Regional & Community Currencies

When a project has mostly localized impact — such as street lighting in a particular town, for example — it may be impractical to fund it through the generalized currency model, since validators who are selected at random from across the ecosystem (and likely from around the globe) may not value the project as highly as the local community, which would result in a minimal impact score (and minimal funding). Similarly, such a project may be of low priority in the wider ecosystem, and take a long time to get reviewed. How then can the protocol solve the problem of public goods for projects whose impact is mostly localized?

In the case of public goods projects with localized impact (“localized” could refer to a community sharing a geographic location or a set of interests), a localized currency may be preferable for coin issuance. This currency would work similarly to the protocol’s native (generalized) currency — value-preserving coin issuance — except the rules to get localized expertise and level of localized influence (for example, based on years of residence in a location) are set by the community.

To get funding for a (mostly) localized public good, an Estimator would create an Estimate post and set the currency for compensation; suppose a project mostly has local impact, some regional impact, and a bit of impact on the overall ecosystem. The Estimator would indicate the expected impact in each of the currencies. Then, first and second tier validators are randomly selected from the relevant categories (within the wider ecosystem). Then, third-tier validators are randomly selected from each currency pool.

To drive demand for the local currency, as well as reduce expected sell pressures, each community can determine the economics associated with their currency and utility; for example, a town may decide to use its currency for municipal services and public transportation. A gaming community may decide to use its currency in games, and so on.