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ReSource Whitepaper
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ReSource Whitepaper
00 Glossary
01 Executive Summary
02 Mutual Credit
2.1 Definitions and Rationale
2.2 History
2.2.1 WIR Bank
2.2.2 Modern Multilateral Barter Networks
2.3 Mutual Credit on the Blockchain
2.4 The Basic Economic Questions for DLT-based Mutual Credit Systems
03 The ReSource Protocol
3.1 Introduction
3.1.1 Distributed debt collection and obligation enforcement
3.1.2 Distributed risk management
3.2 Underwriting and risk assumption
3.2.1 The Underwriting process - a breakdown
3.3 Ambassadors and network administration
3.4 Monetary Flow , Reserves and Default Insurance
3.4.1 Default Insurance
3.4.2 SOURCE Reserve and stable coin pegging mechanism
3.4.3 rUSD on the Open Market
3.4.4 SOURCE Token Dynamics
04 Protocol and Network Governance
04 Protocol and Network Governance
4.1 Reputation
4.2 SOURCE Governance Token
4.3 Initial SOURCE Allocation and Distribution
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3.3 Ambassadors and network administration
Since mutual credit networks are built around the principle of debt repayment in-kind, they carry additional risks that are absent from traditional lending scenarios. While a traditional creditor anticipates debtors’ ability to repay debt in the same form they have received credit in (fiat currency, in most cases), the administrator of a mutual credit network also needs to trust that goods provided and services rendered by debtors will meet effective demand within the trading network. If a member has consumed credit, but is unable to offer in return goods and services that meet the needs and wants of their peers, they consequently run the risk of default, even if their financial position is healthy on paper.
As shown above and elaborated on further below, the ReSource protocol provides remedies for cases in which members are unable or not willing to repay debt in-kind. Nonetheless, these recourses are only effective if the overall health of the trading network is upheld. To guarantee such a healthy environment, the administrator of a mutual credit network will often have to engage in proactive deal-brokerage and expand the network’s membership-base intelligently, with diversity and mutually beneficial trade-relations in mind.
The ReSource protocol assigns this role to Ambassadors. Ambassadors onboard new members, provide customer success services and may proactively reach out to members in order to assist them to spend their rUSD surpluses and\or rebalance their deficits. Ambassadors perform this service in return for a cut of transaction fees, generated by members they helped to onboard, and hence are financially driven to maximize transaction volume.
In return for the privilege of collecting transaction fees, Ambassadors like Underwriters, also share a portion of the network's risk. Ambassadors do not directly stake SOURCE, but have penalties deducted from their returns in case that a member affiliated with them has defaulted.
The relationship between Underwriters and Ambassadors is a complementary one. While Underwriters assess a member’s financial risk and price their credit line accordingly as shown above, Ambassadors asses a member’s ability to contribute to the trading network in meaningful ways and assist them in maximizing the utility they gain from and contribute to the network.
03 The ReSource Protocol - Previous
3.2.1 The Underwriting process - a breakdown
Next - 03 The ReSource Protocol
3.4 Monetary Flow , Reserves and Default Insurance
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