Circles 2.0, zoomed out

Circles general
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Hey, everyone!

I’m not an active participant in Circles or Gnosis communities, but have been following them both pretty closely for some reason. This post aims to provide useful insights for anyone interested in the ideas underlying the Circles protocol and hopefully will start a fruitful discussion. But first, Martin - thank you for all the public discussions that took place during DevConflict, Devcon, Pragma, and other venues during DevCon week!

Moving to Circles. In recent months, I’ve spent some time researching different topics related to digital trust and existing approaches to it. No wonder Circles (CirclesUBI, AboutCircles, Circles Entropy) were in the scope. I’d say I understand the context that determined the essence of what has been represented as Circles 2.0 recently, namely:

  1. concepts of time-based currencies, community currencies, LETS, CES, and Sardex
  2. bunch of ideas about computational trust (just to name a few: one… link-limit for new users is in place, so only one)
  3. trust modeling and management techniques in wireless networks, along with the broader concept of trust networks
  4. the concept of credit networks, including early attempts to implement it from RippleNet and the general notion of “money as an IOU”
  5. lessons from failed projects (Trustlines Network, Union Finance) likely were learned
  6. MycoFi vibes are definitely in place, even if not stated explicitly
  7. I would say I also see the echoes of Cristopher’s Heterotopia in the idea of Circle’s groups (tho perhaps the direction here is reversed)

I truly enjoyed the time spent diving into the rabbit hole of “trust-based money” ideas. The only problem with them is that, well, they work only on paper, but not in real life (at least not in large time/dimension scales). It feels like every time someone wanna create trust-based money, some ingredient is missing - there’s always a feeling that these concepts would work in a slightly different world (perhaps in a world with better humans, idk), but not in a world we live in. So I guess my questions (which are posted here not to get answers, but rather to start a discussion) are:

  • how is Circles 2.0 better than early Ripple, Trustlines Network, or other “money_as_an_IOU” projects/ideas?
  • essentially, Circles is a system for assigning numerical values to accounts (in the form of CRC tokens) - why do we believe these numbers will be perceived as valuable? or are they supposed to be as valuable as non-CRC tokens paired with CRC in Balancer pool?
  • does anyone envision a future where Circles become more than a niche currency, used only by a handful of local farmers in Germany?

Btw it’s also interesting to hear how Circles and GnosisPay will work together - do we speak about spending group’s currency (= non-CRC collaterals from group’s/individuals’ Balancer pools) through GnosisPay card? If yes, does it mean that providing non-CRC collateral in Balancer pool and joining the group effectively means providing free money (or we may call it UBI) to other group participants?

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Welcome to the forum and thanks for your thoughtful post. I also don’t have all the answers but we are determined to give it a larger try again.

Anyone who provides non-CRC collateral it essentially sharing that liquidity with people they trust. If you bring up that liquidity and then you trust me, I have the ability to exchange my CRC for your and use yours to access your liquidity.

Our goal here is to find the right balance between
a) not making Circles hyper financial (e.g. I only trust you if you put at least $x behind your CRC)
b) protecting the economic interest of those that trust others even if others don’t contribute liquidity

The first approach to b) is to nudge the user that is using the liquidity of their own connections. Something along the lines:
Martin, do you really want to sell your Circles, you will use the resources of your friends. “don’t sell”, “provide my own liquidity”, “sell anyway”.

So in the first step we would add small social pressure on those “taking the free money”. In a second step we could allow more restrictive trust connections. If I keep selling my CRC using your liquidity you could restrict the trust connection in such a way that you limit the amount of Martin CRC you are willing to hold.

  • does anyone envision a future where Circles become more than a niche currency, used only by a handful of local farmers in Germany?

Absolutely, I think making Circles tradable will make it quickly expand. In previous Circles iterations we have suggested relatively high value for CRC. This lead to a situation where the supply of CRC was always much larger than the demand for CRC/ the products actually offered for CRC. By now letting CRC have free price discovery I am optimistic that: either a price is found that already means a meaningful amount of free $$ (this will lead to a rapid expansion of CRC) or CRC will have a very low price (meaning the CRC you get per month are worth very little) then we at least have a speculative element where someone can just buy a lot of CRC very cheap and has a realistic chance to multiply their investment.

Both cases have a path towards CRC becoming a serious alternative to existing money.

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