ReCommoning - Chama Cycles for Governance & Debt Reboot

Traditional women’s groups (chama in Kiswahili) come together to save and give eachother loans. Interest or fees are added to users' savings then divided back out and debts are cleared at the end of each year, and the cycle begins again. They also elect a new board of directors so it reboots the debt and governance cycles.

We are learning together about this absolutely virtuous cycle of ReCommoning where communities learn from mistakes and bring themselves together around common goals and problems!

Currencies: What if a group created their own credit not with just national currency backing but with commitments of goods and services as well? What if they still put in at least 25% collateral behind that (instead of 100% as they do now) and bonded it to the credit – such that anyone could add to the collateral to create more credit – and anyone could liquidate their credit to pull out the collateral.

We call this sort of credit system a Community Inclusion Currency (CIC) – or Sarafu ('currency' in Kiswahili as it is called in Kenya).

So far no one has built explicit debt reboots into CICs (blockchain based smart contracts)– but they do have some intrinsic ability to be steered socially into cyclical motifs - just as traditional groups have been cooperativley steering their chamas.

Based on action research done with community group participation this social function has been imagined to work something like this and will be tested over the next years:

Setup: A community group or chama puts in $1000 USD worth of digital asset into a reserve – which I’ll often call a collateral fund. The same community also commits to accepting (aka redeeming) 4,000 tokens 1:1 with 1$ USD for their goods and services. With this contract solidified (on and off chain): they create 4000 CIC (called locally X1 chama tokens) and 2000 (50%) of those tokens go to the liquidity providers (who contributed reserve and commitments) and 2000 go to voted on community projects with designated account holders that pay for things like communal farming and elderly care.

Trade: The CIC issuers here (a group of women running local businesses) trade with eachother to buy from eachother, they can also cash out (liquidate) their CIC for Kenyan Shillings – this will lower the excahnge value each time. The issuers are responsible to accept back as much as they use/spend- (a.k.a keeping a zero or neutral trade balance).

Other community members not part of the creation process may choose to work or sell goods for the CICs. By the end of the year the community fund of the CIC should be depleted. That means people in the community have done work for the commons and been rewarded fairly for it - they can then use these tokens to buy from eachother or committed goods and services from the issuers or liquidate their tojkens to pull out collateral.

.... And impotantly, now that the year is over the Chama needs to reCommon and clear debts and choose new community projects and governance. How can this bedone with a CIC?

Cycle: Given the flexibility of smart contract protocols the chama can choose to reCommon the CIC by pooling their CIC back together and pulling out the reserve. They then put this reserve into a new CIC (called locally X2 chama tokens). Again say ~$1,000 dollars is in the X2 token chama reserve and they again commit to accepting $4,000 worth of goods and services for these tokens (pegging them to the national currency). Of these 4,000 X2 tokens that are created, 50% are again distributed to the contributing chama members and 50% is for this years community projects.

This combined with the typical yearly chama cycle on debt and governance rebooting creates a virtuous reCommoning cycle.


  • How are commitments and trade balance for the CIC issuers maintained? Since the system is on a public ledger the address of who has spent all their CIC but not accepted any back – is public knowledge.

  • What about the X1 tokens that are not liquidated? What happens as X1 and X2 tokens co-exist? This is similar in a way to forking code. X1 and X2 though are by definition able to connect and trade with each other. X1 has the possibility to re-absorb the reserve behind X2 just as X2 has the ability to pull the reserve out of X1. This could form into a natural balance – such as with 2 villages near each other both creating Y1 and X1.

Since any chama can make another CIC out of an existing CIC (including their own). The eco-system of these currencies is extremely potent in its potential to create a patchwork of resilent decentralized economic systems.

Note that practically in our (USSD mobile phone based – no internet needed) wallet we encourage users to have auto-convert on- such that they choose their home token – which will be the one that any incoming CIC will be (auto) converted to. Hence users can at anytime choose which CIC they wish to be holding.

This is such a rich field - I should also mention there is a HUGE variable space here on building Decentralized Autonomous Organizations (DAOs) for voting systems, commitement contracts, CIC creation, cycles etc, as well as variations to the bonding curve equations.

What do you think?

  • On the idea of having micro-economies with connected corresponding micro-currencies created in this way, and having a natural life cycle?

  • Is this truley a mutual credit among the creators? Can anyone choose to take part in it in the 1st or second or 3rd cycles?

  • Is this a good, efficent, equitable, practial way to connect community currencies?

  • What other reserves or baskets of reserves could communites hold for their CICs?

These are a few of the many questions we are trying to find out together. Join us.

Contact us: info(@)

Or visit us on Telegram:

240 views1 comment

Recent Posts

See All