Collaterize HedgePay

Problem Statement

The objective of HedgePay is to help people in LATAM protect themselves from inflation by giving them access to BTC and DeFi, while still being able to get liquidity when they need money to live or fund their projects.Instead of selling their BTC, users can lock it as collateral and borrow against it. For users who don’t want to rely on centralized stablecoins like USDC/USDT (which can be frozen by issuers), we also explore DOC (Dollar-On-Chain) on Rootstock: a USD-indexed stablecoin backed by BTC and harder to censor.We consider three main scenarios:Invest in BTC from USDC without using a CEX Users start from USDC and convert into BTC via decentralized bridges and swaps, without touching centralized exchanges.Use BTC as collateral to borrow while staying long BTC Users who believe in BTC long term can post BTC as collateral, borrow stable value, and still keep their BTC exposure instead of selling.Use DOC as a BTC-backed, censorship-resistant stablecoin Users who want to avoid stablecoins backed by entities like Circle/Tether can hold or borrow DOC, a BTC-backed USD-indexed stablecoin on Rootstock.

Solution

HedgePay is a multichain wallet focused on stablecoin UX, using USDC on Stellar as the main entry/exit point and Rootstock as the BTC collateral layer.We define the following flows:Buy BTC (no collateral)User holds USDC on Stellar Bridge USDC Stellar → USDC Base (~2 minutes) Bridge USDC Base → Rootstock Swap USDC → rBTC on RootstockBuy BTC and collateralize it to borrow XUSD/DOCBridge USDC Stellar → USDC Base Bridge USDC Base → Rootstock Swap USDC → rBTC Convert rBTC → WrBTC Call Sovryn iTokenLogic smart contracts to: Use WrBTC as collateral Borrow XUSD / DOC against that BTC position Bridge XUSD/DOC → USDC on Base Bridge USDC Base → USDC StellarThis lets the user keep BTC exposure while receiving spendable stablecoins back on Stellar.Get DOC (BTC-backed stablecoin) directlyBridge USDC Stellar → USDC Base Bridge USDC Base → Rootstock Swap USDC → DOC on RootstockThe hackathon focus is on the collateralization path (flow 2) and the integration with Sovryn’s iTokenLogic contracts to turn BTC into productive, censorship-resistant collateral