Bastion Protocol Application

[kunal-drall]

Project Abstract

Bastion Protocol introduces Circle-Based Finance (CBF) to the Polkadot ecosystem - a novel approach where users form "circles" (trusted social groups) to collectively pool assets, participate in auctions, and manage staking operations. Unlike traditional individualistic DeFi, Bastion leverages social trust and group coordination to enable collaborative financial primitives that mirror real-world community finance models like lending circles and investment clubs.

This Level 1 grant will deliver a core Substrate pallet (pallet-circles) implementing group identity management, collective deposits, group-based staking, and circle auctions, along with a demo chain and React dApp. The project fills a significant gap in Polkadot's DeFi stack by providing social finance primitives as first-class runtime modules, enabling new forms of decentralized community finance and serving as a foundation for future lending, borrowing, and cross-chain integrations.

Grant level

• Level 1: Up to $10,000, 2 approvals
• Level 2: Up to $30,000, 3 approvals
• Level 3: Unlimited, 5 approvals (for >$100k: Web3 Foundation Council approval)

Application Checklist

• The application template has been copied and aptly renamed (bastion_protocol.md).
• I have read the application guidelines.
• Payment details have been provided (Polkadot AssetHub (USDC & DOT) address in the application and bank details via email, if applicable).
• I understand that an agreed upon percentage of each milestone will be paid in vested DOT, to the Polkadot address listed in the application.
• I am aware that, in order to receive a grant, I (and the entity I represent) have to successfully complete a KYC/KYB check.
• The software delivered for this grant will be released under an open-source license specified in the application.
• The initial PR contains only one commit (squash and force-push if needed).
• The grant will only be announced once the first milestone has been accepted (see the announcement guidelines).
• I prefer the discussion of this application to take place in a private Element/Matrix channel. My username is: @kunal-drall:matrix.org

[github-actions]

CLA Assistant Lite bot All contributors have signed the CLA ✍️ ✅

[kunal-drall]

I have read and hereby sign the Contributor License Agreement.

[Noc2]

Thanks for the application, and sorry for the delay here. To be honest, it's not fully clear to me what problem you are trying to solve or what the USP of your solution is. Also, what are the potential competitors of your solution? Furthermore, it looks like you already have an MVP: https://bastionprotocol.pro/dashboard. What feedback did you get so far?

[kunal-drall]

Thank you for the feedback! Let me clarify:

Problem We're Solving

Three critical gaps in DeFi:

1. Over-collateralization excludes most users: Current DeFi requires 150-200% collateral. Billions of creditworthy people can't participate because they lack crypto wealth, despite traditional finance successfully using social trust (credit unions, lending circles) to reduce collateral.

2. No native group coordination tools: Communities and DAOs want to pool funds collectively, but only have multisigs (transaction signing only) or custom smart contracts (expensive, not standardized). No composable primitives exist for group financial operations.

3. Informal lending circles can't access DeFi: ROSCAs globally manage billions ("stokvels" in Africa, "tandas" in Latin America, "hui" in Asia) but remain informal, fraud-prone, and geographically limited.

Solution: Native Substrate runtime primitives enabling groups to pool assets, make collective decisions, and participate in DeFi together while leveraging social trust with blockchain transparency.

Our USP

1. Runtime primitives (not smart contracts): Native FRAME pallets on Asset Hub provide protocol-level security, composability, and better performance than smart contracts.

2. Composable infrastructure: Like pallet-assets enabled an asset ecosystem, pallet-circles enables a social finance ecosystem. Any parachain can integrate our pallet.

3. Hybrid trust model: Bridges algorithmic trust (DeFi's over-collateralization) and social trust (traditional lending circles) using group accountability + on-chain transparency.

4. First-mover advantage: No other project provides runtime-level social finance primitives in any blockchain ecosystem.

Competitors

Within Polkadot:

• Acala, Parallel: Individual DeFi only, no group primitives
• Astar: Smart contract platform, developers build from scratch
• None provide runtime-level group coordination primitives

Outside Polkadot:

• Gnosis Safe: Multisig for signing only, no governance/treasury management
• DAOs (Aragon, Moloch): Governance frameworks, not financial coordination primitives
• Lido, Rocket Pool: Protocol-specific pooling, not general-purpose primitives
• Web2 fintech (eMoneyPool): Centralized, not composable

Key difference: We're the only solution providing native runtime primitives specifically designed for group-based financial coordination that other developers can integrate.

MVP Status

Regarding https://bastionprotocol.pro/dashboard - this is frontend UI mockup only with no on-chain functionality. It demonstrates the intended user experience but contains no smart contracts or runtime logic.

We're planning to launch a waitlist for beta testing once we build the actual on-chain implementation (which is what this grant will fund). The mockup has helped us gather early interest and validate UX concepts with potential users.

The grant will fund building the actual runtime pallet, integrating with Asset Hub, and connecting the frontend to real on-chain functionality.

Happy to provide more details on any aspect! Would you like us to elaborate on the competitive analysis or technical architecture?

---

Does this address your concerns clearly?

[diogo-w3f]

@kunal-drall please note that the grants guidelines have recently changed
. It would be helpful if you could provide information showing how your project fits what we’re looking for, and how it avoids the categories listed under What Doesn’t Fit Our Program.

[kunal-drall]

@diogo-w3f Thank you for pointing me to the updated guidelines. I've reviewed the "What We're Looking For" and "What Doesn't Fit Our Program" sections carefully. Here's how Bastion Protocol aligns:

Strong Alignment with Program Priorities

User-Centric Innovation & Practical Value
Bastion addresses a real gap: communities worldwide manage billions through informal lending circles (ROSCAs, credit unions with $2.6T in assets), but lack transparent, scalable infrastructure. We're bringing proven traditional finance models to Web3 with blockchain security and transparency.

DOT Token Alignment
Circle treasuries hold and operate with DOT natively
Collective staking creates sustained DOT demand
Participation in parachain auctions pools DOT from multiple users
Multi-asset support via Asset Hub strengthens Polkadot's infrastructure

[semuelle]

Thank you for the application, @kunal-drall. I like the idea of bringing enabling community-based finance. It reminds me of Circles.
What I don't understand is where the pallet will be deployed. You write that it's "for Polkadot's Asset Hub" - but Asset Hub is is system chain, where the community decides on changes and adding pallets is rare. So, any developments should be discussed with the community beforehand. Or are you planning to deploy your own parachain and leverage AssetHub? Have you talked to any other parachain teams if they would be interested in adopting the pallet?

[kunal-drall]

Thank you for the application, @kunal-drall. I like the idea of bringing enabling community-based finance. It reminds me of Circles. What I don't understand is where the pallet will be deployed. You write that it's "for Polkadot's Asset Hub" - but Asset Hub is is system chain, where the community decides on changes and adding pallets is rare. So, any developments should be discussed with the community beforehand. Or are you planning to deploy your own parachain and leverage AssetHub? Have you talked to any other parachain teams if they would be interested in adopting the pallet?

@semuelle Thank you for the clarification question!

Deployment Strategy:

We will deploy our own parachain with pallet-circles integrated into the runtime, rather than adding the pallet directly to Asset Hub.

Asset Hub Integration:

• Circle treasuries will leverage Asset Hub's multi-asset functionality via XCM
• Circles can hold DOT, USDC, USDT, and other Asset Hub assets
• Cross-chain asset transfers between our parachain and Asset Hub
• This follows the Polkadot architecture where parachains specialize while Asset Hub provides asset infrastructure

Composability:
The pallet is designed as reusable infrastructure - other parachain teams can:

• Integrate pallet-circles into their own runtimes
• Build applications on top of our parachain
• Use it as reference implementation for social finance primitives

Adoption Interest:
We haven't yet conducted formal outreach to other parachain teams, but plan to:

• Share the open-source pallet upon completion
• Present at Polkadot developer events
• Engage with DeFi-focused parachains (Acala, HydraDX, etc.) about integration

[semuelle]

Thanks for the update, @kunal-drall. Could you add a bit more details on your parachain plans? What experience with Polkadot as a platform and as a community do you have so far? Also, since running a parachain is a fairly time-intensive task, how are you planning to fund it?

[kunal-drall]

Thanks for the update, @kunal-drall. Could you add a bit more details on your parachain plans? What experience with Polkadot as a platform and as a community do you have so far? Also, since running a parachain is a fairly time-intensive task, how are you planning to fund it?

@semuelle Thank you for the feedback. We've updated the application to address all your questions:
Bastion-Protocol@95828c1
Key updates:

• Added our Polkadot experience
• Clarified deployment strategy (testnet focus, with mainnet path via parachain integration or external funding)
• Added business model and sustainability section with clear revenue streams and timeline
• Updated team experience and future plans sections

[semuelle]

Thanks for the updates, @kunal-drall, and thanks again for the application and the effort you put into it. I still find community-based finance a great idea overall and would like to see more of it on Polkadot. However, the committee discussed the application and decided not to support it. Main reason being that such significant external contributions to parachains are rare, and running a dedicated parachain would require more thorough deliberation as it is a time-consuming task.

I would like to suggest that you perhaps start a conversation with other ecosystem members (such as on the Polkadot Forum) to discuss the idea and possibly find a way to collaborate on this with an existing parachain team or to write a treasury proposal together with them. Either way, thanks again for the application, and best of luck with the project.