Our Stellar Partnership Grant Program Application

Data Roads Foundation recently applied for the Stellar Partnership Grant  Program with the following project detail entries. Please let us know what you think about this project in the comments.

Briefly describe the proposal using 50 words or less

Nonprofit Co-Op Anchors offering transferrable Donation Promissory Notes (DPN) convertible to charitable class constituency Member Support Tokens (MST), limited Exchanges from eligible fiat (initially $USD only) and In-Kind Donations (IKD) to DPN, and accounting against constituent public ledger holdings for resource pool equity backed Mutual Credit (MC) exchanges between peers.

Business & Technology

Why this project? (Do you have domain expertise? What background do you have in building out this technology? Why do people need this?)

In order to end undue economic paternalism in government welfare and related regulation of private and international charitable organizations, charitable class constituents require access to exchange tokens (usually some form of currency) that allow them to decide on what support products and services they prefer, not whatever some enormous or remote institution decides they can get. Efforts at simply allocating fiat currency to everyone in need, such as Basic Income, are in process but still very controversial. A much more ancient and proven solution is mutual or peer credit, where peers exchange goods and services for promises of some defined future recompense (eg. seeds for part of a future harvest, nails for some portion of near future carpentry projects, etc.), tracked via simple tools like beaded strings and marked tally sticks, with no interest rate or debt imposed as long as credit terms are satisfied within agreed timeframe (see “Debt: The First 5000 Years” by David Graeber). Assets can be exchanged in-lieu of other recompense as agreed, but liquid currency or similarly easily transferred assets are much easier alternatives for general credit term payoff. Community resources can also be modeled as a commons pool, to be managed directly by members within each community (See “Understanding Institutional Diversity” by Elinor Ostrom). Community nonprofit assets and equity — most often some combination of fiat bank currency endowments, in-kind asset donation holdings, and a volunteer labor pool — can be managed cooperatively as one such common resource pool.

The Data Roads Foundation mission to solve “digital divide” and international humane Internet access has a lot of overlap with other related online nonprofit entities, so we have developed the unique strategy of promoting Nonprofit Utility Cooperatives — I.R.C. 501(c)(12) or 501(c)(4) compliant nonprofit membership cooperatives. Due to the fact that network routers and access devices all require electrical power, we don’t stop at telecommunications equivalent network utilities, and extend our direct promotion to local renewable power generation and cooperative microgrid technology solutions. The same community members also require water and other utility infrastructure to live and participate online, so no service that can be provided by a community utility is unrelated to our mission. Forming these membership cooperatives allows any community to stop paying monopoly prices, and start controlling community resources directly among local peers. Resources in excess of local capacity can still be hired by and among these cooperatives, but community negotiation power always benefits from larger constituencies, rather than our current atomized monopoly “customer” arbitration processes.

The legal and institutional border lines between profiteers off local utility monopolies and nonprofit cooperative utility member-ownership are too often thin, and enforcement too often flimsy. Tracking these community resources as nonprofit-only accessible assets, whether liquid or durable, present or future, helps us to better define and enforce these border lines. Local investments into these cooperative utilities and their needed infrastructure should never allow extraction by any remote or unduly powerful actors, so locking in these infrastructure assets as community commons equity is very important. Charitable class member constituencies of these cooperative utilities also deserve a democratic say in their operations. Therefore, tracking these kinds of local infrastructure assets as Donation Promissory Notes (DPN) and Member Support Tokens (MST), and then enabling local membership zero-net exchange economies via community equity-backed Mutual Credit (MC), all serve to support our core mission and cooperative member-ownership strategy. Our preferred open source mesh topology network routing methods are also better suited to distributed systems like Stellar.

Our shorthand for these community shared-infrastructure cooperatives is Local Shares Networks (Local-Shares.Net for shorter and URL’s). We are proposing here establishing both Data Roads Foundation and our partner Local Shares Networks as nonprofit Anchors and Exchanges, specifically to manage a public ledger of these nonprofit and tax deductible community resource exchanges. We are also open to defining a new parent Anchor institution to be organized as a multi-constituency membership democracy, similar to our partner Local-Shares.Net cooperatives.

What partnerships are necessary for the success of the project? How do you plan to obtain these partnerships?

Local Shares Networks or similar existing community cooperative institutions will be necessary partners for scaling out this project, and for managing their respective community commons resource pools democratically and humanely in the long term — in keeping with Elinor Ostrom’s scientific findings concerning commons resource management. We are actively educating the public and promoting formation of these cooperatives, initially throughout the U.S., and eventually internationally. These Anchor and Exchange duties will become another community service to help them sustain and promote their local infrastructure investments.

Banks and payment providers will be necessary Anchor partners for converting fiat tax-deductible currency into DPN. Local businesses, preferably member cooperatives and workplace democracies that provide for local needs of members and accept their MST or MC tokens, will be needed as partners for nonprofit MST issuers to fulfill their local service goals — for example groceries for poor families holding MST issued from nonprofits fighting starvation and malnutrition in their community, taken as either MC or MST, eventually to be converted as In-Kind Donations (IKD) to DPN by partner nonprofits.

What technology is the company/team going to build?

Anchor and Exchange servers to:

  • allow partner nonprofits to create transferrable Donation Promissory Notes (DPN) in exchange for fiat currency or in-kind resource donations,
  • issue public key infrastructure (PKI) identities to constituency members for democratic votes and local Web of Trust (WoT) development,
  • retire DPN to instead issue Member Support Tokens (MST) to charitable class members,
  • and to track all DPN and MST equity holding allocations against Mutual Credit (MC) promises between peer members.

Client software for these token exchanges will all be cross-platform open source software targeting all network utility member devices, including “buy one give one” (BOGO) device purchases for charitable class members.

Some basic accounting software ledger clients will also allow:

  • nonprofits to issue donation receipts for “committed” or “retired” dedications of DPN,
  • 1099 or similar tax collector forms for net DPN exchange based fiat income at the end of each fiscal year,
  • and leaderboards for “Thanks” and “Gratitude” based on DPN and MST dedications to commons resource pools, respectively.

No documents will ever be issued for MC exchanges, as those are always expected to result in net zero exchange on completion, unless settled using DPN or MST which is documented separately as noted above. MC exchanges between peers sufficiently near each other in the local PKI Web of Trust may also opt not to back these exchanges with any public equity promises, and thus such MC transactions can be completely private, and tracked by the public ledger as MC only nominally. The privacy of MC exchanges may be preserved using a different ledger technology, for example zk-SNARKS.

How will the technology integrate with Stellar?

Anchor and Exchange consensus concerning fiat, DPN, MST, and MC exchanges will always be publicly tracked via Stellar public consensus ledger. In-kind donations (IKD) of digital resources like compute, memory, storage, network bandwidth at given latency among Local Shares Network members can be converted to DPN, Lumens, or other online token resources as chosen by each member. These fair-market valued online resource donations can offset their membership costs, hardware and maintenance costs, or simply provide accounting records of their tax deductible donations. To our knowledge, no other simple way to track online resource in-kind donations exists today, despite existing distributed processing applications like SETI@home and JavaScript BitCoin miners.

What language and dependencies will you use? Will this project be open source?

Python is preferred for most of our new code, along with Cython optimizations utilizing LLVM and Vulkan cross-platform compiler toolchains, but we can operate in other languages as available open source libraries require. We prefer workplace democracy and worker-ownership affirming licenses, including the Peer Production License and AGPLv3.

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