3.4 Monetary Flow , Reserves and Default Insurance

For the purpose of clarity we will from now on refer to the network’s stablecoin as rUSD and focus on its specific token economics. Please be reminded that rUSD is the stablecoin arising from the ReSource Network. Other mutually credit systems built on top of the ReSource Protocol may design different stablecoins with different pegging targets and mechanisms.

While all transactions between members are settled in rUSD, transaction fees are settled in SOURCE - the protocol’s governance and utility token. These SOURCE payments serve as the basis for SOURCE staking rewards, Ambassador and Underwriter rewards, as well as the network’s Reserve pool.

While the majority of fee payments are dedicated to incentivise Underwriters, Ambassadors, and SOURCE stakers, the Reserve pool receives 20% (adjustable by governance) of all network proceeds. Additionally, the network may offer members the ability to substitute their SOURCE fee payments with rUSD fee payments, and may decree low interest rates (paid in rUSD) to incentivise the swift repayment of overdue debt. These rUSD remittances are directly transferred to the Reserve.

This SOURCE and rUSD income stream is the basis for the network’s stablecoin pegging mechanism, and its insurance against defaults.