Local Exchange Trading System
#LETS
frozen glen
old notchBOT
What is it? Let's?
A Local Exchange Trading System On Top Of Ergo - a local mutual credit association which members are allowed to create common credit money individually, with all the deals in the system written into a common ledger. To the best of our knowledge, this is the first implementation of such kind of community currency on top of a blockchain.
https://github.com/ergoplatform/ergo/wiki/A-Local-Exchange-Trading-System-On-Top-Of-Ergo
Linton seems bitter that his idea is most of the time implemented with some form of governance.
What would the stance of LETS on Ergo be for defining the rules of the system? I see a comission mentioned in that github article.
Of course, after the framework is there, people can redefine it with their own views. However, the first design will set the course. Has there been discussion on which flavor of LETS it should be? And who would potentially be the first people to use it?
Linton seems bitter that his idea is most of the time implemented with some form of governance.
What would the stance of LETS on Ergo be for defining the rules of the system? I see a comission mentioned in that github article.
Of course, after the framework is there, people can redefine it with their own views. However, the first design will set the course. Has there been discussion on which flavor of LETS it should be? And who would potentially be the first people to use it?
The biggest question I guess is about credit limits. If we allow for collateralized debts only, then we will have global trading system. However, usually the main point of a LETS is about creating money (recognized in the community) when needed (via creating I-Owe-Community notes within certain limits). So may be the proper design would be global collateralized circle + local committee based ones, with possible gateways?
I need to study way more implementations of LETS to understand what might work best. Blockchain helps with the bookkeeping and codifying the rules, but I think many lessons can be learned from the earlier implementations.
Intuitively, I would see collateral, credit limits, governance and other rules, as substitutes to trust. If LETS is implemented in a small circle of friends, then none of those are needed. When the group expands, you might not know and trust the newcomers, amd therefore you need more rules.
Then the question is, should we aim for large group with well thought rules, or many independent small ones, where the trust in the community is emphasized. The latter is closer to Linton's vision I believe.
On a side note, I though about an upper limit, above which the holdings are burned. This would be a no-whale LETS zone. Could attract people who are frustrated about elite amassing wealth.
Here’s one for you https://www.opb.org/news/article/tenino-washington-economic-crisis-coronavirus-pandemic-wooden-money/
How are the tx fee's paid? Wouldn't it eat into the collateral fairly quickly?
‘The answer is an app - if there is a genius app developer out there. I have the templates, the model, the principles, the operating methods’ @obsidian mango
Hello @frozen glen! We are currently designing a scalable mutual credit system. Here are a few blockers I have noticed with LETS, Ripplepay and other implementations.
1. Scale - our circle of trust is quite small. As the community grows, we can expect the trust to be diluted.
2. Complexity - adjusting credit limits and assessing if a currency is good adds too much work for users.
3. Interoperability - how do we use this system along with external money?
4. Counterparty credit risk - similar to scale, maybe I wouldn’t trust my friends to be good for giving back 100k on time.
As proxies of trust we can use collateral. However we can also use external stablecoins as collateral and as method of converting between communities. In a way this would be fractional reserve banking with the debt being circulated locally and the collateral circulated across communities.
im very excited that the ergo team is interested in mutual credit currency and would love to work together!
- That's why I picked the dandelion. Nodes should beak off and form their own lets once reaching a certain size.
- Not sure what you mean. I think the ideas are to pick the parameters at the start.
- You wouldn't really in a traditional lets as far as I understand. It's about exchanging goods and services for other goods and services. The local currency just falicilates the exchange.
- The lack of external value eliminates this risk in LETS
These issues are solvable, but not sure the result could be called a LETS. (Maybe a GETS)
Collateral as you said would solve most, dynamic fees and trust ratings are another.
Might be better in the bridged #🏛│agora chat as there's people in the other chats better at the financial side than me :)
@gleaming osprey <@&840313336926437470>
Regarding your points:
- My major concern is seamless transaction across LETS groups.
- The majority of these LETS systems need to impose credit limits to avoid people printing too much debt. Usually this done on the fly as people change.
- you're right that it is a means of exchange however the external factors are taxes and people seeking a store of value as well. Separating currencies and store of values is a good thing in my opinion.
- I see what you're saying, but I think it is reasonable to assume trust is finite and its plausible to credit defaults
I will reach out in the other channel as well :D. Thank you!'
PM me I would love to explore the framework you are working on.
PM sent!
I support this but am not technically inclined enough to do anything
Would be happy to discuss LETS implementation issues with you
From my convo with Armeanio, the most pressing issue is manageable tx fees right? I've been investigating something called Holochain which is an excellent fit for local transactions (without fees). In terms of working with exogenous groups I am trying to figure how to interface with blockchains as a 'global data layer'
I've written a whitepaper on my proposed solution here https://docs.google.com/document/d/1qCoQ5Z5KQKQ0ZnQTGfMJNU8_8MUeM20jz0q6VF70HMg/edit?usp=sharing
What do you think?
For eliminating fees, I guess, exchange can happen on L2.
Whitepaper looks good.
I imagine we can think of 2 kinds of communities:
- local, based on trusted committee and so no collateral needed
- global, with stablecoin or ERG collateral required
Then between different circles we have gateways (interexchanges) , and quality of liquidity in different circles would be different.
post replyKoru Whitepaper - draft
from cafebedouin
[+1] via /r/ergonauts sent 7 hours ago
It's an interesting idea. It reminds me of how Quaker Meetings are organized. In short, there are local Meetings. Local Meetings tend to be comprised of regular members that are well below the Dunbar number, and there are attenders, which are people less involved but still in the orbit of the meeting. Meetings have a consensus governance model, and I know of at least one example where an anonymous wealthy member gave the Meeting a zero interest loan to make some capital improvements in the building that the Meeting owned.
Meetings are also part of larger state, regional and national networks. Representatives are sent to these larger meetings periodically. They come back and suggest proposals. It's up to each individual meeting to decide whether to adopt a particular proposal or not.
It seems there is much that is analogous to a LETS system in the Quaker system, and it might be a useful model to refer to.
A few minor points on the paper itself.
Cantillon effect, they should define it and talk about exactly what the think it means in this context. It's one thing if you find a large deposit of gold, and the relative local inflation that causes to other commodities. It's quite another to have the medium of exchange be the source of the Cantillon effect. More explanation is needed.
Page 9, there is an incomplete paragraph: "It should be noted that the governance module provides a platform for decision making without any opinions on the decisions made. For example, the community can centralize by appointing"
Thanks for posting the draft, I will fix the points cafebedouin mentioned 🙂
Exactly! more importantly, mutual credit satisfies the "medium of exchange" of money but we still need a viable "store of value" .What do you think would be the peg for the stablecoins?).
but where do you need for store of value ?
to start with
From what i've saw how individuals used the Bangla-Pesa (LETS in Kenya). They still accrued nest eggs in the form of fiat currency. If we were to have mutual credit enable accruement of credit, it would lead to artificial inflation at best
similar to how ERG rent fees!
fortunately not too important for now
so ppl will want to store value accrued via mutual credit notes? Well, for that we have ERG or crypto-backed stablecoins )
Regarding stablecoins, I understand they are mainly pegged to USD. Would it be possible in the future to peg them to a non national currency such as weighted average of LETS currencies?
Another option is to build crypto-backed stablecoin pegged to gold (or a basket of commodities)
LETS challenges + solutions
count me on!
I think there could be 2 types of lets, as described in old blog posts (with contracts):
- trusted, with committee approving new members
- trustless, with ERG collaterals
(1) can be easily run off-chain mostly, with periodic LETS state commitments on chain
(2) can be global
gateways between different circles may exist, but they will be transparent to LETS protocols
We can start with any option I guess. Would be good to find or form a community for experimentation
I don't know what I can contribute. But I would be happy to participate. I am very eager and excited to see the development of the LETS.
The cache is here, will try and dig out the pdf
Hello folks. I would like to help get the discussion going on what we need to start the first Ergo LETS. I wrote an opening post here. Please let the serious contributors know. https://www.ergoforum.org/t/lets-discussion-summary/3492
Lets start with the technical topic. @obsidian mango , is this protocol ready for implementation? https://docs.ergoplatform.com/uses/lets/
I brought the topic of a Lets up in the DeCo meet up. I know it’s been sitting on standby for a while but I think it’s a great idea. Glad to see it being picked up and I how ever I can help contribute I am in
Glad to hear. For now the best way to contribute is to just join this discussion. Seems like not many are aware that we are kicking this off now, so please spread the word to people who are interested. @fresh arch pinging you too.
agreed. not many in the meet up were aware of the concept. I will defintely be tuning in. calling @slim kettle as well
Thank you
Hi everyone,
@high gulch @gleaming pine and I will be working on LETS as part of this semester's DeCo courses, and we're looking forward to learning from everyone already involved!
Perfect. While we wait for Kushti's response on the blockchain implementation, we could start discussing the front-end. We need to display at least the trades, balances, a list of participants and a list of offered goods and services. Would people prefer to do this on a webpage, Telegram, Discord, some existing app or something else?
I think interacting with a webpage dapp would be preferable
I brought the topic of a Lets up in the DeCo meet up. I know it’s been sitting on standby for a while but I think it’s a great idea. Glad to see it being picked up and I how ever I can help contribute I am in
I think interacting with a webpage dapp would be preferable
Second
I’m also in the Deco course so I won’t have time to building anything right now on top of my current work load but give me ~8 weeks and I’ll be able to give much more
Next topic. What kind of currency would you prefer to use? The examples that I have seen are time or money.
Exchanging time can make the price negotiations quite straightforward and equal. I teach guitar playing for one hour, and another group member does graphical design for me for one hour. Time as a currency can be well accounted for services, but it does not work so well for goods. If I buy wood, and carve the Ergo logo, then how should the money spent on materials be accounted? Due to this drawback, I would consider time as a currency only if the LETS group limits trading to services.
To use money as a currency, we will need a mental peg. This will help with the price negotiations. The usual choice is to think of the LETS credits as units of the national currency. Using USD for example, would give everyone a quick intuition about the amount they should charge/pay for a trade. The mental peg could be anything else too, like ERG, BTC or an ounce of gold.
It could also be pegged to nothing. Part of being in a LETS is to let prices find their true levels in relation to each other. The global market prices are distorted by so many market forces (taxes, regulation, speculation, monopolies…), that they don’t actually represent the value that the goods and services give to people. Maybe it would be better to drop the mental baggage of how much things should be worth, and instead discover how much value the goods and services actually bring to people in the LETS. The drawback is of course making the price negotiations quite confusing at start.
front-end
Interestingly, this bot has an 'Economy' feature
The largest community is 50k strong and I'm not sure what's going on
May be one that fits well for a prototype, could technically do it all on Discord and hook it up to the tipbot
Yeah, could be an easy option to start experimenting with.
Hiya
This stuff sounds interesting for trading systems then.
There was a video I just watched about this stuff... Made in like the 80's.. Guy using Winchester disks :-p How has this stuff never properly caught on?
Same here...
Welcome. I would suggest reading the forum post and checking out the materials mentioned there. Here Glasgow has made threads about questions that need to be decided before we can set up the first LETS group. If you have any feedback, questions or preferences regarding those, then feel free to add to the threads. I will post new questions/threads soon. I am hoping for more participants to show up from the Ergohack.
My guess is because the older LETS experiments (that I am aware of) were trying to be as self sustaining as possible. That means a huge change of lifestyle coming from the outside. Difficult to make the leap especially if it means leaving behind old roots that one cares about. Not many are willing to do that. What I have in mind for online Ergo based LETS is a smaller hurdle. One could for example join this first group just to trade one good. That is easy to join. If the economic interaction via the LETS group is nice, then one could just increase the amount of interaction in one or more LETS groups gradually. All the way to that self-sustaining one, if one is so inclined. In a sense, everyone gets to choose the level of involvement that they are comfortable with.
I was thinking maybe the big dogs got wind of it and put a stop to people cutting them out the loop.. 🙂 I guess this approach is nothing new, it kind of seems like it was in medieval times and before; how trade used to be done.
I was thinking of an ebay alternative with the massive fees.. However you have the problems of trust on the payment (maybe escrow contract) and the trust of sending and receiving goods/damage in transit etc
Hey, with whom can i get in touch with the team behind lets for proposals?
it seems to just be an open on going discussion right now
feel free to drop any proposals here
https://www.ergoforum.org/t/lets-discussion-summary/3492 heres also a forum for it
Sorry for not paying attention to this thread for a while. I recommend to do trustless lets, as committee would require for distributed signatures, which are supported now btw
There is also EIP draft on lets contracts
How is it going?
Hey Team,
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aneta btc needs a loan
could we finance this for them?
LETS use a local currency sir. No value outside the LETS.
#duckpools #sigmafi
