VandyILL a non-practicing Doctor of Jurisprudence (JD), employed within Business Intelligence Validation and engaged in research around alternative finance, focusing on Radix as the rails of a new paradigm of Local Finance (LoFi).
‘The Local Stack’
‘The Local Stack: DeFi for Empowering Local Economies (’LoFi’)’ is a whitepaper written and presented for comment by VandyILL. The paper addresses the need for decentralized financial infrastructure, particularly for local economies, referred to as "LoFi" or local finance. It emphasizes the potential of DeFi to empower any economy, no matter its size, to be resilient and to shape its interactions internally and externally. The overarching theme is the empowerment of local economies through decentralized financial solutions, allowing for more community involvement, autonomy, and resilience.
In addition, the document presents an intertwined set of tools on the Radix platform that aim to revolutionize local economies, bringing them into the digital age. The holistic approach encapsulates various facets of the economy, from businesses' operational tools to local economic stimuli via complementary currencies and basic income systems. LoFi looks beyond traditional DeFi, leveraging the power of community and local resources, synergizing them for a more sustainable and inclusive economic future.
- The Local Stack: This is a term introduced for a set of blueprints on the Radix decentralized ledger that intends to provide reusable financial infrastructure. This would allow any economy to determine its desired degree of economic centralization or decentralization.
- Centralization Concerns: The document touches on concerns about economic control being concentrated in the hands of a few, and the subsequent negative consequences this brings to local economies.
- The Role of RadixDLT: RadixDLT, the first Layer-1 network designed for Decentralized Finance, is emphasized as the platform for The Local Stack. It meets crucial requirements:
- Redeployment of Applications: Allows new instances of applications without needing to change or create code.
- Composability: Applications and resources can interact and combine, enhancing local economic activity.
- Scalability: Can handle a large volume of transactions, making it suitable for local and global economies alike.
- Securitized Rental Units (SRU): This enables renters to earn equity with each payment, thereby incentivizing them to invest in their communities.
- DAO-JOBS Act Spectrum: Recognizes the need to bridge the gap between fully decentralized autonomous organizations (DAOs) and regulatory requirements like the U.S.'s Jumpstart Our Small Businesses Act. The aim is to allow community members to become stakeholders in local businesses.
- Other Initiatives: Include basic financial tools for small business DAOs and a local Complementary Currency System (CCS) and Radix Universal Basic Income System (RUBIS).
- BOTs are designed to operate specific sections of a business where it's practical.
- Their presence on Radix promotes credibility, especially for organizations involved in crowdfunding.
- Leveraging the ledger technology for operations such as payments can enhance transparency, reduce fraud, and aid in regulatory compliance.
- There's potential for cost savings compared to traditional vendors.
- The tools could redefine the perception of DeFi, emphasizing its regulatory compatibility and away from its reputation as a "financial Wild West".
- CCSs have been around before the digital age, promoting local economic growth by binding currencies to specific communities.
- Radix's version is inspired by the BerkShares model, but with the flexibility of customization and redeployment.
- These currencies are backed by another (like BerkShares' 1:1 backing with USD), but are programmable to foster local economic objectives.
- Radix's platform allows for innovations such as transactional "taxes" based on local badges or funding decentralized autonomous organizations (DAOs) and distributing benefits to badge holders.
- An example underscores the potential of CCS in encouraging local purchasing habits in sectors like grocery shopping, driving broader trends in product diversification and localization.
- RUBIS represents a decentralized approach to Universal Basic Income (UBI) specific to Radix.
- Unlike CCS, RUBIS isn't backed by inherent value. It's a coin minted monthly and distributed to badge-holding accounts.
- The intent is to rejuvenate underutilized local resources and acknowledge community members, potentially morphing into a social currency.