Community Inclusion Currencies (CICs) enable people, regions and diverse actors to develop stable trade networks and link them to valuable security backing. Community Inclusion Currencies are game changing. When community groups are given the ability to safely create their own credit with simple to use yet cutting edge open source technology something amazing is possible.
.- Will Ruddick
The differential value of CICs regarding other community currencies is its capability to enable liquidity in both internal (community currency) and connect to external (national currency) economies, so local productivity can be boosted while guaranteing users are not trapped in the ecosystem.
CICs enable people to create their own currencies, empowering them to cover their needs and thrive, while sharing their individual and collective wealth. While the minting itself is automated and collateralized by an automated bonding curve smart-contract, the process for distributing the CICs minted in the initial phase (aka the hatch phase) should guarantee fairness and inclusivity through decentralization. This hatch phase and subsequent DAO controled distribution of CICs is envisioned as collective participatory budgetting process.
:bulb: An Aragon sponsored Hack for Freedom:
Hack for Freedom is a virtual hackathon celebrating developers creating tools for grassroots collaboration. Global social unrest is a cry for help, and Web3 tools, specifically DAOs, could be extremely helpful.
Thanks to Aragon Connect, developers can now embed DAO functionality into their apps in just a few lines of code. This gives developers unprecedented power to create tools for social change.
An Aragon DAO for CICs distribution
During the hatch phase, people adding reserve to a collateral can potentially gain a tremendous advantage compared to people interacting with the bounding courve in the continuous funding phase (once the target reserve radio is reached). So far, the Red Cross has acted as a hatch donor in the Sarafu model placing community incentives for the distribution of the generated CICs. New communities willing to adopt this solution will need the economic decentralized decision making process so that the distribution of these first minted CICs shall be decided in a fair and decentralized fashion. The goal is to develop an Aragon DAO to facilitate this hatch -> distribution process.
We are starting this project by scoping only the distribution of CICs generated in the hatch phase, ergo, the phase in wich the reserve will go from zero to the Target Reserve Ratio in which the price of 1 CIC equals 1 unit of Reserve (Genreally we are usign a stable coin as the reserve).
We assume that once the hatch phase is reached, and the CICs have been distributed the usage of those CICs is up to the issuer will.
Future use of this DAO will still need to be discovered.
In order to start giving a shape to what the DAO might be looking, here an intitial proposal for a the CIC DAO protocol. To be discussed and evolved by the hackthon team.
We can assume a remarkable lack of liquidity and financial equality in the community targeted to start a bonding curve communi currency policy.
But also, a community with significant productive potential, which means that good and services (or the promiss of such) might be also placed in community funds in exchange for new minted CIC. The current process works through a manual and offchain social backing contract which is described in this document. Now, our aim is to build up an onchain/onDAO application.
The following UPs are agents interacting with the CICs and CIC DAO.
- Council Agents: (aka Chiefs and Elders in Sarafu model) reputated and trustwhorthy individuals of the community that might act as community validators for social processes such as the commitment (and its completions) of good and services. They are also the stewards of phisical community funds, and might have an special say/vote in the CIC DAO.
- Hatch Agents: these are the people adding off-chain commitments as well as onchain reserve the hatch phase. Adding the on-chain reserve to the bonding curve, which triggers the minting of new CICs and subsequent (based on the DAO) distribution of CICs. Normally, they would be also the recipient of all the CIC minted, but in this case, we aim to distribute the advantage of a hatch investor (having as much as 4x in CIC the amount of money they invested) fairly among the community. We can assume they are healthy individuals motivated by seing their community to thrive and can agree to community projects and other forms of distribution.
- Prosumer: basically anyone in the community willing to participate as a producer and/or a consumer within the community.
- Active Prosumer: an individual able to place in advance good and services in exchange for new minted CICs
- Passive prosumer: an individual who can't offer tangible guarantees but still has the right to apply as a recipient of new minted CICs
Draft DAO Protocol
A Governance Cycle with specific rounds shall be in place for guaranteeing a proper distribution of the new minted CICs.
- Participatory budgeting: members of the community states their intentions to obtain community currencies while committing to deliver good and/or services to the community. e.g:
| Member name | [account number/address] | Goods and or Services | Method and schedule to redeem | total commitment | Collateral | Signature |
| ----- | ----- | ----- | ----- | ----- | ----- | ----- |
| Susan Zuri | 0x65C367F9837D... | Full grown goats | 4000 CICs a month for 25 months | 100,000/= | 0 | [Signature] |
| Sally Mtu | 0x8A74FE94837A... | Mboga | 2000 CICs a month for 25 months | 50,000/= | 50,000 | [Signature] |
| Philip Bob | 0x4A74A1948123... | Chimba | 1000 CICs a month for 25 months | 25,000/= | 0 | [Signature] |
Negotiation: Council Agents will review the outcome of the participatory budgeting phase, letting pass proposals to a subsequent Distribution phase or challenging back members to better adapt their proposal according to the community values and standards represented by such a Council. Members should accept the challenge or refuse to participate in such a distribution cycle.
Hatch Phase: hatch agents will add the amount of reserve (e.g. stablecoins) to the bonding curve, this will mint the corresponding amount of tokens
they will receive back an amount in CIC pair (in units of accounts) to the Reserve they added, while the difference in CIC will be added to a DAO vault (governed by the Council AND the hatch agents) from which the Distribution phase will be triggered.
This phase can independent from the governance rounds presented in this document. We assume that having a participatory budget placed in advance can motivate the hatchers to add reserve to their community while keeping theirself an equivalent amount of money so they can spend in the locality.
Distribution: assuming a bonding curve with a Target Reserve Ratio of 25%, and that the hatchers already took 25% of the total amount of tokens, we will need to distribute then the remaining 75% of the CICs generated, addressing the following needs:
- Members submissions.
- Community Projects (not defined yet above thou)
- Airdrop to needed Community members.
- Council Incentives.
It can be interesting to explore using Aragon conviction voting app for such a distribution.
Call To ACTION
First of all, feedbacks, comments and challenges about the proposed model above will be more than Welcome!!
Second of all, the hackathon starts already next monday the 6th and it will last two weeks, so if you are a dev and have some availability to participate, please comment it here so we can start setting up the team!