What is ROSCA - Trusted Lending Circles?



ROSCA stands for Rotating Savings and Credit Association.

A ROSCA is an agreement between a group of trusted parties, who agree to contrbute a fixed amount of money at set intervals, called rounds. For example, you and three friends could agree to contribute $10 per month. In this case, each round is one month long, and the ROSCA will contain four rounds, one for each participant.

At the end of each round, the pot should contain the sum of everyone's contribution. In our example, that would be $40. Users bid on this amount in a reverse auction manner, where the lowest bid wins.

The winning bidder then receives their bid. For our case, if someone bid $35, they would receive $35, with the remaining $5 being split between all of the participants.

In the event that no bids are received, the winner of the pot is chosen psuedo-randomly.

Each round is won by only one user (in the simplest case), and each user is guaranteed to win exactly one round. This ensures a pareto optimal outcome according to many researchers, where everyone is at least as well off as they would have been had they saved the money alone.

Below is an example of a ROSCA going through all four rounds.



Step by Step Walkthrough


Learn how to participate in a ROSCA through the WeTrust website by watching this video!



FAQ


Right now, you will need an Ethereum wallet and a Web3 compatible browser. The easiest way to get both of these things, is by installing MetaMask.


Currently our platform only runs on the Ethereum blockchain, but we plan to support as many as we can in the future.


Absolutely, we have a demo site set up at our demo site, which runs on the Ropsten testnet. You can use the same login information, but you will need to make sure you are on the testnet in your browser!


Currently, WeTrust runs on the Ethereum blockchain, and participation in a ROSCA can only be achieved through the use of Ether. No other tokens are accounted for when participating in a ROSCA.


The contract code is completely open-source. You can view it on our GitHub. The code that runs this website is proprietary software, and owned by WeTrust. We have chosen to do this so that it is more difficult for anyone to profit from our hard work.


WeTrust never receives or has control of your funds, period. All contributions are made directly to ROSCA contracts from a user’s own Ethereum wallet. WeTrust can only withdraw its fees from these contracts, and nothing more than that. The only other users who are able to withdraw from the contract are those specified as participants, and each can only withdraw their fair share. You can verify this yourself by reading through the code on our GitHub.