7.8 Cross-network liquidity pools for interoperability

As the ReSource ecosystem grows, we begin to imagine a landscape where there exists hundreds of small to medium sized networks all over the world transacting and trading between each other. Networks can connect to other networks and open a line of trade between their respective members allowing liquidity to leave the network and be deposited into another, continuing the cycle of internetwork trade. As the overarching network grows, each time a new network is created and absorbed by the others, members of the network are given more options on where to buy and sell. Like the internet paved the way for the remote work, ReSource Finance looks to pave the way for an alternative method of business to business trade.

A common issue in mutual credit networks is that businesses are forced to compete with outside traditional markets that are subsidized, enjoy political privilege, or are not required to play by the same rules. Therefore, ReSource must provide a means of interoperability between networks (e.g., the rEUR or RSD network). The goal is to allow liquidity and to open commerce throughout the ecosystem of networks and internetwork marketplaces.

Market to market trades within the same network are no different than two businesses interacting in a single market. Network to network trades, as the networks have deployed their own CIP36, require a bit more infrastructure.

In order to enable cross-network commerce each network, A & B, must have a bilateral trade account with the other, just as two nation-states have a trade balance with each other. Goods and services moving from Network A into Network B would result in a deficit of Network B to Network A.

Credit limits between networks would be determined by underlying SOURCE staked by either network operators, or "insurers/underwriters" (private SOURCE holders underwriting a network operator).

A given trade/credit network would have the option to be open or closed to trade with other networks, similar to when a nation closes its border to trade. Only a "double-opt in" between two networks would enable the opening of bilateral trade accounts.

All trade accounts are denominated in RSD as the standard, forcing us to consult an oracle for accurate exchange rates between each network's internal currency.

Allowing for cross network trade allows multiple, individual marketplaces and networks to create an ecosystem where a user in one network can leverage capital earned in other networks that fall under the ReSource Protocol. This incentivizes future network operators to deploy and grow their own network and attract other networks to theirs. Subsequently, it incentivizes members in each network to add value and transact in order to offer their services outside of their own network. Traditionally mutual credit networks are closed to outside commerce as their internal currency is of little or no value to others. Once a network matures and is open to cross-network commerce, insurers/underwriters or network operators can stake SOURCE and provide liquidity to allow for cross-network commerce.

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