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Author: YS Koen
Klaten, October 24, 2023
The project focuses on the problems surrounding the wealth gap and income inequality, which require more than just donating money. Permanent structural changes must be made to solve this problem. This project revolves around blockchain technology and cryptocurrency, but its success depends on the cooperation of all users and communities involved. The strong connection between the communities and the use of project applications will determine its lifespan and ultimate success.
The project’s vision is centered around individuals, not just the development of new technology. Users come first because they are the ones who suffer from the problems mentioned above. We need everyone involved in virtual and physical communities to address these issues, forming an extensive network. The network must have a vibrant economy that can scale and make it accessible to as many beneficiaries as possible.
This blog post aims to clarify the project’s true intent and show that it can benefit everyone involved. It is not an outdated model where money is shifted from the giver to the recipient. This project is necessary; it is time to tackle real problems with solid fundamentals and realistic results.
Table of Contents
Community, Network & Economy
To ensure the success of this project, all parts must function optimally, especially for its users. Building a solid community and user-friendly applications are the top priorities. Each project derives its raison d’être from the users and their activities on the platform and the accessibility of the applications. While IDIFY-CWP members will de facto participate, their current situation needs to be improved, and future needs identified to secure their involvement. Utility Token (UT) holders also play a vital role in the project as they provide funding to make it happen. Therefore, we must develop sufficient applications that increase and strengthen their long-term commitment to the project. The P2P payment network is an immediate solution to bind the communities, but more is needed for long-term adoption. We need outside parties to adopt more activities on the platform.
The project’s development stemmed from identifying the wealth gap and income inequality as problems that require structural solutions. While many initiatives have been proposed and tested over the years to address these problems, none have performed satisfactorily, and someone has yet to develop the solutions these problems deserve. This project will provide a viable solution but cannot be financed through Robbing-Peter-to-pay-Paul transactions and moving around tax revenues. The initiators require everyone to benefit from the project, and a healthy economy is the binding agent between all users and their communities. However, the project starts with no existing economy.
Let’s start on a happy note; in projects like this, people must be careful not to use big words. As many before us have already done, we can shout from the rooftops that we will take on the poverty problem and kick it off this planet. However, the result is that anyone with a calculator can check that this is nonsense. At the end of 2022, the World Bank once again updated the numbers: 648 million people live below the extreme poverty line, which is set at US$2.15 per day in income; 23% of the total world population has an income lower than the US$3.65 a day, or 1.85 billion people. That US$3.65 per day or US$113.15 per month is the bottom limit of a somewhat livable income. That doesn’t say much in the West, but let’s translate that to Western purchasing power standards; for convenience, we assume that 45% of the salary is spent on food-related expenses and 55% on non-food-related matters. This is important to specify because food is relatively expensive in countries where this problem is structural. Food is, on average, two times cheaper than in the West, while other expenses are often up to four times cheaper. So, for the food-related part, we are talking about US$113.15 X 45% = US$50.92 X 2.5 = US$127.30, and for the non-food related expenses, it is US$113.13 X 55% = US$62.23 X 4 = US$248.92 makes a total of US$376.22. Ask yourself: Is this a livable income for adults in the West? There is no social security, subsidies, or other supplement to that income. 1.85 billion people have to live on less than that per month. Anyway, we can fix that problem, right? Those words are often used: 648 million people, you know what, we’ll give them a dollar a day extra, okay, the bill for this generosity will be $236.52 billion a year. Will this eliminate poverty? Oh yes, next year again. While we’re at it, we’re also adding a dollar for all those people who have to get by on just US$ 113.15 because we need to be able to sleep peacefully at night. An extra dollar for 1.85 billion people makes $730 billion a year. Who cares? It’s easy to print a few extra dollars. So, no big words here. If we want to solve the problem of poverty for humanity, much more is needed than just this project. But for those who participate with us, we promise a gigantic project where we will make a big difference for everyone involved.
Community Economic Development
The project is a complex network consisting of diverse participants and communities that span different geographical locations, much like the structures found in cities, regions, or countries. The ultimate goal is to establish a sustainable economy that benefits all users. However, to achieve this goal, it is imperative that we refrain from competing with any government or country for the benefit of our users. Each participant in the project has a physical presence within a specific community that is part of a country and, as such, must adhere to the laws and regulations of that country.
It’s crucial to understand that more than simply copying the users’ local economy is needed. The project must have a separate economy that operates independently of existing economies to avoid spillovers from harmful practices. This is because we don’t have access to tools like tax and excise duties that are exclusive to specific countries and regions where our members have a physical presence. Moreover, our members must pay taxes on the income generated through this project in their respective countries. The fact that the project must refrain from constantly printing extra money has advantages in building a new economic system.
Building a sustainable economy requires a great deal of creativity and imagination. We must rely on our users and their activities to develop our applications accordingly. Our users are integral to the project, and the communities must form a strong unity. Pre-existing communities are participating in the project through their IDIFY-CWP membership. These communities have a geographic footprint and are considered non-spontaneous in community development. That being said, these communities are expected to establish a robust foundation for the project.
Newly formed communities will arise spontaneously through the joint activities of members. These communities will have a more voluntary nature and a changing membership base. The members’ activities within these communities will be more internally oriented and have a single focused objective. Yet, these communities are as vital to the project as they build bridges between all communities, enabling them to function as one robust network.
It is worth noting that users can participate in multiple communities simultaneously, and this collaboration is crucial for the entire project’s success. The various activities and interactions between these communities will promote internal economic traffic for the project. In conclusion, the success of a sustainable economy rests on the collaboration and unity of all participants and communities involved, and together we can achieve this goal.
Shaping an Economy: The Basics
When shaping an economy, it’s crucial to analyze the available elements, including a token model consisting of Utility-Tokens (UT) and Community-Tokens (CT), the IDIFY Community Welfare Program, the Business Development Fund (BDF), and infrastructure such as blockchain, dApp’s, a financial service company, and a proprietary generative AI model with a Large Language Model. Communities also play a crucial role in developing a community economy.
To build a strong foundation for a flourishing community economy, it’s important to understand the two essential parts of a community economy: Micro-Economy and Macro-Economy. Microeconomics examines the behavior of consumers, supply and demand in individual markets, and firms’ hiring and wage-setting practices. Macroeconomics has a broader focus, studying the impact of fiscal policies, significant causes of unemployment or inflation, and how government actions affect nationwide economic growth.
Have you ever thought about the importance of money in our society? Let’s consider what would happen if we didn’t have it. Without money, we would have to rely on a barter system, where goods and services are exchanged for other goods and services. This could be very challenging because you would need to find someone who has what you need and wants what you have. For example, a car mechanic who needs food must find a farmer with a broken car to fix. But what if the farmer had no vehicle to repair or could only offer the mechanic more eggs than he could use? This system would make it difficult for people to specialize in their skills, leading to a shortage of goods and services and possibly hunger.
Thankfully, with money, we don’t have to worry about finding someone with a specific item to trade. Instead, we can sell our goods or services in a market and receive money in exchange. This money can then be used to purchase whatever we need from others who also accept the same medium of exchange. This system allows people to specialize in their skills and produce more, which leads to greater demand for transactions and, consequently, a greater need for money. Money makes it easier for people to conduct business and enjoy the benefits of a modern economy.
The money supply is another critical factor that influences an economy’s development. The money supply refers to the total amount of liquid assets, including currency and bank deposits, within a country’s economy at a specific date. Central banks, treasuries, and other government institutions are responsible for issuing paper money and coins, and banking regulators can adjust the money supply to stabilize the economy.
Regarding this project, macroeconomics, microeconomics, and money supply play essential roles in shaping it. The project economy starts on a different footing than we all know from the fiat money system. However, the project has the potential to evolve into a similarly sizable model once users start evaluating and trading with the tokens themselves. It is crucial to convince users that the tokens have value.
Please note that this information relates to the Utility Token (UT). UT’s maximum supply is 1.5 billion, but not all tokens will immediately come to the market. Half (50% – 750 million) of the tokens will not be traded. These tokens are available in the Community Token Treasury as collateral for issuing Community Tokens (CT). Another more than 15% (225 million tokens) is reserved to ensure sufficient liquidity when exchanging from CT to UT. 7.5% (112,500,000 tokens) will be sold to the public through three funding rounds. The remaining tokens (412.5 million tokens) will be allocated to different project departments, and each department can only use a maximum of 5% per year of their total allocation to fund their goals, starting after the three rounds of funding. This means that when one hundred percent of the tokens are publicly available, an equal amount of tokens are held as collateral, which ensures stability in the economy. Fifty percent of the maximum supply will be available at the token launch; all departments receive their total allocation. That’s 412.5 million tokens, with the remaining 112.5 million (7.5%) available for the three funding rounds and the final 225 million (15%) going to the Project Treasury. The remaining 750 million tokens will be minted once tokens are publicly sold by either department at a 1:1 ratio. The tokens that are minted go entirely to the Project Treasury. Another option for minting new tokens is when CT will be issued; UT is minted at a ratio of xx-CT / value UT X 1.33. (see the photo)
1 new member — 120,000 CT
1 CT = Rp 1,000 1 UT = Rp 10,000
Rp 120,000,000 / Rp 10,000 = 12,000 UT * 1.33 = 15,960 (new UT sent to the project treasury.)
New tokens will be minted up to 750 million tokens. Then, the maximum supply of 1.5 billion tokens has been reached, and no new UT will be added. This does not mean that the issuance of new CT will stop, but it can continue because the value of the UT will also increase if the resources are appropriately spent. This way, all publicly available UT will be covered by at least an equal number in the project fund. It remains crucial that no unnecessary amount of CT is put into circulation.
These tokens are valuable resources for the economic development of communities, benefiting all users. The first 112.5 million tokens will be sold in three phases to fund the project’s start. Half of the proceeds will go to the CWP’s new member program, marking the beginning of the project’s economy. This will enable capital to circulate and be recorded on the blockchain, creating a financial history that validates and appreciates the project and its users.
Financing each new member on a one-to-one basis is not sustainable for the future growth of the project and the scaling of IDIFY-CWP members. We need another mechanism to achieve economies of scale to create a vibrant user ecosystem. Therefore, we must introduce a system that balances the financial value brought into the chain with the existing value of the economic activities on-chain. But how can we maintain balance without one suffering from the other? Concessions will have to be made, and equilibrium cannot be achieved from the beginning of the project because the project’s economics start with an out-of-balance situation. The imbalance exists because the project and its economy are starting from scratch. The project does not begin by tapping into an existing economy but builds it from the ground up.
The Community Token (CT) is being introduced into the system to enable future member growth and scaling. These tokens exist exclusively on-chain and in digital form and may not contain any value outside the periphery of the project. CT replaces the cash injection situation for new members from the day of introduction. Again, by providing cash to the initial members, the project can temporarily start building a member/user base for the blockchain network even before it has a public existence. The CT thus becomes the fuel for the engine that gets the user economy going.
Each country or region where IDIFY-CWP communities have a presence is assigned its unique CT, with the price value of the CT reflecting the price value of the fiat currency that members use daily. This ensures faster acceptance of the CT as a means of payment, medium of exchange, and unit of account. The CT model is introduced to provide new members with a fair system. If only the UT is implemented, there will be an imbalance in the number of tokens members receive from the start of their participation because the UT price value fluctuates. It will drastically accelerate the circulating supply and deflate UT’s holdings if only one token system is used, negatively impacting its price value with all its consequences.
The CT is not directly exchangeable for fiat currency or other digital coins and tokens. It can only be used for payments between members or exchanged for other CTs and the UT. The UT serves as the calculatable reserve currency with which cross-border payments are made over the network, where the token can communicate and trade with other token systems outside its network. The CT is only of value within the network and won’t be tradeable on exchange platforms outside the project and its blockchain.
Within the project platform, the CT has its value as money; outside this environment, it is nothing more than a coupon that has no value whatsoever. No exchange value, means of payment, or store of value is attached to it for using the CT outside the project infrastructure. As soon as members start using the CT, it will be of value within the project as a means of payment for transactions within the communities and its members or as a means of exchange against the UT. The value of the CT represents the value of the fiat currency used within the physical community, and the UT has its proprietary value. The use of the CT is primarily motivated by the fact that they have little or no choice but to accept the CT. They will buy UT with the CT they own, which they can exchange into physical fiat currency to purchase goods, pay off debts, or for other uses in the real world. They do not pay interest or additional fees for participating in the CWP. However, when they withdraw CT for personal use, they must make a monthly installment payment to their credit reserve under pillar one. This can be considered a form of tax, although they can use the CT again once the monthly transaction has been processed on-chain. It guarantees the circulation of tokens across the network of both the UT and the CT, which is precisely what a start-up economy needs.
The project is, therefore, a network of communities whose members will, in turn, form the driving force behind the economy. For this purpose, they are provided with a multiple-token model supported by the blockchain network and the various applications. Putting the tokens into circulation does not constitute an economy. It is the interaction between the different agents that shapes the economy. What are economic agents? Economic agents intervene in the economy according to specific rules determined by the economic system and its institutions. They make decisions to solve an optimization or choice problem. In this process, they shape the economy. For example, they decide on the distribution of goods and services, taxes, laws, tariffs, etc. Another definition of economic agents, also known as economic actors, considers them as decision-makers who can recognize different economic factors, incentives, and motivations of the various economic groups.
Then the next question will have to be: who are these agents? In the light of this project and its members, households are the first and most essential agents. Households consume, work, and save. They consume to meet their needs, save money for greater future consumption, borrow to promote consumption and work (sacrificing leisure) to consume. Their income is divided into consumption, savings, and taxes. They have a dual role in the economy. On the one hand, they are consumers; they demand goods and services, and on the other hand, they own the means of production through which the goods and services are produced.
The next economic agent is corporations. Companies try to maximize their utility (economic benefits) for their shareholders. To achieve this, companies use factors of production (land, labor, and capital) to produce goods and services, creating value and wealth. They demand labor from families for a salary and also employ capital (machines, vehicles, computers, etc.) in exchange for interest and land for rent. Finally, they offer goods and services to families, other businesses, or the government.
Traditionally, the government is also an economic agent. Governments provide most rules for how the rest of the economic agents should interact. They provide goods and services (mainly public goods and services such as roads or national security) through national companies or in association with private companies. Governments demand goods from corporations and labor from families. But they also tax them based on their income, profits, wealth, etc. They can regulate prices, limit or prohibit the consumption of certain goods, create tariffs on imports, incentivize production, etc. Finally, they distribute the wealth through social services in education, health, and poverty programs.
Then, of course, the Central Bank is also an economic agent. Central banks manage the country’s currency, money supply, and interest rates. Through monetary policy, they can increase the money supply in the economy or modify interest rates to incentivize or disincentivize consumption, savings, or investments.
The first two economic agents speak for themselves within this project. However, the roles of the last two traditional agents are fulfilled differently within the project. The various tasks these agents take on are carried out within this project by the members and project-owned organizations. Regulation and decision-making are in the members’ hands, perhaps with support from the blockchain foundation for its organization. The same foundation will facilitate a program supporting essential digital infrastructure development. The foundation can fund such work from the tokens it manages. Taxes will not be levied within this project; this is a user-based project, so it would be almost fraudulent behavior if the project were to impose tariffs on its members. Price regulation is dangerous; the initiators believe the market will determine the price. Price regulation is centrally controlled behavior, and the advice will be not to undertake such activities. But project organizations can be the referee regarding costs, such as transaction costs; what are the actual costs, and how are they divided upon payment? Production stimulation is again a role for the BDF. Distribution of wealth should be the responsibility of IDIFY-CWP and the issuance of the CT.
The agent’s tasks of the central bank still need to be discussed in more detail; these are complicated issues. The project does not have an institution like a central bank; the project treasury will be responsible for token management. The token supply is already determined at the start of the project, and no changes can be made to the Maximum Supply. Interest rates: the initiators do not favor making this an interest-based economy. This is a user project, and if the user is burdened with interest payments, that is the same as exploiting your most crucial resource for the benefit of whom? There are other forms, for example, passing on the actual costs to its users or profit and loss sharing. For monetary policy, there is a proposal to introduce a monetary commission. This is not a policy-making body, only an advisory body, but will be necessary if a healthy economy is to be built.
A multiple-token model will form the basis for the necessary community economy, with the Utility Token and the Community Token available, using a decentralized blockchain network and all project departments and economic agents. All ingredients are present to shape the project successfully. The capital injection from the token sale allows the project and its economy to be started. The implementation of the CT will provide a stronger foundation. This allows us to work towards an increase in scale. But making the project dependent on token sales alone is a very unwise decision. A situation may arise in which one group of users, the buyers of the Utility Tokens, establishes a debt position over the other user group, the IDIFY-CWP members. Then, the project falls into old habits known within the fiat-currency-dominated capitalist system, debt-formed false prosperity. The result of this will be dissatisfaction on both sides. One party can hardly collect its debts; the other must be forced to pay. The result will be that both parties will not experience satisfaction from participating in the project.
Participation in this project should create a situation where both camps come closer together and consider everyone’s participation valuable. This can be achieved by increasing economic activities within communities and among themselves. The next part will discuss this topic.
Shaping an economy: Strengthening the fundamentals.
The previous section mainly covered token offerings and their significance in the project’s internal economy. This forms the basis for starting the internal economy and expanding the project. However, more than focusing solely on token creation is needed to ensure the project’s existence. External economic tensions can strongly influence the project, which we want to avoid. Therefore, we must build a broader foundation to navigate the project through all cyclical phases of the global economy and protect its members.
Protecting the members, but what does that protection entail? To answer that, assumptions must be made about how the project can grow. The first goal is 100,000 members, but the problem being tried to tackle is locally so big that there is no need to look beyond borders. However, this will change if the project wants to demonstrate that this is a viable solution for enhancing financial inclusion. If the project grows to 4 million or more members, it will have a physical footprint reaching all continents. Regarding providing protection, this concerns threats that can be local but can also cover continents or even worldwide. This is not directly about a physical threat; all communities and all members are also part of physical communities, and governments of those physical communities remain responsible for protecting against those physical threats. The strength of this project will lie in that together, the member communities and the project offer protection against economic and financial threats. Being able to cope in a time of economic and financial crisis, with its consequences, such as high inflation, but also providing financial security in the event of natural disasters and political threats is precisely what members should be able to rely on when they participate in the project, the network of communities and a robust economy.
Just as countries have armies for defense, this project has the Business Development Fund (BDF) as a layer of protection. Although the BDF does not have weapons and ammunition, it ensures communities become more resilient to economic downturns, inflation, deflation, and recessions. We must establish a financial protective barrier to ensure the project’s success. In the most commonly used economic theories, labor participation is high on the list as an essential indicator for determining the situation of an economy. Labor participation rates are a crucial factor in measuring the state of the economy and its growth. The more people have paid jobs and receive sufficient salaries, the healthier an economy will be. The project values labor participation because it generates disposable income and contributes to a robust economy. The project does not influence the nature of its members’ work and labor intensity and whether they use the available time efficiently. Instead of labor participation, the project prefers to use disposable income as an indicator. The second and third pillars of the IDIFY-CWP program ensure this by providing passive income opportunities for its members. Better employment and education/training for members will further contribute to an increased and stable income. Initiatives will be further developed through close cooperation between IDIFY-CWP and the BDF in all these areas. It is up to the BDF to ensure that the other members are also involved. It will enhance the satisfaction of participating in this project and maintain long-term involvement.
The BDF has many functions, including making strategic investments in businesses. One example is supporting local businesses in areas where IDIFY-CWP operates. The BDF will ensure it doesn’t compete with existing businesses but contributes to the local community’s growth. For instance, it may invest in refrigeration, freezing, and distribution facilities in areas with high agricultural activities. These facilities can be run commercially, providing consumers with better products or extending the post-harvest sales period for farmers. This way, farmers aren’t dependent on traders who buy their harvest in one go and can look for better buyers without pressure from limited shelf life.
The BDF can also collaborate with existing or new entrepreneurs to produce products. The most significant contribution of the BDF is opening product labs to research and develop new products in four sectors: Food & Beverage, Textiles & Clothing, Health- & Skin Care, and Fruits & Vegetables. As products are designed, a joint marketing department collects product information and user data to research and develop sales and marketing strategies. Manufacturers can then produce and sell the product for a license fee or royalty. These new producers are recruited within the project network. If no producer is found, production can be operated independently as a business unit with pillar three financing.
It is essential to clarify that user data is processed anonymously and that personal data will never be used for commercial purposes. Users themselves will need to permit their data to be processed for product development analysis. Members of IDIFY-CWP participate for free and never have to pay any form of the membership fee for their participation. To this end, the project expects that they will allow this data to be collected. It would be a significant loss to the project’s success if we cannot collect and use the user data for the project. However, the data is anonymized and never shared with external parties. We want to convince members that processing data correctly improves products and ultimately benefits them.
Profits generated by the BDF’s activities will be reinvested exclusively in the project, which will own shares in the companies through a holding structure. Each work unit will have a management structure with a general and supervisory board that reports separately to the project foundation and all UT token holders. An advisory body will be implemented per sector to provide independent advice to the management of the companies, the BDF, and the foundation. Recruitment for all positions will initially be offered to UT token holders, with advisory bodies and the board nominating candidates to vote on if no suitable candidate is found among the token holders. The voting is exclusive to UT token holders.
Employee salaries will only be paid in CT, and no UT or cash amounts in any fiat currency may be used to pay employees wages or bonuses. Cash and UT are crucial for operational activities, and the P2P payment network must be designed to provide sufficient options for employees to use CT. This ensures that the system is suitable for employees and users alike.
The BDF’s first activity will be to recruit a financial services provider that can act as an On-Off Ramp, offering services exclusively to project members and serving only UT and CT, not other external digital currency holders. This investment is considered an investment in strategic infrastructure, supporting the P2P payment network and accelerating project adoption. The IDIFY-CWP program will function even better, benefiting ease of use and guaranteeing unlimited growth. This investment offers endless possibilities for further development of the internal economy, no longer driven solely by the activities of the IDIFY-CWP members.
To put it differently, money holds its value over time, can be easily translated into prices, and is widely accepted. Over the years, many things have been used as money—cowry shells, barley, peppercorns, gold, and silver. At first, the value of money was anchored by its alternative uses and the fact that there were replacement costs. For example, you could eat barley or use peppercorns to flavor food. The value you place on such consumption provides a floor for the valuation. Anyone could grow more, but it does take time, so if the barley is eaten, the supply of money declines. On the other hand, many people may want strawberries and be happy to trade for them, but they make poor money because they are perishable. They are difficult to save for use next month, let alone next year, and almost impossible to use in trade with people far away. There is also the problem of divisibility—not everything of value is easily divided, and standardizing each unit is also tricky; for example, the value of a basket of strawberries measured against different items is not easy to establish and keep constant. Not only do strawberries make bad money, most things do.
But precious metals seemed to serve all three needs: a stable unit of account, a durable store of value, and a convenient medium of exchange. They are hard to obtain. There is a finite supply of them in the world. They stand up to time well. They are easily divisible into standardized coins and retain value when made into smaller units. In short, their durability, limited supply, high replacement cost, and portability made precious metals more attractive as money than other goods. Until relatively recently, gold and silver were the prominent currency people used. Gold and silver are heavy, though, and over time, instead of carrying the actual metal around and exchanging it for goods, people found it more convenient to deposit precious metals at banks and buy and sell using a note that claimed ownership of the gold or silver deposits. Anyone who wanted to could go to the bank and get the precious metal that backs the (bank)note. Eventually, the paper claim that the precious metal was delinked from the metal. When that link was broken, fiat money was born. Fiat money is materially worthless but has value simply because a nation collectively agrees to ascribe a value to it. In short, money works because people believe that it will. As the means of exchange evolved, so did its source—from individuals in barter to some collective acceptance when money was barley or shells, to governments in more recent times.
Even though standardized coins or paper bills made it easier to determine the prices of goods and services, the amount of money in the system also played an essential role in setting prices. For example, a wheat farmer would have at least two reasons for holding money: to use it in transactions (cash in advance) and as a buffer against future needs (precautionary saving). Suppose winter is coming, and the farmer wants to add to his money store in anticipation of future expenses. If the farmer has difficulty finding people with money who want to buy wheat, he may have to accept fewer coins or bills in exchange for the grain. The result is that wheat prices go down because the money supply is too tight. One reason might be that there isn’t enough gold to mint new money. When prices as a whole go down, it is called deflation. On the other hand, if there is more money in circulation but the same level of demand for goods, the value of the money will drop. Inflation is when it takes more money to get the same amount of goods and services. Keeping the demand for and supply of money balanced can be tricky.
Shaping an economy: Further expansion of the economy
Now that the basics of the internal community economy have been explained, we must consider how it can grow and develop into a stable environment that benefits everyone. If it persists in the format discussed above, it is realistic to expect that most activities will occur off-chain. Then, it is a legitimate question why so much energy is being put into developing a P2P payment network. The vision for this project is that everyone should be able to generate benefits from participating. That can only be achieved if we keep the value on-chain as much as possible.
A solution to this must be found as much as possible within the project. If we then look at the strength of all activities, the core of it lies with the CWP program. The members throughout the program and the local entrepreneurs who obtain financing under pillar two rely exclusively on the P2P payment network to start their activities. In that case, a solution will have to be created, allowing them to perform transactions and other activities within the P2P payment network for longer. Of course, this has been thought about, and a solution has emerged. We are thinking about a model most known as the Costco model. This would be an extremely suitable solution in a modified version for several reasons.
It is important to clarify this: the project has a policy that an application not directly related to blockchain technology may only be implemented if it serves more than one purpose. This is to avoid an unnecessary amount of redundant applications. Because often, the one purpose the application serves can also be solved in another way. But in the case of the Costco model, it serves multiple purposes and is a welcoming addition.
By the Costco model, we mean a grocery wholesaler for members. At Costco, the consumer must first apply for and pay for a membership, and then he can go shopping. In the case of this project, we are not looking for a model where we can charge subscription costs, but the CT can serve as proof of membership. Because wholesale products can be sold directly to consumers and many operational costs can be drastically reduced, the products can generally be offered cheaper than in retail. This makes wholesale not only interesting for the members of the project, who have access to the CT through their participation, but also for consumers from outside. These consumers use fiat currency to purchase UT and exchange it for CT, as CT will be the only means of payment in the facility.
In addition, the wholesaler can serve as a sales market for many local entrepreneurs who obtain financing through pillar two. The wholesaler can be a direct buyer of the products of these entrepreneurs, or they can be given on consignment to the wholesaler, and the wholesaler’s sales floor will then serve as a showroom for their products. Special programs can be created within the wholesaler for resellers who make purchases via the wholesaler, under the condition that they make their sales location accessible for consumers to pay directly with the CT. This will lead to a greater spread of the usability of the CT and, therefore, a faster acceptance of CT by its users.
Consumer data will be collected directly through all purchases of the users, which is not clustered information but rather direct data on consumer needs, especially data from consumers who are not members via IDIFY-CWP. This data can then serve as an information source for the various product laboratories. The wholesaler can serve directly as a gathering place for members from which guidance and training can be provided. To increase the use of the wholesaler, transport options can be offered from the transport of members from the communities to the wholesaler and vice versa. The same transport network can also be used to distribute goods, for example, delivery to wholesalers and resellers or even delivery directly to consumers when they place online orders.
The overhead costs for a wholesaler can be kept relatively low. A great deal can be managed centrally; there is no need to occupy a building in densely populated areas such as city centers, so relatively cheap real estate can be strategically sought. It can be a warehouse and does not have to have a shop appearance. It is better to invest in activities around the physical location that make it attractive for consumers to visit the site instead of purchasing online. The chance of impulsive purchases is much higher when the consumer is in the store in person. To build an efficient network of wholesalers so that goods can be distributed efficiently, IDIFY-CWP can play a strategic role when deemed necessary. For example, suppose consumer visits are absent at a branch. In that case, IDIFY-CWP can enter that region and provide new communities with access to the programs, increasing the likelihood of consumer traffic to the wholesaler due to the ease of use.
The wholesaler will also become a physical meeting place in a mainly digital/online project. As a physical location, the wholesaler can interact with the online marketplace; for example, for the delivery of goods, buyers can have the products delivered to the wholesaler, creating a system of trust between buyer and seller for cash on delivery transactions because the wholesaler can serve as an arbitrator. The financial service provider discussed earlier in this document can open physical branches at wholesalers. Not just a visitor center for the wholesaler but also for several other parts of the project. For example, as a physical location for online communities, this can be useful if online communities require a physical registration or delivery of goods address. It must, therefore, become a support point for many applications within the project, creating an even closer bond between the various communities and users.
Project – Owned Enterprises (POE)
Every company started by the BDF is owned by the project. A separate foundation or trust construction will become the company’s shareholder upon incorporation. As a result, the value accrued within the company will fully benefit the project, and no individual can extract the profits to enrich themselves. Any proceeds, in the form of profit distribution or dividend, will flow back to the BDF or be used to defray other costs for the project. Preference will be given to the BDF, which in turn will have to use it to expand business activities.
Indirectly, all members become beneficiaries of the activities within the BDF. From their role as token holders, they can help determine the policies for all individual companies and the BDF. This also means that the token holders can jointly decide on the amount of tokens the BDF can spend to finance its activities because this may directly affect the value of the holdings of the token holders. The BDF must refrain from entering into debt with third parties to finance its activities. The token holders may decide that individual companies can enter a credit relationship with third parties to finance their internal business activities.
For efficient use of the available tokens, it should be optional to resort to selling tokens at an unnecessarily early stage in the project’s life. Specific attention should be directed towards how the on-chain value can be optimally utilized. Then, we are talking about the value of the project’s assets, not the value that individual members possess. The activities under pillar 3 of the IDIFY – CWP program come into play here and have not been discussed earlier. To be clear, Pillar 3 is a fund where members can save and invest individually with a long-term projection.
These funds could be used strategically to finance the POEs in the second phase, such as expanding production capacity or initiating commercial production of new products supplied by the various research laboratories. Once again, data collection plays a vital role in this, as the data can assess the risk profile for such financing. Naturally, we rely heavily on demand within the project’s community. Whether this production is done by a POE or by one or more members within the community will be the same. They can also be partnerships between the POE and the members who will ultimately carry out production jointly. It should be clear to everyone that it is a project for all of us, not just for pursuing goals. Pursuing goals without clear beneficiaries is like bringing owls to Athens or carrying coals to Newcastle.
If the resources of pillar three are deployed, it should also be possible for individual members to benefit from the same investment opportunity. However, this does not mean a POE can immediately seize the opportunity to raise additional capital. There must continue to be a clear ‘healthy’ relationship between debt and value within the company in question. Initially, a company should use at most 30% of its net profit or shares to finance capacity expansion. In case of exceptions, each POE must keep at least 50% of its shares unencumbered. Otherwise, it will not be able to contribute directly to the project and will miss its purpose, which raises the question of why the project should continue to own such a company.
In all cases, project capital will have to be deployed efficiently. A situation could arise where shares of a POE will be offered to the public through an IPO. This provides a new form of capital injection from outside the existing project economy but should also be accessible to individual token holders. They can purchase shares in the company in question via the country’s stock exchange. However, a duo listing could also be considered, where the second listing will be made available within the project’s proprietary blockchain. This opens up a whole new world for the different trading options with UT because the second quotation should be at a price valuation in UT.
All this increases the involvement of the users in the project and the internal economic activity, ultimately benefiting all concerned.
Although a community economy is not part of blockchain and crypto technology, it should be one of the main focuses throughout the project’s life. Any project that depends on its users and the communities they form needs a healthy economy to claim its right to exist. In this case, a welfare project based on blockchain technology requires even more interaction between members in the financial field for the project to succeed.
This is a blockchain technology project, but it is also a social welfare project. Is the correct labeling of the project essential, or should the focus be on what we develop and execute to the best of our ability so that it has a right to exist regardless of how others label it? There is one thing that everyone should be focused on: No individual is more important than the community we are all a part of. The project has been designed so that no one will be disadvantaged. Everyone will benefit from participating in this project if we adhere to the abovementioned principles. To reinforce this and set a good example, the founders have decided that they will not claim or demand any tokens; the tokens that the founders will own at any time are tokens that they purchase directly during the financing rounds. Any other allocation of tokens can be compensation for performance, as employees can receive a reward from the employee pool when they make extraordinary contributions to the project. The founders are investors in the project, just like any other buyer of tokens in the financing phases. The founders will commit not to sell any tokens during the public sale of the first three funding rounds. After that, they are prohibited from selling more than 5% of their token holdings annually.
The founders will divide their attention to the project into two separate parts. The initiator will focus on developments for the blockchain, P2P payment network, and web portal. The co-founder will concentrate entirely on IDIFY – CWP. They will combine forces with the development of the communities. The strength of every blockchain initiative is the decentralization of power. Thus, letting a handful of project stakeholders decide on everything will not accomplish decentralization. Just as we promise that everyone will benefit from participating in the project, we also ask that everyone contribute and be involved as much as possible in the development and growth of the project. Once again, this project is only as strong as the communities will be. Everyone has a role to play, regardless of what that role will be. But we have to be smart, rely on the power of the community, and not just focus on personal gains.
Not many have the desire or qualities to ascend to the throne of leadership, but someone will have to take responsibility for various parts of the project. Please look at the project’s structure as proposed by the initiators at the start of the project. These are the three components under which the entire project can function. The core is formed by the Alrisha Blockchain Foundation, together with IDIFY-CWP – the community welfare program, and the Business Development Fund, which therefore entirely belongs to the project and will never be allowed to function independently or develop activities elsewhere for the benefit of a limited number of persons. Hence, the color of the BDF is also the color of the entire network. Of course, these are not the only participants or stakeholders in the project. That looks more like the image below.
Three foundations will be formed (Alrisha, IDIFY – CWP, and BDF), each with a board of directors and a supervisory board. In addition, the BDF will receive administrative support from operating companies, of which the foundation will be the sole shareholder. The foundation and the company will each have a general board; the foundation will fulfill a supervisory and administrative role, while the company will be the executive body. The dual structure is due to the different tasks that the BDF performs. It must have commercial activities to guarantee returns on investments, and it will need a separate body that can act as custodians of the assets under management and the reinvestment of the profits.
Board positions must be filled for all entities, and preference will be given to participants among the UT token holders. If there is no suitable candidate, the UT token holders can decide to appoint a provisional delegate. By opting for the construction in which the voting rights on administrative decisions will be vested with the token holders, at any time, they can jointly decide to convert the foundations into DAOs (decentralized Autonomous Organizations). It should be noted that the initiators currently do not consider this the most suitable entity structure because physical presence is often required in the initial phase of every company/project.
Everything starts with adopting a well-functioning management protocol, and we need the participants to ratify such. A temporary governance protocol will be implemented during the start-up phase, but this should be homologated by the participants as soon as possible once the first phase is completed. This also requires a decision on the voting procedure. This must be a fair system in which all votes count. A liquid democracy voting model is being considered.
Liquid democracy voting model
The voting model of liquid democracy falls somewhere in the middle between direct democratic suffrage and representative democratic suffrage. Please take a look at the images for a brief explanation.
A direct democratic voting model is no longer used anywhere regarding critical decision-making. It may still do justice within small communities, but it is no longer applied on a large scale. This is because voters do not want to vote on every topic because of a lack of knowledge to have a clear view of specific issues and will, therefore, focus on issues of direct importance to them. Although a direct democratic voting model is the fairest, it will lose effectiveness because unfounded votes will be cast. That is why most democracies use the representative democracy voting model.
In the basics, it is a good model since the quality of votes is higher; the representatives are introduced precisely for this purpose to gather research and knowledge on the topics that should be voted on. However, the vote of the representative does not have to represent the will of the voter on every issue directly; the voter depends on the representative to make the right decision. In addition, this model is sensitive to external pressure, such as lobbyists and representatives of foreign powers. This makes it less transparent for voters and could compromise their vote. Power over votes is concentrated among a limited number of representatives, so the focus for influence only needs to be focused on these representatives. Every voting model has fundamental flaws; However, each participant must adhere to the recorded agreements to keep the model reliable.
A liquid democracy voting model is somewhere between the two models above. Every person entitled to vote can vote on any subject; no central multi-year election procedure allows members to vote every few years on who they will appoint as representative of the votes. The voter can decide whether to vote directly on a subject or give the voting right on a particular topic to someone else the voter expects to know more about the subject. There are mainly two weaknesses in such a model that need to be guarded against. How often a vote can be passed on to others must be determined. If this remains undetermined, a gigantic web could be created where representatives will rotate votes and use them as “a source of exchange” to get something done from the other person. In addition, care must be taken to avoid creating bureaucrats who have much knowledge about specific subjects and are therefore allocated votes by original voters but who have no involvement in this vote other than the knowledge they possess. Or that stakeholders within a topic put bureaucrats to work to gather votes.
Members will ultimately have to decide which model will be chosen. Voting procedures must be carefully considered and thoroughly recorded. It is, therefore, advisable to do this in advance and not after defects have been demonstrated in previously used methods. The advice is, therefore, to examine the model after each voting procedure and determine whether agreements are still correct or require adjustment. It remains essential that every interested party can have a say and that there will be a high concentration of voters to ensure that the democratic process is as fair as possible. The issue of digital identity also plays a role in this: how certain is it that a natural person casts a vote and not a cluster of bots? How easy will it be to vote? We propose that voting be made accessible through the web portal or mobile application and that no other application be created for the voting procedure. The threshold for casting votes should be as low as possible; Otherwise, most voters will not exercise their right to vote.
Involving many stakeholders in the voting procedures ultimately says little about the decentralization of the project, or at least of the blockchain and P2P payment network. It increases awareness of the importance of the project among members. What is ultimately necessary to guarantee decentralization?
Decentralization and the Community Economy
Decentralization is part of this project, primarily through blockchain technology. The user can trust the network through a high degree of decentralization without human intervention. In a centralized system, one or more individuals could have bad intentions and change the register of actions (distributed ledger) stored on the blockchain to their requirements without others being allowed to verify it. This would mean that all participants must rely entirely on those few individuals who set the rules. But we don’t want that; the users should have a situation where they don’t have to trust anyone, creating a unique situation where everyone can be trusted because no one can bend the rules to their advantage, to the detriment of the majority.
Then there are the following questions: how can this decentralization be achieved, and does that only apply to blockchain technology? Or can it be implemented centrally throughout the project, with a limited number of exceptions for specific parts? The number of different nodes in the system achieves the decentralization of the blockchain. These nodes must be managed by network users, not just by the project’s initiators. We will enlist the help of the largest user group, the communities within the IDIFY-CWP. We propose allowing each IDIFY–CWP micro-community to manage a node. The nodes managed by the communities must be validator nodes that process transactions and produce new blocks. Individual members of IDIFY-CWP will be guided on how to operate independently (minor) nodes, nodes that will route the transactions, i.e., a delegator node.
In addition, we will continue to inform all other stakeholders about the necessity of operating and managing the nodes. There are costs involved in managing a node; the question is whether there should be a particular fixed reward for the work done to recover these costs or whether they become the direct recipients of the transaction fees. The nodes are implemented in the network to ensure decentralization and that the entire system functions optimally, making it a crucial part of the infrastructure. This will undoubtedly be important when the project will have millions of members using blockchain technology as a P2P payment system, allowing millions of transactions to be processed daily. We should trust the system to be fair and transparent and that transactions won’t take forever to be finalized.
It will require a specific investment for the operator of these full nodes because they not only have to invest time but also make a direct investment in hardware and provide a particular amount in UT as a deposit to guarantee their honesty in dealings. They may lose the guarantee deposit when it is proven that a node operator has acted falsely. The deposit amount has yet to be determined, but it will be significant. After all, there must be something at stake to enforce fairness. We must introduce an adequate and transparent revenue model to make it attractive that there will be sufficient node managers.
A standalone model is not ideal to make the investment cost-efficient, but a more integrated model to make it attractive to the node owners is worth considering. This may include mining for proof of work blockchain, where the node manager receives a fixed reward for producing new blocks. At the same time, it can also manage and store data for the proprietary Generative AI model. A model to integrate all three functions into one model is under development but has yet to become available. Once this model is complete, it will be a genuinely decentralized part of the critical infrastructure the entire project can run on. The project will be ready to scale to unlimited users if all these components can be integrated into the proprietary decentralized network.
A lot of work will have to be done because to continue to guarantee security and user-friendliness to users, it will only be possible to use the blockchain of other networks for a limited time. We will start using a sub-net from an external network; parts of the project will always be available on that sub-net (think UT). For example, concessions must be made to the accessibility of blockchain technology and applications for outsiders. The regular users will have full access to all applications and facilities of the project at all times. Still, it should be possible to introduce some gatekeeper function where outsiders must meet certain conditions before being given access. There will be a lot of commentary on such a gatekeeper function. However, the safety of use for existing members is more important than opening up blockchain technology and applications to everyone. This gatekeeper function has nothing to do with users but with the ability for third parties to add applications to the network, which should always be open to prior user voting. If the token holders vote in favor of a particular third-party application, they gain access to the network.
The initiators believe that accessibility for the general public does not determine the degree of decentralization of the network. The number of independent nodes and distribution is the most critical factor to ensure decentralization. It is ultimately up to the members to provide further direction on accessibility from outside; all we can do is provide advice. But if we look objectively at the high usage concentration, everyone will see that the blockchain will mainly be used for P2P payment networks. Then, increased security will have to be built into the system since abuse is quickly lurking if significant capital flows through the P2P network.
The project and the various applications will initially use an existing blockchain protocol. This is done for several reasons, the most important of which is security, as it allows the use of main-net security protocols. At the same time, we will develop our proprietary Layer-1 blockchain according to the Proof of Agreement consensus protocol with an added Proof of Work module. This blockchain will initially not be publicly accessible to not disrupt the development. Various issues will need to be answered during the development phase, such as the energy consumption for mining. We want to make this accessible to as many users as possible, and ultimately, a user with a mobile phone or tablet computer should also be able to participate in this process.
In addition to the proprietary PoA/PoW layer-1 Blockchain, there will be active work on a P2P payment network that can function as a layer-2 application chain on top of the layer-1 chain. This is not new, so it is certainly feasible in its development; think of the first period of Ethereum. The various applications and usage options can then function as independent layer-2 facilities within the entire network. This allows a P2P payment network to be built where transactions potentially can be made through a messaging service for users in areas without direct access to an internet connection. If there is any doubt about the feasibility of such a feature, look at the Valora wallet on the Celo blockchains, which is a wallet that works from the mobile phone infrastructure.
The entire project doesn’t need to run on one of the major blockchains for accessibility to all applications and facilities. For general use, reliability is much more critical. This can be guaranteed much better within a semi-closed environment. The fact that it will be a closed environment does not determine the decentralization or transparency. Because everything is completely transparent to all users of the project’s proprietary blockchain and the various applications, they can independently choose how they want to use it and their involvement and role in the project.
The project’s proprietary blockchain will be developed, and the P2P payment network will ultimately run on it. To be clear, this is the payment network of which the CT is part. Please assume that the UT and the various token trading and exchange applications do not transfer their activities to the new proprietary blockchain. They remain operational on the third-party public blockchain. This is done for several reasons. The main reasons for this are an actual separation of UT and CT, a possible lack of liquidity on a new infrastructure that will significantly slow down the growth of the project, and reliability and acceptance of the token and trading activities can be argued if counterparties refuse to interact on the new proprietary blockchain. A bridge will then have to be built from the project blockchain to the third-party blockchain for exchanging the CT to the UT and vice versa.
The proprietary blockchain will have its native currency that can be used as a means of payment for transaction costs and as a reward for miners in any role. There will be a block reward for each new block created. 50% of this reward is for the block miner, and 50% of the coins must go to the various wallets of the project; these can only be converted for UT at a 1 to 100 ratio. The total supply of native coins will be 14 million, with 7 million going to the project, of which a maximum of 6.375 million tokens will ultimately be exchanged for UT, and 625,000 coins can be used for transaction costs. As soon as the coins are exchanged for UT, they are taken out of circulation, which will have a deflationary effect on the circular supply of the coins.
These coins do not directly influence the community economy, but they can become an exciting part of the whole. The coins can become a perfect mechanism for storing value and be part of arbitrage transactions with the UT. Everything revolves around the price development of the tokens and coins. A deflationary mechanism is also being introduced for the UT. As a result, the relationship between the UT and the project’s blockchain-native currency will always remain evolving.
Let’s summarize first. This is a project that is still in its infancy. Project users are categorized into two groups: the UT holders and the IDIFY – CWP members – CT holders. This project relies heavily on user communities because it counts on the power of communal connection; within communities, there is a natural mechanism of social control among its members, and together, more can be achieved than by individuals alone. Communities formed within this project each have their specific characteristics. The IDIFY – CWP members participate in the CWP program within the community where they are residents. The design of the CWP program makes it likely that these neighborhood communities also form communities within the project. These communities can be referred to as non-spontaneous communities because the composition of these communities already existed before the start of the project. Therefore, the second community formation is spontaneous communities because they are groups of individual users who come together to achieve specific objectives. Think of the UT holders; every UT holder can participate in this community to create a sound basis within the project for the interests of these token holders.
This project aims to increase the average spending budget within low-income communities through a collaborative approach to strengthen income, labor force participation, quality of education, and entrepreneurship. This project will provide structural solutions to the problems caused by the growing wealth gap and income inequality and hopefully eradicate poverty within communities. The difference between philanthropic institutions with this goal and this project is that this project must become self-sustaining. To finance the start-up phase, this project will sell tokens and not rely on the support of donations to keep the relationship with the capital providers on an equal footing. By choosing this model, the project is assured that it is in everyone’s interest that this project will succeed.
The interests of all involved are represented within this project. This means that real value must be tied to the tokens that come into circulation. This can be achieved if the project does not resort to traditional practices of shifting capital from the provider to the recipient, with a percentage contribution retained to cover the costs of running the organization. A significant part of the money should be used to develop a community economy. None of the participants or communities should claim the outcome of this economy at the expense of the other participants.
If no one can claim the outcome of the economy, an automatic mechanism will emerge that is similar to the philosophy behind blockchain technology; the protocols are designed so that no third party or intermediary can claim a dominant role and thus hold the system hostage and change it in a way that benefits them. This also applies to the shared community economy; everyone will benefit if no one can claim the outcome. This allows economic development to be used strategically to achieve goals in everyone’s interest. Adam Smith wrote about this in Wealth of Nations. Smith believes that the government itself should be limited. Its core functions are maintaining defense and order, building infrastructure, and promoting education. It must keep the market economy open, free, and accessible and must not act in ways that distort it. Replace Government with Project or Network, which describes the network’s role to satisfy the users/members. It is not a policy-making position reserved for the token holders but an executive role on behalf of the token holders. Who will staff this administrative body is again up to the token holders to vote on.
What is important here is how the voice of the token holder can be heard. This document advocates a liquid democracy voting model because we believe that every vote of the token holder should count for every subject or decision. This project will not require the installation of a central body, such as the government model for countries. A project like this does not need that; it does need specialized executive bodies, which can, therefore, remain small-scale and carry out the mandate given to them by the token holders. To manage this properly, a constitution must be implemented that everyone must adhere to, including the token holders and the executive bodies. This needs to be a constitution for the entire project and not just the rules and regulations for blockchain technology.
If we look at Adam Smith’s points, this can be translated as follows. Maintaining defense: To implement this, we will first have to analyze the hazards for this project. When the subject is about defense, the first thing that usually comes to mind is one’s territory, ensuring that outsiders do not threaten it. Even though we deal with physical communities, such as non-spontaneous communities described earlier, there is no need for an army with weapons. That task in defense will remain the responsibility of the countries of which the communities are part. What threat could exist that the project members need to be protected from? This includes economic crises that can affect the physical communities of members but also issues such as inflation.
These external threats can affect all members; they must be considered when developing the project’s economy. This project has a significant advantage: we do not have to carry burdens from the past. We must learn from the shortcomings that have crept into existing economy models and shape the community economy differently from those everyone is familiar with. They continue to borrow indefinitely to keep the economic machine running. However, this project faces a similar situation that occurs at the start of the project. Even though there is no direct debt position with the initial backers – those who purchase the tokens during the first three funding rounds – an expectation arises that must be fulfilled. With every purchase of tokens, buyers are promised that they can benefit from this project under Adam Smith’s maxims. A promise made must be a promise kept.
Adam Smith’s Second Theorem: Maintaining Order. Based on this, decentralization is the most important thing we can bring into the project. I.e., Placing power in the hands of the main stakeholders, in this case, the token holders. Once again, it is essential that the voting model will be scrutinized at all times and must always be able to show the flexibility to adapt in detail to the voters’ wishes. Unfortunately, decentralization is not always possible in specific parts and certain phases of the project. Take the example of the executive departments; there must be structure and leadership; otherwise, it can get bogged down in indecisiveness, and nothing will be achieved. However, these executive departments must provide written explanations of how they accomplish tasks and mandates given by the token holders. They can file proposals to the token holders but never independently determine policy.
Building infrastructure, Adam Smith’s third theorem: this goes without saying; herewith, we need the commitment of all token holders. The blockchain foundation is ultimately responsible for developing and maintaining the digital infrastructure so that its use can occur smoothly and securely. Members can help by building and maintaining the blockchain and managing the much-needed nodes, but also by using the P2P payment network, as its use demonstrates what is needed. This also applies to the exchange and trading of tokens and other activities. The blockchain network is part of the digital infrastructure of this project. The physical aspect of the required infrastructure is developed and maintained by the various implementing bodies within the project.
Adam Smith’s last theorem is to promote education. If the project wants to succeed, this part is just as important. First, teaching the use of blockchain technology and all its applications, and second, providing education to ensure members become financially literate. To secure the future and longevity of the project, we should provide training in basic knowledge of entrepreneurship and other vocational training. If properly implemented, it will allow positions deemed necessary for the project to be filled by graduates from training centers. As well we can offer training to those employed within the project. The more we can do with the members together, the less we depend on outsiders.
The economy feeds the community by providing CT to IDIFY – CWP members. But that’s just a start because most users of the CT, especially early in their participation, won’t spend it within the community. None of the tokens represent the economy; they function as a means of payment, like a fiat currency in the traditional economy. Putting tokens into circulation is a start; what needs to happen is that all users will value the CT, thereby accelerating and strengthening the development of the economy.
If users attach value to the CT, they will spend it, and that is how money will come into circulation, which is the first requirement for a community economy. Realistically, they will initially exchange the CT for UT and convert it to fiat currency to spend in the physical community. But monthly repayments will take the opposite route, so a proper circulation of tokens will be initiated. Initially, this will be very limited, but if the project can grow to 100,000 members, we are talking about four million dollars monthly from these transactions that will flow back into the community economy. If we reach the desired 4 million members, it will grow into a payment system that many societies would be thrilled with.
The project will not levy taxes on its members; however, the mandatory installments paid by IDIFY-CWP members constitute a commitment to use the financial resources made available to them. Yet this is just the beginning; money circulation alone is insufficient for establishing an economic base. The BDF will take care of the next layer by promoting entrepreneurship and enabling increased productivity. For the economy, this part of the project will see the most activity. But even now, it counts that the project cannot do this alone. We need the involvement of as many members as possible; this can be made possible through employment with one of the companies that the BDF will manage. Helping members start or run a business, possibly under the supervision and guidance of the BDF, more entrepreneurship within communities strengthens the economy. A vibrant entrepreneurial climate is guaranteed to ensure a vital economy. Entrepreneurship, small to large, privately held or project-owned, starting or growing, it doesn’t matter; increased productivity always contributes significantly to a healthy economy.
Important points of focus
If we highlight the positive aspects of the community economy, we will also have to look at the weaknesses. What could weaken or harm the project economically? Too fast growth can shake the internal economy to its foundations. Technically, this project can grow to 15,000 new IDIFY-CWP members per week. But this is not realistic, especially in the beginning. During the first three phases, the member count will be at most 8,500 members, after which it can grow faster. However, it will always have to be manageable growth. Why does it take three stages before an increased growth will be possible? Because the entire infrastructure has to be built at the same time. After the third phase, the CT must be fully integrated, and everyone can use the P2P payment network.
The second undermining factor will be if users start trading the CT against tokens and coins other than the UT. There is a possibility for such; look at the activities surrounding the PI token. As part of the project, we will continue to do everything we can to prevent this, but we cannot rule anything out. If it does happen, this will be a direct attack on the stability of the project. As part of the project, we must ensure that users can always exchange their CT for UT. Then, they can do whatever they want with the UT. The CT only has a right to exist within the infrastructure of this project. If this right is not respected or compromised, it will cause irreparable damage to the stability of the project.
The third factor is related to this: sufficient liquidity for the UT, IDIFY-CWP membership growth in this project is related to the tradability of the UT. That is one of the main reasons we will facilitate token trading with UT; the project will offer project-own trading facilities and support trading UT on other platforms—however, not all trading platforms. If members want to use a specific platform not supported by the project, they can submit a request to the blockchain project foundation. Every request to the foundation will be processed, but the result depends on an internal assessment of whether it will be honored.
To keep the liquidity provision transparent, the liquidity supply must be separated from the POS deposit guarantees for the blockchain network. What this will look like has yet to be definitively determined; it must have a revenue model. But then, revenue must be earned from the distribution of the transaction costs and not from the direct compensation of the project to the liquidity provider. Since it has auto-cannibalistic features, there will come a time when the project can no longer provide this, and what will happen then?
The next focus should be the communities. Two user groups participate in the project specifically: those who acquire and hold the UT and the IDIFY-CWP members who are offered participation through the program. Everyone must be alert to ensure that no separate interests arise between the two groups or that one group is considered more important. At certain times, both groups can each contribute to a healthy economy from which all participants can benefit. Both are equally important to the success of the project. Let no division arise between the two groups. This project needs everyone, regardless of the role they play. It will flourish based on community involvement.
Finally, it should be mentioned that it would be wise not to entangle the project in the greed of individuals and not to allow applications designed solely to promote the hunger for personal gain. This refers, for example, to applications such as MEV (Maximum Extracted Value). The project should refrain from resorting to the habit of ranking transactions determined by the amount of transaction costs a user is willing to pay. Transactions will have to be executed upon order of entry. We will have to look creatively at how the earnings of the node operators and administrators can be increased, but this should never be at the expense of the users.
That is why the proposal is made for a proprietary blockchain for the project. Suppose the community economy can grow through all economic cycles and withstand external pressures. In that case, there will be enough activity on the blockchain to make the additional investment in time, money, and security feasible. Then, discussions on allowing MEV bots and liquid staking solutions become redundant. Functionality and operability of the network are in the direct interest of the user; that is what the discussion should be about and not what individuals can extract for personal gain. For example, look at what is going on on the Ethereum network, and that only some want to listen to criticism from the developers and founders of the Ethereum. Individual users are willing to compromise the importance of long-term functionality and security for personal gain. Does no one think about how those staking rewards are earned and who picks up that bill?
This is a project for the community by the community; let the common goal prevail so that everyone involved can benefit from it.
Let me close with some loosely interpreted words from Adam Smith:
“A community is not made wealthy by the childish accumulation of shiny metals but enriched by the economic prosperity of its people.”
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