As the new year finds its stride, we’d like to take a moment to recap our progress in 2022, what we have planned for 2023, and announce the release of our new 

Last year we witnessed the inevitable collapse of projects and institutions with shaky foundations. This trend is far from over. The technologically driven transformation of society is finding its stride and the corresponding turmoil associated with such a major restructuring is accelerating.  Underneath the noisy surface, the industry dedicated to building the decentralized infrastructure and tools for building our new institutions is growing rapidly. There are more projects who are focused on real, long-term utility than ever before, and there is an immense amount of protocols and platforms to use that simply just work. For entrepreneurs and projects like ours dedicated to bringing these new systems to life, this moment is immensely fertile. The major hurdles facing the growth of this space is the ability to design for adoption, and it's not as simple as more on and off ramps. In short, there are huge opportunities for those who are building for people outside of the tech/finance world, described in more detail

As we end this year and look ahead, we want to share a recap of our progress and developments in 2022, and what’s ahead in 2023.

We made some major internal breakthroughs on our design of underwriting and risk management to support automation and thus scalability. We describe the new design 

 which we will pilot in the networks we launch this year.

These are the projects that we have confirmed to start this year. Our team is working on the technical requirements and business/strategic preparations to get started in the Spring.

Serving the $650 billion Reciprocal Trade industry:

, one of the most widely used trade exchange and trade network management platforms and ecosystems, and

, a global decentralized payments protocol to facilitate seamless payments and commerce with digital, crypto, and trade currencies that can auto-convert to digitized silver, gold, or fiat.  The goal of this partnership is to set an industry tech-standard for the global barter and mutual credit industry, based on the ReSource Stable Credit Protocol. The standard is intended to serve the 400 established networks served by 

 as well as future trade networks while scaling globally with the benefit of the LODEpay infrastructure. The collaboration will provide a ReSource-powered full-stack approach to running next-generation trade networks with means to manage credit risk, stabilize network currencies, absorb defaults, and allow for inter-network trade in a rules based, permissionless and predictable manner.

Financing for the under/unbanked in Kenya: 

, we will pilot a mutual credit network in informal settlements of Nairobi. Waumini (believers in Kiswahili) will leverage a locally existing, informal IOU system and transform it into a standardized, well-managed liquidity engine. The project will offer the best existing franchisees of Sanergy’s Fresh Life initiative, to become “Ambassadors”, who will recruit members for Waumini and earn income for bringing on good members and fostering trades. Waumini’s future plans are to provide a platform for other social enterprises to reward their customers for their prosocial behaviors by giving them access to fair credit and opportunity for additional earnings that is powered by the ReSource protocol. 

Mutual Credit + Unconditional Basic Income (UBI) as a package for kickstarting an economy:

 in Uganda for the 3rd quarter of 2023, providing mutual credit lines to one of their existing communities of ~500 women entrepreneurs who have already been receiving UBI and are eager to learn what other opportunities web3 can bring to them when it comes to accessible and inclusive financial tools. This partnership is exciting for both of us as it could be deployed with other existing impactMarket networks around the globe. Its success would provide a model that uses UBI as a first incentive for someone to onboard into a network which can then be sustained and grown through access to credit (mutual and/or traditional).

Collaborative financing for the underemployed in South Africa:

 has been addressing the hunger crisis in two main ways. Firstly with their charity model whereby they rescue excess, nutritional food - that would have gone to waste - from the food chain, including modern agricultural industries, and redirect it for free to those who need it most.  Secondly, in conjunction with their charity model, through the SA Harvest Entrepreneurial Incubator, beneficiaries are helped to become food sovereign via in-site entrepreneurial training and support. They are interested in mutual credit as a tool for civic society organizations to create jobs and become more sustainable themselves as organizations. Our pilot will center on a collaborative effort to create added-value products, such as a product from a farm. The network will pay laborers in credits that can then be spent back with the farms or on other offerings from the partner organizations and donors, providing access to resources, jobs, credit, and strengthening community ties.

What else? We have capacity for exploring 1-2 more partnerships for 2023 - please get in touch with us if you have any ideas. We are only able to support partners with established networks at this moment in time.

Mutual credit and local currencies have not yet been widely adopted, but we and others think that the innovations with decentralized ledgers and the general financial revolution underway is going to change that.  We plan to spend 2023 demonstrating the viability of the protocol in a variety of contexts, and generating learnings that provide a foundation for them to grow.  In addition to understanding how mutual credit can unlock more value for businesses around the world, we have chosen these pilots because they enable us to explore the different dimensions of what’s possible with the protocol and ultimately what can demonstrate pathways to scale for the industry. 

We are excited to collaborate and build alongside the other projects who are growing this ecosystem alongside us, including 

, and many more. We look forward to partnering with real world trade networks who already have decades of relationships with small businesses all over the world, and to expand into partnerships outside the typical domains of the crypto and trade network ecosystem. 

In 2024 our team will prioritize the infrastructure and tools needed for any community to start and grow their own networks.  We will also start to focus on partners in the traditional institutional space who are looking to adapt their operations to the changing financial reality. 

We wish for you and us that 2023 will be a year of progress on the frontlines of decentralization and increasing access to economic opportunities.  

As the new year finds its stride, we’d like to take a moment to recap our progress in 2022, what we have planned for 2023, and announce the release of our new website and protocol documentation. 

From the ReSource team 

 protocol that allows participants to access credit at extremely competitive terms, often at 0% interest, while freeing them from their dependence on external capital providers such as banks, creditors, or even investors.

Arguably, to many this may sound too good to be true. Afterall, who in their right mind would lend money to anyone without charging interest or while settling for minor fees that are easily outcompeted by better investment opportunities? To answer this question we first need to understand what Mutual Credit is, what its shortcomings are, and how ReSource uses blockchain technology to overcome them.

First of all, let us clear some confusing terminology. 

 shouldn’t be confused with Mutual Banking, Credit Unions, or Cooperative Banking. While Mutual Credit shares similar ideological roots with the now widely proliferated concept of Cooperative Banking, the two terms refer to two different institutions. While a Credit Union is just a normal bank that happens to be owned by its customers, sharing profits with them and offering them fairer terms on their loans, Mutual Credit is a much farther reaching concept, attempting to fundamentally change what credit actually is.

While a Credit Union depends on the aggregated capital of its members, which it then manages, loans out and invests on their behalf, a Mutual Credit system is not dependent on pre-existing capital in the form of money, but rather relies on the non-monetary resources of its members (such as unsold inventory, productive capacities etc), to create its own internal commodity-backed monetary system.

Being able to create their own money, Mutual Credit systems are freed from the need to “rent” money from a creditor (or cooperative members) in order to lend it out to third parties. This trick is what allows Mutual Credit to be available at close to 0% interest.

“Creating your own money” may sound dangerous; or even shady, but it’s far from it. In contrast to the fiat money we’re used to, or even new forms of blockchain-based currencies such as Bitcoin, Mutual Credit money is more of an accounting device that keeps track of mutual obligations. It is, if you will, a physical (or digital) representation of a ledger entry, that by its very nature tends to preserve its value. Let us explain:

The example below depicts a simple Mutual Credit system with only three members: Alice, Bob, and Carol. The three of them don’t have any money, but they do have productive capacities. All three of them are able to deliver goods or provide services — if not now, then at some point in the foreseeable future.

Money is introduced into the system once a participant, Alice, decides to purchase an item from another participant, Bob. When she does so, a deficit is created on her account and a deposit appears on Bob’s account. This way money is effectively “spent into existence”.

In the same way, Carol overdrafts her account in order to purchase an item or service from Alice. This returns Alice’s balance to zero.

If Bob now decides to purchase an item or service from Carol, his deposits will be remitted to her, covering Carol’s deficit while returning both of their balances to zero. At this stage, the network will return to its equilibrium zero-deposit state in which no debt, and hence no money, exists within the system.

You may have already spotted an important attribute of Mutual Credit systems: The amount of money within it equals the amount of debt, or obligations among its members. This is where Mutual Credit money derives its intrinsic value from: each money unit in existence is required by someone within the system to pay their debts. This means that the existing money supply always matches the demand exercise on it by outstanding loans. In later posts we will come back to this point and elaborate on it further, but let us recognise for now that as long as the system can deal with defaults, monetary stability is fundamentally guaranteed.

As a three player game, this system is obviously very limited in scope and utility. For this to make sense, we need to presuppose that Alice, Bob and Carol are able to match each other’s demand with the supply they are able to generate. However, not dissimilar from Social Networks, the ability of the network to match demand with supply grows exponentially with its size. A trading network consisting of hundreds of members can already facilitate meaningful trade, the moment we get into the thousands we have a functioning micro-economy.

Ok, so if it is that easy to create your own micro economy in which liquidity is always available — when and where it is required — then why didn’t this concept outcompete the often exploitative credit practices commonplace in traditional finance?

Well, with all its obvious benefits, Mutual Credit comes with a few drawbacks that have so far complicated its growth and adoption. Addressing these shortcomings is the whole raison d'etre of the ReSource project. What these shortcomings are and how we at ReSource use DLT and DeFi mechanisms to address them will be discussed in our upcoming post.

In the meantime, if you have questions and want to learn more about Mutual Credit and ReSource, join us on 

ReSource is a Mutual Credit protocol that allows participants to access credit at extremely competitive terms, often at 0% interest, while freeing them from their dependence on external capital providers such as banks, creditors, or even investors.

ReSource Finance Blog

From the ReSource team

From the ReSource team

What is Mutual Credit?