Executive Summary

The ReSource Protocol provides a comprehensive toolbox for the creation of distributed mutual credit systems that 1) grant participants access to cost-effective credit at extremely competitive terms, 2) further collaborative commerce, and 3) give rise to "Stable Credits" - a new kind of stable currency that derives its stability and value from organic market forces.

At the heart of ReSource lies a multi-sided lending system that allows businesses to extend credit to each other in the form of goods provided and services rendered. Effectively, this means that participants in the system can access each other’s goods and services in exchange for guarantees to provide their own equally valued goods and services to other participants in the network.

This cyclical trade model is made possible through a series of DLT-based instruments. These instruments distribute underwriting processes and risk management while generating a self-regulating currency (Stable Credits) in which credit is extended, cleared, and settled. This currency arises endogenously from the system’s debt cycle: it is minted when debt is created and destroyed when it is redeemed. This ensures that the supply of currency units always matches the demand exercised on them by outstanding loans.

The capabilities of the ReSource Protocol can be adapted to various use cases. The Protocol may accommodate the needs of closed-commerce mutual trading communities as well as for-profit, permissionless open-market applications. The ReSource Network, as the first application built on the ReSource Protocol, is a blend of both. It primarily addresses global SMBs, freelancers, and startups.

In short, the ReSource Network offers participants access to an extremely cost-efficient credit line in the form of an overdraft-enabled current account. Balances on this account can then be spent to purchase goods and services offered by other participants.

This mutual credit–enabled trading network lays the groundwork for a suite of products offering mutual credit services to businesses and individuals in business-to-business and, later, business-to-consumer scenarios.

The ReSource Network utilizes an instance of the ReSource Protocol, which will eventually be governed by a DAO (decentralized autonomous organization) consisting of its asset holders and stakeholders. The ReSource Protocol allows for the creation of additional instances, which may differ from the instance described in this paper in terms of the stable credits arising from their operations, their credit policy, and their internal network dynamics.

While functioning independently in every essential way, these trading networks have means of interacting with each other in ways that maximize mutual benefit while preventing the overspill of risk from one network to another.