We collect 2-3 weeks of payments maximum
• We return to Aave with ZERO data on whether businesses actually complete repayment cycles.

From experience with debt instruments (I used to run books for a co-operative), anything shorter than 90–120 days doesn’t capture:

• capital deployment lag into SMEs
• business operating cycles
• repayment/yield behavior under real conditions

You just cannot answer this in 1 month when the debt cycle is 90-120 days. So while we’ll absolutely run internal 2-week sprints, the 4 months is the minimum window to observe real economic signal, not just product usage. Shorter timelines tend to optimize for vanity metrics rather than durability.

We’re not testing Software Development, but Credit Risk Assessment

When traditional banks test new lending products, they don’t do “1-month sprints.”
They track:

• Full loan cycles (6-12 months for small business loans)
• Seasoning periods (how loans perform over time)
• Default curves (when do defaults typically occur?)

We’re already compressing this dramatically:

• Traditional small business loans: 12-24 months
• BizMarket debt instruments: 90-120 days
• We’re asking for 4 months, which is 50-75% shorter than traditional lending pilots

The 4-month timeline isn’t long is already aggressively short for credit risk validation.

2. TVS
bitsave.io is a savings protocol, we didn’t design it like a DeFi protocol, it’s SaveFi, which is a tool to enable web3 income earners save onchain in a goal oreinted, disciplined way.

Our SaveFi Protocol has;
i. No Pools - So the $30k+ (a lot more than that now) are in child contracts only connected to users wallet.

ii. A child/parent contract structure, where our parent contract only gives instructions to the child contract, every time a user creates a savings, they’re essentially creating a child contract that holds their funds only connected to their wallet, so we don’t route user funds anywhere else.

iii. TVS (Total Value Saved) instead of (TVL), so essentially, we don’t have access to user funds.

We built our SaveFi Model as a tool for personal savings, not a DeFi investment protocol or business capital deployment.

So these are different products with different risk profiles.

3. Proof of Traction
I understand your concerns about traction sections and value propositions, fair criticism. I think you should also understand that the data you see are only a fraction of the tough work backing them, so while it’s possible that one might have in the past gotten desensitized to them because of our industry’s peculiarities, I can get on a call with you to present our dashboard data and metrics.

These data are tracked from our contracts across various chains we’re deployed in.

I also recently tweeted about our January metrics, we did 20% in this month what we’ve accomplished in the last year. I hyperlinked the tweet above in 2i.

4. Attention Span
I understand your take, but if any protocol team or DAO doesn’t have the attention span to go through a 2-minute 30-second video pitch on why we should run a $100k DeFi yield experiment, then maybe I shouldn’t be taking their money.

It’s a signal that they might not be interested at all, and that’s fine with me.

I hope this clarifies. Thank you so much. Let me know if there are any other questions.