We are co-creating an eco-system of connected blockchain based tokens across Kenya to help communities build their own economies in times of crisis and recovery – and we need an entire technical blockchain eco-system to do it.
A Community Inclusion Currency (CIC) is a financial instrument that allows for the issuance of a token that is backed by goods or services to also have a bonded collateral. We use the Bancor contract suite and basic bonding curves created by Eyal Hertzog, Yudi Levi and team.
For the CICs we use now and will be empowering communities and aid organizations to create, they have a pool with only one token (right now) in reserve (soon to be DAI (bridged to xDAI as the reserve) )
The CICs are backed by goods and services of the creator as well as bonded collateral. In the case of Grassroots Economics and Red Cross that is donor funds and donated items, phone and field support, training. There is also a (soon to be bonded $40k in reserve)
A core idea behind CICs is that anyone should be able to create a medium of excahnge based on what they value. A group of businesses in Kenya should be able to make a token against the promise to redeem it for their tomatoes, school fees, and so on. These credits need some collateral behind them, so that we can de-risk our trust in their tokens and so we can safely value them against other such CICs and national currency.
The interoperability of these tokens between each other and national currency make them viable for real people and businesses and organization – not just tech bubbles. What if this interoperability was extended into the blockchain network and entire tech eco system?
What if validation nodes backed a CIC with block validation (GAS) costs and bonded that gas to a stable coin? Could there be a Gas CIC? A short primer on Gas.
Say a blockchain was built with a bonded native token (like we create CICs)call it cicG (CIC Gas). Say a group of block validators measured 4 Million USD in the cost of server fees, devOps and node maintenance for 10 years and issued those tokens to themselves and any contributors in a hatch phase. Say the initial supply of cicG tokens is 4 Million tokens and the validators guarantee that these tokens will be accepted for gas fees (as designed always 1:1 with their reserve). And what if there were 1 Million DAI (bridged to xDAI or some table token) as the bonded collateral (reserve) for these tokens.
As validators receive cicG as GAS and liquidate it for DAI – they reduce the exchange value of cicG <> DAI and allow people to add more DAI to reserve and cheaply mint additional cicG in order to pay for gas fees cheaply (filling back the reserve of DAI). This creates a constrained and autonomous market for cicG while allowing validators to pay for maintaining their nodes. The more demand for gas on the blockchain the higher the exchange value for cicG will become – benefiting cicG holders and those building the ecosystem of traders.
What if communities in Kenya or aid organizations using their own CICs could pay for gas costs themselves by converting their tokens into cicG automatically? Conversion fees between cicG<>DAI could also go into the reserve pool encouraging cicG holders. (All functions already built into the Bancor contracts)
What other services besides, hair cuts, tomato farming and block validation could create interoperable tokens? – Looking inward at our donor funded work here at Grassroots Economics, how about all the services we offer as a non-profit such as small business networking and marketing, phone support, and training?
Let’s not assume that everyone can use ETH or DAI tokens as a medium of exchange right off the bat! Bonding curves give us a way to create credit based on services with trusted collateral and build economics systems that have value right now for people who need it. Read more about our efforts in Kenya with Red cross.
In order to spread adoption of a new economic models that heal economic trauma and use blockchain as a source of truth that connects us, we need bonded - inter-operable systems at all levels.
For more blockchain based discussion on CICs you can visit https://t.me/CICBlockchain and visit our GitLab https://gitlab.com/grassrootseconomics/cic-docs/-/blob/master/README.md