A growing contingent in the crypto world focuses on a concept of ‘regenerative’ finance termed refi, which relies on the premise that social engineering, through economic incentives, smart contracts, mass data collection, and Artificial Intelligence, can create a positive outcome on society, and thus avoid the abuse of incumbent power centers through ‘decentralized’ digital organizations which implement the engineering and govern its evolution.
In reality, much if not all of the regenerative finance web3 endeavors offer a quieter path for central banks/governments/corporates to fulfill goals such as banking the unbanked, increasing data capture, enabling digital management of resources, industry, education, nature managing and commodifying natural processes. A few centers of activity have caught my attention for their close relationship to social impact finance paradigms and global capital.
The first part of this series will focus on ‘Community Currencies’ (CC), and digital twining for use in social impact finance and insurance securities. Risk management plays a major role in designing these cybernetic-social-financial systems, which require a higher level of modeling and analysis before the bigger players commit any kind of serious capital into any sort of product.
As the social impact finance sector grows, data capture and analytics increasingly builds these digital twins. Technologies like blockchain provide secure, real time, 24/7 open data feeds, and built-in interoperable identity systems for people and machines. These are all facets of the developing global brain, or metaverse – a transhumanist project or perspective about the evolution of humans.
At its core, the metaverse is the sum of all communication protocols. In other words, information in globalized, semi standardized systems, facilitated through the language of computers, binary mathematics. The internet, telecommunication networks, blockchain, closed communication systems (corporate or national) all embody different approaches and aspects of the metaverse. As these systems have matured and permeated much of society, the possibilities of the metaverse vastly increase. As it is a system based on mathematics and electrical engineering, it needs to be highly organized, and thus, inherently restrictive.
Without blockchain or similar database technologies, it is difficult for the system to scale. Digital twins, essentially live simulations, are a requirement for managing cybernetic systems in almost any context whether it’s an industrial or social system, and the vast majority of humanity is forced to contribute to its development, as the modern continuation of domination principles increasingly coerce, force, or manipulate people to interface with our burgeoning cybernetic enclosures.
Engineering of Society: Community Currencies and Catastrophe Insurance
NAIROBI, KENYA – In 2020 the Danish Red Cross and Grassroots Economics, and BlockScience teamed up to implement blockchain-based Community Inclusions Currencies. Grassroots Economics, a recent grantee of the UNICEF innovation fund, operates primarily in Kenya since 2010, and focuses on implementing community currencies. The Community Currencies program created digital profiles for the sake of impact investment.
Blockscience and a few related organizations sit at the forefront of complexity modeling in the web3 space. They create digital twins of their clients’ systems for purposes of risk management and elucidating complex dynamics. The idea of community currencies goes all the way back to the origin of money, but in the international aid perspective they evolved out of food-supply voucher programs, which were attempts to provide access to necessities in distressed areas by distributing vouchers that could only be used for certain things. In the last decade, unconditional direct cash assistance became much more popular with NGOs, but has other consequences. The money tended to leave the local area quickly, and not circulate. The paper also cites Oxfam reports that physical cash opens more risk to theft, violence and local corruption. Community Currencies are an attempt to find a middle ground between those two paradigms. An academic review co-written by Grassroots Economics cofounder Will Ruddick, describes the differences and argues why they think Community Currencies serve better:
Unlike an aid voucher, CCs [community currencies] can be spent and re-spent across all member businesses that accept them. An aid voucher connected to a local business is immediately cashed out after its use. While this injected national money might circulate, it might also be spent on goods or services from outside the community (we shall refer to these as external inputs or imports) and depart the local economy. A CC directly addresses the problem of leakage of national money from a local, less developed community. The purpose of CC aid is for recipients to spend them locally and raise the likelihood of earning CCs back when the community’s purchasing power folds back in on itself, creating circular chains of spending and income
In other words, they argue that Community Currencies can help insulate local communities by not allowing money to leave the local economy. However, actually implementing this requires financial and social engineering in the actual place. Local merchants and other hubs where people spend money end up as focal points that the NGOs use to manage the supply of the Community Currency. Experimenting with different systems since 2010, Grassroots Economics essentially ended up investing in various businesses with donor funds to guarantee their acceptance of the Community Currency and help manage the supply/demand balance:
In 2017, GE [Grassroots Economics] unified all the different paper CCs into one fungible paper CC called Sarafu-Credit (Sarafu meaning currency in Kiswahili), retaining the expiration date and thus the promise of reciprocity (see Figure 1). But rather than purely decentralized production, GE had started in 2016 to invest in community businesses that would guarantee acceptance of Sarafu, which we call producer credit in Table 1. The establishment of general stores, subsidized by KSh donor funds, located in the communities, provided goods that effectively backed the currency. Donor funds also partially financed cooperative businesses (public goods) like a maize mill and coconut oil factory, that would always accept CCs. With these ‘authorized entities’ GE could manage their excess balances through con-version into KSh, and thereby manage CC supply, system wide and reduce overall imbalances. [emphasis added]
I highlight this process to show how these are managed systems, designed and implemented by foreign organizations. Running these systems requires cultivating local hubs through donation and investment.
According to their research, Community Currencies multiply the impact of donor funds, because of their circular nature.
The expenditure multiplier, or the number of times in which cash circulates in a community, has a central role for long term development aid. Indirect measurements of aid over the long run hint that cash injections (CVAs) generate modest long-term impact or none at all (Clemens et al. 2004).Overall, these interventions were said to be cost effective, leveraging donor funds 10 or more times.
Grassroots Economics eventually moved to digital systems to implement Community Currencies and by 2019 was using the Proof of Authority Blockchain system.
In late 2018 GE began transferring the paper currencies to digital records accessible on mobile phones and by 2019 all of the Sarafu became digital currencies, operating on the POA blockchain public ledger. Payments could be done without the internet on simple mobile phones and donor funds paid all the telecom fees
In 2020 they began using the xDAI blockchain, which has been rebranded as Gnosis chain. The xDAI blockchain used the stablecoin DAI as its primary currency and was operated by a consortium of web3 players. As Gnosis Chain, they transitioned to a Proof of Stake system, but retained xDAI as the primary currency. DAI is a stablecoin created through the Maker protocol, one of the largest defi applications in crypto. After migrating to the blockchain, they began creating digital profiles for the sake of impact investments.
The blockchain allows for data collection that allows impact Shilling investment donors to give cash directly to recipients and social enterprises tied to sustainable development goals. Community members can be endorsed on the basis of their data, or they can curate their own blockchain data profile to attract impact investors. CC transfers can also be distributed to users as aid or income on the basis of surveys and metrics e.g., on transaction data that proves residence in vulnerable household areas, helping to target future aid and cash transfer programs. [emphasis added]
This helps frame the Community Currency concept in the paradigm on social impact finance. It is also worth pointing out that this system does not require a formal self-sovereign identity, only a blockchain address that has been proven to be created by a unique individual (think biometrics).
In areas of extreme distress and poverty, many people have no official forms of identification to begin with, but may have a phone or can be given a phone. To target these populations and get around the lack of formal identity systems, they instead provide them with blockchain based Universal Basic Income, for example, the only requirement for which is to prove they are a unique person. Once the person receives the UBI and starts spending it they are building a digital identity, which can be used for impact finance, and progressively interfaces with any future formal identity systems that may be implemented.
So what role does BlockScience play in all of this? Notably, they are not mentioned once in that 30 page paper describing Grassroots Economics’ work with the Red Cross. BlockScience is all about modeling systems, specific complex systems, in a mathematically rigorous way. One of their core tools is called cadCAD, which I’ll let them explain:
cadCAD (complex adaptive dynamics Computer-Aided Design) is a python based modeling framework for research, validation, and Computer Aided Design of complex systems. Given a model of a complex system, cadCAD can simulate the impact that a set of actions might have on it. This helps users make informed, rigorously tested decisions on how best to modify or interact with the system in order to achieve their goals.
With all the engineering, statistical, computer science and crypto economic knowhow, BlockScience creates schematics to both help their clients understand their own designs, test for unforeseen potentials, and relay acquired data to update the model. This means digital twinning. Here are the founder Dr. Michael Zargham’s words from an interview about the Red Cross project:
“By creating a digital twin of the CIC [Community Inclusion Currency] ecosystem, one can simulate and test policy choices, and protect against otherwise unforeseen system failures. System shocks like we’ve seen with COVID-19 are examples of those unforeseen circumstances which models can help us test resilience to in advance.” [emphasis added]Michael Zargham
Blockscience’s role is to create the digital twins to model the CIC system. Here is the schematic used for the digital twinning of the Community Currency system, providing exact descriptions of all the different entities involved and the possible/permissioned interactions.
Shruti Appiah, a researcher at BlockScience, is a top engineer in the industry. She currently is Head of Product at IOHK, the organization building the core Cardano infrastructure. Shruti also cofounded Consensys Labs and helped lead Okta’s 50 million-dollar investment into decentralized identity start ups. Okta is a multibillion-dollar company building identity management products.
We will dive into Consensys in much more detail in another segment, but for now it is useful to know that it was started by Ethereum co-founder Joseph Lubin, and is one of, if not the most influential firm in web3. Besides building much of Ethereum, and investing widely in that space, they are involved in most major institutional blockchain initiatives including the IMF, Bank of International settlements, as well as private consortiums and international aid.
One of their advisors, Shermin Voshmgir, is the Director at the Cryptoeconomics Research Lab at Vienna University school of Economics. She took part in one of the World Bank’s Blockchain for Education Community of Practice meetings and was on the advisory board to the Estonian eResidency Program. BlockScience also developed the alphabonds for IXO. Alphabonds are a smart contract-based financial instrument that adjusts based on continuous data gathered through impact projects. They also help design systems for the social impact project Impact Data Consortium Chain, which has a Blackrock employee as a director and uses the IXO blockchain as its primary platform.
The Supercomputer Military Contractor Creating Digital Twins For the Insurance Industry
As financial thinking and computers consume the world, historically exotic financial products gain viability. Parametric insurance, a class of insurance which pays out claims automatically based purely on observable metrics, such as wind speed in a hurricane, is a perfect match for the data and ‘green’ paradigm. Structuring and assessing risk in parametric insurance encourages mass digital twining of the world in the name of protecting the earth. The same companies undertaking the digital twinning, directly work for the military and industry. Unsurprisingly, blockchain emerges as a key infrastructure for scaling and managing these systems.
Parametric designs were first implemented in catastrophe insurance. According to a World Bank report, the first parametric catastrophe bond was issued in 2006 through the Mexican government. The Red Cross first dipped their toes into sponsoring their own catastrophe bond in March 2021.
Volcano ash plume height serves as the trigger metric for the catastrophe bond. A company called Replexus partnered with the Red Cross to bring the bond to market through their blockchain platform focused on trading securities.
In an interview, Nick Williams, Co-founder of Sempo, Adam Bornstein, who works on alternative financing at the Danish Red Cross, and Will Ruddick of Grassroots Economics, talk about Catastrophe bonds, community currencies and how they expect the two to merge in the future.
“A Cat Bond is a security that is used to transfer risk of financial loss arising from a catastrophic event from the sponsor to investor. The Danish Red Cross is sponsoring the world’s first pure-volcano catastrophe bond. This parametric cat bond is structured such that the principal is paid to the Red Cross if specified trigger conditions are met.”
Eventually they hope to merge the catastrophe bonds with Community Currencies:
“Furthermore, as the CIC platform expands, globally, there becomes a very interesting opportunity, potentially, to develop various social impact and insurance linked securities for regulated investors. Imagine creating suites of crypto enabled mini-cat bonds that help direct targeting funding to mitigate against risks associated with conflict, climate change, and other humanitarian crises without so much as relying on algorithms, bonding curves, datasets, and pre-arranging funding commitments – in the near future, this is how chunks of humanitarian assistance will be allocated.” [emphasis added]
As we see with their work on community currencies and social impact finance with Grassroots Economics, they clearly see blockchain as the cornerstone of the cybernetic aid system.
In insurance-based securities, especially in parametric approaches where the payouts are based on a measurable metric, there is always a third party company tasked with environmental and economic modeling of the specific event. Mitiga Solutions provided these services to the Red Cross.
Essentially, this is the same sort of thing Blockscience does. Creating a digital twin of a physical system which has financial incentives to model possible outcomes. However Mitiga operates in the traditional industry-military complex. Founded in 2018, as a spin-off of the Barcelona Supercomputing Center, the company
“is a leading start-up in the development of technological solutions for the prediction and management of the effects of climate change based hazards through the use of HPC (High Performance Computing) solutions and Artificial Intelligence.”
Beyond just modeling for the risks of events they also model the potential asset impact, both in terms of physical assets and purely financial assets such as securitized catastrophe bonds. Their customers include major multinational defense contractors, NASA, NATO, United Nations Development Programme (UNDP), and some of the largest insurance companies in the world, such as Axa and Willis Towers Watson. Atmospheric sciences appears to be their specialty, and they work with the major air traffic control systems in Europe.
The only investor I could find was the venture capital arm of Banc Sabadell, a major spanish bank. They joined Microsoft Startup track in 2020, migrated their computing platform into Microsoft’s Azure and relies on their cloud platform. The partnership expanded in 2022 for co-development of a “fully transactional” insuran-tech saas (software as a service) platform for risk management. Microsoft and Mitiga together are evaluating the use of Microsoft’s Planetary Computer Platform.
In a report Microsoft released to highlight their commitment to the UNs Sustainable Development Goals They describe the planetary Computer: “Over the past year, we have committed Microsoft to becoming a carbon negative (SDG 13) and zero waste (SDG 12) company that is building a new planetary computing platform to transform the way we monitor, model, and ultimately manage Earth’s natural systems (SDG 15)”
Mitiga’s founder, Alejandro Marti, currently leads the wind/hail working group at the UN’s Focus Group on AI for Natural Disaster Management and was a board member at the Partnership for Advanced Computing in Europe (PRACE). PRACE, is in part funded by The EU Horizon Innovation Fund and:
is established as an international not-for-profit association (aisbl) with its seat in Brussels. It has 25 member countries whose representative organisations create a pan-European supercomputing infrastructure, providing access to computing and data management resources and services for large-scale scientific and engineering applications at the highest performance level.
An article published by PRACE about Mitiga Solutions’ approach to epidemic modeling in sub-Saharan Africa, highlights three phases of development. The first is “participatory surveillance”, where data is sourced from surveys about how people feel, which then cross-references with government data. The data is then put into agent based models. The third phase comprises “business intelligence that helps to reduce the financial impact of any disease outbreak, providing information about how supply and demand, transport, financial markets and other institutions might be affected.”
Coming full circle, Mitiga Solutions was involved with a Red Cross Project involving Community Currencies in Africa, where people earned tokens for providing information about their health status. While we can’t say for sure that this is the same project as the Grassroots Economics project, there cannot be many other Community currencies projects run by the Red Cross in Africa.
“Looking beyond the project, Mitiga is working on promoting a programme in Africa with the Red Cross that aims to incentivise people to provide information about their health. “This concept, known as a community inclusion currency, is based on blockchain technology and provides people with tokens that can be exchanged for certain good such as food, transport or education when they give information about their health status” [emphasis added]Dr. Marti
The Grassroots Economics/Red Cross project specifically mentioned the use of surveys to decide how aid is delivered. With Mitiga’s involvement, this is direct evidence of a military contractor incentivizing/coercing distressed populations for their data in exchange for aid, then using that data to create digital twin models and inform impact investors/insurance markets.
Moving back to the catastrophe bonds. These products are considered in line with the UNs SDGs. The Guernsey International Insurance Agency issued its first Environmental Social Governance accreditation to Dunant Re IC limited, a cell of Replexus. Replexus is the company responsible for the blockchain based securitization of the catastrophe bond sponsored by the Red Cross and modeled by Mitiga .
The framework was launched in Guernsey earlier this year and has awarded Dunant Re IC Limited – an Incorporated Cell of Replexus ICC (Guernsey) Limited, managed by Aon Insurance Managers (Guernsey) – the first accreditation of its kind.
They go on
It follows the United Nations’ recommended approach of incorporating ESG processes to align sustainable development goals with the outcomes of financial services products, services and investments made by the insurer.
Guernsey is a British Crown Dependency island in the English Channel off of the coast of Normandy. The fourth largest captive insurance domicile in the world and largest in Europe. Captive insurance refers to essentially any insurance provided by a corporation, as opposed to self-insurance. Highly connected to London, Guernsey provides the sort of insurance famous offshore opaque financial debauchery.
Replexus describes its mission:
The ultimate goal of Replexus is to move Insurance Linked Securities (ILS) Funds away from the ‘traditional reinsurer’ model.
Later on in the page
Replexus sees this issue and the solution; to create a liquid market of securities on an electronic platform to replace the illiquid reinsurance model.
Their blockchain-based sister company Bloxsys, also founded by Cedric Edmonds, manges this electronic platform. They also claim to have run the first live system of “dematerialized tradable securities ever on a blockchain”. Bloxsys facilitated the issuance of 14 Million dollars-worth of securities in 2017, and as of 2020, 23 securities have been issued through Bloxsys. They describe their product as a:
system, which involves various trust structures and issuers, allowed for the creation of asset-backed securities on a private permissioned blockchain. The system allows investors to purchase and hold these securities on the blockchain and to enter and settle secondary trades directly themselves using their nodes on the blockchain.
Founder Cedric Edmonds bio from their website
He is a reinsurer by background, first at Catlin Syndicate and then Swiss Re in Zurich, moving to Allianz Risk Transfer in Zurich in 1999. He has a background in traditional reinsurance as well as structured reinsurance. He moved to Solidum Partners in 2008 and founded Replexus in 2020.
Solidium, the company Edmonds worked at before founding Replexus, was the partner in the Red Cross’s other blockchain based catastrophe bonds.
[Edmonds] has been a source for ideas and innovation in the ILS market. In 2009 he Set up a Guernsey ICC and then in January 2010 issued the first ‘private placement insurance linked securities’ later named ‘cat bond lite’ by Trading Risk. In November 2010 these securities, which were settled over Euroclear, traded in the secondary market, the first time collateralised reinsurance had ever traded. [emphasis added]
The private placement part of that is important. Private placement instruments are never publicly listed, and do not require disclosure to the SEC. According to Prudential private capital
“The three most important features that would classify a securities issue as a private placement are:
The securities are not publicly offered
The securities are not required to be registered with the SEC
The investors are limited in number and must be “accredited”
In many ways social impact bonds, where payouts to investors are based on specific measurable outcome metrics, follow the same structure as insurance linked securities. Insurance linked securities are all about transferring the risk of payout (life insurance, meaning death, etc.) to capital markets.
These examples of community currency and catastrophe bonds projects help illustrate the movement towards integrated cybernetic environments where simulated financial, social and environmental systems blend together. Blockchain and web3 are foundational tools in these sorts of systems, especially in the areas of financial settlement and identity. The next installment in the series dives deeper on the different blockchain platforms built for these purposes, and their connection to the established global powers.
Cover image: Budget shoe store and repair shop in Kenya participating in the Grassroots Economics/Red Cross community currency project Sarafu-Credit. Source: Red Social Innovation, Red Cross
Blockchain, Digital Twins, and Global Brain Economics – Part II
Building the “Decentralized World Bank” Through Blockchain Based Community Currencies and Social Impact Finance
In an interview between Shanzhai City co-founder, Chris Gee and Dr. Shawn Conway, project manager of its spin-off organization Impact Data Consortium Chain (IDCC), Gee mused about using blockchain technology and social impact finance to build a global decentralized development bank:
“the story of decentralizing development finance…[is] a story of decentralizing the World Bank. Nothing against the world bank, Its just I feel like there are gaps to overcome. And this is something that plays very well now that we are talking to much larger investors, much larger pools of capital. To them doing things like micro finance, doing things like direct donation aid. Yeah these are cool things to do, but if we are saying that we can actually make a decentralized development bank out of the aggregation of all of these tools we are putting together, they are very much behind that”.
Originating from a blockchain project focused on social impact called iO2, Shanzhai City is a service provider for data-centric social impact projects in China, primarily focused on Hong Kong. In 2018, it merged with the IXO impact verification protocol, expanding the scope of its projects beyond China, and in August 2020, it launched IDCC, which is being billed as a revamping of Shanzhai City to become suitable as a global organization.
In the Medium post announcing its creation, Shanzhai City asserted its belief that “the Singularity of human civilization has occurred and [is] pointing us toward an exciting and unpredictable future,”
With IDCC, we aspire to contribute towards the advancement of a totally new framework for impact management with more decentralized and participatory frontline impact validation, micro-services, and verifiable data flow that dramatically improves the resolution, accuracy and accountability of impact measurement in order to help accelerate meaningful innovation, responsive policy-making, and precision investment not just for Hong Kong, but for Southeast Asia as well as the entire global impact industry
The majority of executive staff and advisors for IDCC hail from Chinese NGOs, Universities, or international finance based in China, all of whom have social impact as a main focus in their career.
Featured above holding the signed agreement between IDCC and the Hong Kong SIE, Dr Tat Lam was the Chief social scientist and cofounder of iO2. He sits as one of seven directors of IDCC and formally advises IXO as of 2020.
IDCC director James Leung, worked at the The Boys and Girls Center of Hong Kong for twenty years, which launched a NGO called Guangzhou Growth Dynamics Social Work Professional Development and Resource Centre, where Leung also worked for several years. The Chinese government and Accenture are the primary funders for the Guangzhou NGO, and the Target foundation is also a partner.
Accenture is one of the largest technology and consulting companies in the world. They are a major driver of the digital revolution and wields a heavy hand in the impact investing world.
As part of the launch event for Trust Over IP, Accenture’s head of Decentralized Identity and Biometrics, Christene Leuong, talked about the “networks of networks” emerging to connect disparate identity silos across industries. Trust Over IP is an linux foundation initiative for global standards around interoperable digital wallets, credentials, identity and data verification.
The Accenture Development Partnerships acts as their international innovation and impact arm that works with “iNGOs, INGOs, private foundations, international financial institutions, bilateral and multilateral donors, and corporations to seize the promise of change and create positive social impact in developing countries”. One of their leaders Louis James is on a steering committee for the World Economic Forum’s Technology and Social Justice Community.
The Target Foundation is the non profit arm of the Target corporation, which puts major emphasis on philanthropy in their hometown Minneapolis-St. Paul Minnesota, however they do operate globally and are connected to the elite establishment of international philanthropy. In 2021, The Target Foundation awarded a grant to the British Asia Trust, one of the main operators for the Quality India Education Development Impact Bond that IXO participates in. They also support an global aid organization called co-impact whose primary funders include the Bill and Melinda Gates Foundation, Rockefeller Foundation, IKEA Foundation, MacKenzie Scott (Jeff Bezos ex wife), and Jeff Skoll.
One of their seven directors is Johnson Kong, an investment steward analyst for Blackrock. The Investment Stewardship arm of Blackrock focuses on determining executives and leadership for the companies they have a stake in. He is in part responsible for voting decisions throughout China. Before Blackrock, he worked as a researcher for Our Hong Kong, an arm of the Chinese government focused on the long term transition of Hong Kong in the ‘one country two systems’ paradigm. There he published numerous papers on social impact finance and ESG related topics. Kong is also part of the World Economic Forum’s global shapers program.
An IDCC advisor, Edmond Wong, headed the Hong Kong branch of Raiffeisen Bank International AG, the international subsidiary of Raiffeisen Zentralbank Österreich AG, one of the largest banking groups in Austria.
Another director, Terence Yuen, founded and serves as executive director for Hong Kong institute of Social Impact analysis. They work with b-Labs, which the Rockefeller foundation funded in 2008 to create standard impact metrics. Several academics, highly involved in data analysis, social impact and entrepreneurship, advise IDCC as well.
Publicly, three core initiatives comprise the IDCC’s work. The Impact Intermediary Capacity Building workshops, System Library of Impact Management (SLIM), and Decentralized Development Finance Framework (DDFF).
The purpose of the workshops is to train organizations to operate in this new paradigm of social work. SLIM refers to a whole suite of standards related to impact investment management. Shanzhai City supports these activities as well as the various impact organizations in partnership with IDCC.
The first major social impact project is encompassed in the DDFF, to study and digitize local time banks in Hong Kong. Traditionally, time banks are small scale organizations where people can offer their time, in the form of their skills or labor, as a means of payment for local goods or services. These time credits were recorded in a paper ledger and often served people who could (or would) not participate in the money based labor markets. Described as a form of mutual aid, Local communities formed their own culture about the rules and details of the time bank.
The Hong Kong Council of Social Services (HKCSS), along with several NGOs have worked on tokenizing local time vouchers with Shanzhai City since 2019. The end of 2021 concluded the early phase of the operation, and now they are looking to expand to the entire city.
In an ethnographically-framed report, titled Blockchain for Time Bank Vouchers & Community Currencies, Hong Kong, the DDFF provides an overview and rationale for digitizing and consolidating time banks. This was in part funded by the Interchain Foundation, the Swiss foundation behind the Cosmos blockchain, which undergirds the IXO protocol. The IDCC asserts that a major problem with the current state of time banks is the lack of scalability and integration into the larger economy.
A large gap in the time bank model is that it does not design workforce development and upward mobility, providing little support and without an ‘exit strategy’ from the time bank community, providing little incentive to graduate towards more robust ways of building capacity and financial improvement.
They explain how they plan to achieve this by subsuming each time bank into a digital network that’s directly tied into the impact investors and established social services.
“Specifically, we aim to create a common technology stack that horizontally links different time vouchers programs together as a network of users as well as products and services, and vertically connects time vouchers programs with critical funders such as corporates (CSR), philanthropists and impact investors who are interested to contribute resources to the ‘reserve’ backing the time vouchers.”
Creating a ‘reserve’ of traditional currency from donors backing the community currency, as well as the use of digital identity to create impact profiles, mirrors the Red Cross project with Grassroots Economics. While the full details of the financial modeling are not available, they basically operate on a fractional reserve banking principle, where donors and corporate funds can have a wider economic reach by minting money backed by their initial capital.
IDCC onboards target populations onto a mobile application which contains a DID (Decentralized Identity), an e-wallet where the tokenized time vouchers can be minted and exchanged, and access to an online marketplace where people can sell goods and services with the tokens.
An administrative bureaucracy adds people to the system. A consortium of NGOs and governments generally sit at the top of the hierarchy. These onboard local service providers, who then onboard local community leaders, who in turn, grant access to the target users. Data acquisition occurs throughout the entire process. The chart below shows the various levels and roles throughout the hierarchy.
Shanzhai City/IDCC developed a model for compliance to onboarding people without formal identities called ‘Progressive KYC’. In short, this principle means identifying people through their social groups rather than purely personal information. These aggregate social groups are then managed by a system of hierarchical managers, starting with a community leader, then NGO administration, etc. As individuals begin to use the system more, they are progressively able to provide the type of information traditional compliance laws require. This model seems to be prevalent in the blockchain aid programs that target people without formal identities.
Progressive KYC can happen top-down or bottom up. For large organizations like governments, development banks and INGOs, the trusted institution will be onboarded with the highest level of KYC Administrator who can create a Social Group in the system and invite people like program managers, village heads and community workers to become Community Delegates, who can then invite more people into the group as Community Members.
Once the initial system gains momentum, all users begin to generate more and more data which increasingly ties them to the traditional KYC systems. Their partners in the progressive KYC research include:
|Implementation Partners||Knowledge Partner||Technology Partners|
|Brazil Ministry of Social Development (MDS) – Early Childhood Development policy||Chinese University of Hong Kong Alumni Charity Foundation||Kyokan – DID & Wallet|
|China Research Development Foundation (CDRF) – Early Childhood Development program||University of Hong Kong Sustainability||XWings – Progressive KYC, decentralized transfer and exchange|
|Hong Kong Council of Social Services – Time Bank||Columbia University||BlockScience|
|Malaysia Ministry of Human Resources & Liberty Shared – Human Rights Auditing||Grassroots Economics|
|Myanmar Yangon Municipality – Municipal Bond||IXO Foundation|
|Laos Ministry of Agriculture & World Food Programme – Seed loss prevention|
|Papua New Guinea Ministry of Agriculture – Coffee Trade|
Announced in February 2022, they are extending the initial pilot with several NGOs and The Hong Kong Council of Social Services, into a city wide project involving:
In response to the problems identified, we extend our partnership of time vouchers program among 4 NGOs to a broader pool of stakeholders including more social purpose organizations who facilitate community-based mutual support, corporates who are interested in donating their products and services for corporate social responsibility (CSR), and charities who intend to improve the sustainability of their funds. In short, we are building a collaborative programThe Time Consortium
They are also working with Grassroots Economics, thus BlockScience, to optimize their “fractional reserve” for the community currencies, as well as implementing IXOs alphabonds.
IXO developed alphabonds in the Quality India Education Development Impact Bond, with multinational bank UBS, BlockScience, Interchain Foundation, and edtech platform Chimple, covered by Silicon Icarus in The New Face of Colonialism Part I & II . Alphabonds are a smart contract based financial instrument that they describe as
the world’s first cybernetic Sustainable DeFi mechanism which is built into the Internet of Impact. Alphabonds dynamically adjust the blockchain state in response to real-world risk signals.
This helps the social impact investor manage risk for their investment.
The general structure of an impact bond bases the investors profit and return of initial investment on verified outcomes from the project. IXO has completed extensive work on tokenizing this basic structure and creating the communication systems between an impact project’s smart devices and the blockchain to enable automatic verification. For example, in the project with Chimple, test scores and other data from the children’s phones would create the ‘verification proof’ showing the students meet an arbitrary benchmark. This would automatically trigger a payout to the investors who purchased the tokenized impact bond.
However this structure does not allow an investor to bet against the success of the impact project. The secondary market for these tokenized bonds would likely know the same information as the investor, making it difficult to sell. To maximize returns for investors they needed to figure out how to let investors bet against the project. Understanding their solution requires a brief overview of blockchain finance.
Bonding Curves – Precision Finance
A major part of blockchain based finance hinges on a structure called bonding curves. Somewhat difficult to grasp intuitively, bonding curves are a mathematical function that determines the exact price a token sells for based on how many tokens have already been bought. The function forms the ‘curve’ determining what price the token sells at a certain supply. This creates essentially a controlled marketplace where the future price is known.
The shape of the curve reflects the designers desire, they could decide to heavily benefit early buyers (many shenanigans occur in the unhinged defi world), or make a more stable less speculation prone market. The slide below presented by Blocksciences Shruiti Appiah, shows an example bonding curve. Think of the Y axis as the money put into the system, and the X axis as the token supply. Based on this curve, as more people buy, the price per token increases.
In impact finance, the risk of a project’s success or failure determines the value of the bond, if a project does not meet their outcome goals then the investor loses out on profit or even suffers a loss. Information about how well a service provider trends towards the desired outcomes informs this risk. Regular bonding curves can not change as more information about a project emerges, so they cannot price the project accurately. Alphabonds provide a mechanism to adjust the bonding curve based on a live assessment of risk in the project.
Alphabonds ‘solve’ the problem by creating an internal prediction market where the investor can stake their tokenized impact bonds on either the project’s success or failure. They are rewarded or penalized depending on whether they guessed correctly. Live information generated from devices used in the project, for instance children’s reading test scores, informs the investor on whether the project will likely reach their outcome goals.
Based on how the investors bet in the prediction market, a probability of success is calculated and then feeds back into the original financial parameters of the impact bond. They consider the investors’ participation in the prediction market a measurement of risk for the impact project, which can be used to determine a ‘proper’ risk/reward balance for the financial parameters of the bond. This helps make the impact fund continuously investable as well.
These types of financial instruments, where investors can both bet against and for an impact project, attract the larger financial space whose needs center on profit. It also benefits institutions with massive datasets about social behavior and access to advanced Machine Learning algorithms. Those institutions theoretically should have a major betting advantage compared to someone just betting based on the project’s data.
Remember all of this occurs in the context of highly complex digital twins systems modeling every possible human and machine interaction. Blockscience also admits it’s not clear who should be allowed to participate in the prediction market, since obvious conflicts of interest emerge, such as service providers betting against themselves.
The possible uses for alphabonds also extends to any tokenized financial instrument that depends on ‘verifiable outcomes’ such as parametric insurance. Hopefully the above helps explain why such a system is required or desirable for large financial institutions investing in social impact finance.
For a more detailed explanation of the highly mathematical and complex world of alphabonds, refer to this presentation from BlockScience.
The Decentralized World Bank
As we saw in the quote at the top of the article, the designers see themselves as creators of a decentralized World Bank. Much of the work to reach this point comes through Dr. Shaun Conway, who has worked in the Gates financed international health system for decades.
Occupying a variety of roles, Conway was a technical director for the WHO for ten years and ended up with the UK’s Department for International Development (DFID), eventually leading “a data-driven global aid transparency and accountability initiative”. The initiative was a third party evaluation of the International Health Partnership (IHP+).
“The IHP was launched in September 2007, bringing together 26 signatories: 7 countries, 18 bilateral and multilateral partners, and the Bill & Melinda Gates Foundation to sign a Global Compact for achieving the health related Millennium Development Goals”
The ‘IHP+ Results’ operated through a firm called Results LAB, that provided these ‘third party’ evaluations not only to the IHP, but the World Bank, WHO, and other high profile agencies. Dr. Conway worked for Results LAB for about five years. Being in charge of evaluating massive programs underscores Dr. Conway’s significant leadership position in international ‘development’.
At the beginning of this evaluation position, Conway began formulating the now manifest future of smart contract-based social impact investments in 2008, before bitcoin even existed. He gave this presentation outlining the fundamental ideas, and was remarkably prescient.
He also went on to launch the ‘The Africa Medicines Impact Investment Fund’, a side project for UK DFID created and funded ‘Southern Africa Regional Programme on Access to Medicines, which has open ties to Soros’s Open Society:
The Africa Medicines Impact Investment Fund (AMIIF) is an innovative purpose-driven investment vehicle that will deliver measurable social and development impacts by increasing access to affordable, good quality medicines and diagnostics in sub-Saharan Africa, through providing capital for initiating and scaling up regional pharmaceutical marketplace innovations
Moving into the mid 2010s, he began working on TrustLabs, the organization which launched IXO’s predecessor, Amply.
Given his significant position as the lead evaluator for a litany of international development programs, strong connections to the Gates network, and long standing involvement in the UK, birthplace of the Social Impact Bond concept, Dr. Conway can be considered a thought leader in these elite circles, and as far as I’ve seen, the furthest along in developing the conceptual framework of how digital technology will revolutionize oligarchy based international philanthropy. So, when he talks about creating the new decentralized international development paradigm, we need to pay attention.
Engineering this system are individuals with long careers studying impact finance, ESG and social work. While I have likely down played the role of the individuals from the Chinese establishment as a result of research difficulties due to the language barrier, some of these individuals hail from the global health and humanitarian aid establishment – Dr. Shaun Conway and William Ruddick, in particular.
As explored in Part I of this series, Ruddick implements community currencies in Africa, and opens people up to impact investors, who rely on digital twins to manage the system, and maximize data collection. Conway served the Gates global health apparatus, British foreign development interests and appears to be one of the first people to conceive of a blockchain-like system to financialize and digitize philanthropy.
In conclusion, a Chinese government-funded operation, the Impact Data Consortium Chain, in partnership with global capital led by Blackrock, created a blockchain social impact infrastructure for the city of Hong Kong, and plan to scale beyond the region. They are implementing the first smart contract based cybernetic financial instrument, to harmonize the data gathered on a social impact project, with the profit-seeking interests funding it.
Blockchain, Digital Twins, and Global Brain Economics – Part III
Packy McCormick, a16z’s advisor on web3, wrote an article sponsored by a DeFi platform called Celo, which contains a ton of information about the project’s origin, goals, investors and applications built on top of it. It acts as an argument for the ReFi ideology, and specifically cites a paper written by Jonathan Lageard, a member of the World Economic Forum, for the Brookings institute.
The core argument posits that we are in this global mess because global finance does not price nature correctly, if they could just get the right price for ‘ecosystem services’ and ‘natural capital’ such as biodiversity, clean air/water, happy soil, etc., then we can save the world.
Titled Interspecies Money. He states that the core problem of the market economy is that it does not price natural capital correctly. To ameliorate this, he proposes an idea that the crypto community has pursued for sometime now: tokenize everything.
“It is proposed that the Bank for Other Species (or, more likely, its private sector settlement agents) will create a digital twin for other species that will serve as their identity online. In practical and legal terms, it is the digital twin that holds the value—the equivalent of a few cents, a few dollars, or even a few tens of thousands of dollars in LM (rare life-forms may hold sums equivalent to a rare Rolex watch). Computational and human proxies will allow the nonhuman to express simple preferences. Money will be spent or invested based on these preferences.”
Since an ecosystem cannot be trained to use a smartphone, the AI acting through the digital twin ecosystem and embedded environmental devices will actually choose how to spend this money. Packy’s runs with Ledgards writing:
Financialization is a dirty word, but the system is particularly dirty for those whose interests don’t have a price. Ledgard wants to fix that, and help reduce extreme poverty in the process. It’s just one example – albeit the most colorful – of a movement called Regenerative Finance (ReFi). ReFi is a beautiful idea – a re-imagining of the financial system using the tools humanity now has at its disposal to better account for the needs of all stakeholders, current and future. It puts a price on externalities, charging those who create negative externalities (like the Once-ler) and rewarding those who create positive externalities (like the Lorax, who speaks for the trees)….Regenerative Finance (ReFi) is a multi-trillion dollar opportunity to do well by doing good, and Celo is becoming its home.
“A price on externalities” though a digital system requires machines to be omniscient. The engineers, corporate DAOs, religious elite, collaborate with the machines to determine what is positive and negative. Celo, the “regenerative finance” and web3 movement builds the database infrastructure, which secures the interoperable identifiers for each “externality” Lageard lays out in the requirements for creating his proposed system:
The requirements for interspecies money include the ability to give nonhumans a digital identity, the ability to accurately address financial value, the availability of distributed computing, the ability to gather sufficient data to build a verification system trusted by markets and governments, the ability to model the gathered data with AI and other systems, and, above all, the support and trust of local communities.
Celo, web3 and the ESG paradigm all center on these requirements.
Building a Blockchain Suited for Social Impact
While a significant player on its own, the Celo network shows us a microcosm of larger patterns. The larger patterns comprise energies financializing and digitizing all conceivable natural processes in pursuit of an integrated, engineered world system. Beyond dominating the material, managing thought and focus is required for manifesting such an ambition.
Celo, like many others, constructs narratives that tap into peoples genuine and heart centered desire to help others and the world. As a technology, Celo has been specifically designed to target the poor and displaced, while also focusing broadly on social and environmental impact infrastructures. This overview provides a wider view of the project and its relationships to power.
A company called c-Labs builds the Celo blockchain. The founders of c-Labs, Sep Kamvar, Rene Reinsburg, and Marek Olszewski, met at the MIT Media Lab.
Their core technological innovation revolves around being a ‘mobile first’ blockchain to maximize potential social impact. Their ethos and marketing centers on the phrase “regenerative finance” (ReFi), covered in Part I of this series. This budding movement in the web3 world centers on projects focusing on ‘social welfare’, often citing the UN’s Sustainable Development Goals, and generally involves either bringing the unbanked into blockchain, digitizing agriculture and ecological systems, and general social impact infrastructure such as IXO.
By enabling access to the blockchain for anyone with a phone (or even a flip phone) they target poor or displaced people to onboard them into blockchain based financial applications and blended humanitarian services, building a digital ID system in the process as well as bridge to traditional compliance networks.
The main focus for Celo resides on creating the technology best suited for social impact. From the whitepaper “For a cryptographic social payments system to prosper, sending a payment should be as easy as sending a text message, and the volatility of the currency should be minimal.” They have created a system where someone can receive crypto with their phone numbers serving as the public key for their blockchain wallet. This focus is essential for the international aid world to utilize public blockchain systems.
They also rely heavily on “Zero-Knowledge Proof” cryptography, which refers to a class of cryptographic designs that allow two parties to interact on the blockchain without revealing any information about each other. The design principles also help general scaling of transactions and creating interoperable blockchains.
Often people mistakenly see privacy concerns in technology as something that mostly consumers care about. However the drive for privacy in the blockchain world comes primarily from corporate and government interests. A country or company does not want all of their financial relationships immediately disclosed the moment they make a transaction, this could mean the loss of competitive advantage or unsavory information coming to light.
Claims about data privacy in the tech world only go as far as hiding personally identifying information from the data. Those claims are suspicious in and of themselves, but they never address the broader issue which revolves around the use of data period. All digital information generated feeds the algorithms running on the cloud, the focus on personally identifying information completely ignores the literal harvesting and alchemical representation of mind into a mathematical construct.
Celo and CBDC
Digital wallets function as the interface to digital identity. This is where an individual would actually make transactions, participate in fintech, receive UBI, access licenses, health status, etc. People generally focus on the larger aspects of CBDC, but the wallets are a huge part of implementing the program. For now, mobile phones dominate the global market, so any CBDC or large digital initiative needs mobile applications to be viable.
The Valora wallet, spun out of cLabs in 2021 through Celo co-founder Marek Olszewki, provides the main interface to the Celo blockchain for mobile devices. Nearly all projects, especially those targeting the poor and displaced, use the Valora wallet. Mercy Corp, Grameen Foundation and the World Food Programme are examples of organizations they work with.
As a separate company, Valora raised 20 million led by A16Z. The CEO Jackie Bona worked for Google for seven years, Twitter for three and Spotify for three. At Google she received the second highest executive reward for her work as a founding member of the YouTube monetization team. At all three companies she focused on international product marketing.
Celo’s mobile-centered technology, that allows anyone with a phone number to receive crypto, helps fulfill a major goal of CBDC, reaching the unbanked. At the Global CBDC Challenge hosted by The Monetary Authority of Singapore, the Valora wallet showcased Celos potential use for central banks implementing a retail CBDC system. Out of 300 participants, cLabs was named 1 of 15 finalists. The IMF, World Bank, Bank of International Settlements, UN and Asian Development Bank all took part in the event as well.
Ezechiel Copic appears to be a main liaison between Celo and central banking networks. He worked at the New York Federal Reserve Branch for over 6 years, was director of Central Banks and Global Policy at the World Gold Council for 4 years, is the Vice Team lead at the International Telecommunications Union (UN) for their Digital Currency Initiative, a member of the EU Blockchain Expert Panel, and a member of the World Economic Forum.
He co authored the WEFs Digital Currency Governance Consortium White Paper Series and wrote a white paper for Celo, titled Shaping the Future of Digital Currencies, which lays out a design where a private CBDC network hosted by the central bank interoperates with the Celo public blockchain in order to bring CBDC to retail users.
This allows the central bank to maintain a private network where they control the issuance of CBDC to banks and other payment providers. Those entities then bridge to the public Celo blockchain and handle the KYC and verification of individuals. With this design, any blockchain based application could use CBDC as their native currency, and with Celos focus on mobile users this would help the banks financial inclusion prerogative. Several technical details unique to Celo makes this bridging system possible.
Founders, Other People, and Investors
The three founders of Celo have significant connections to both the global and technological elite. The following bios are quoted from an article written by a16z web3 advisor Packy McCormick.
Sep Kamvar studied Chemistry at Princeton and got his PhD in Computational Mathematics from Stanford. While at Stanford, he co-created EigenTrust, a P2P reputation system, and founded a personalized search company, Kaltix. Google acquired the company in 2003, pre-IPO. Sep ran personalization for Google from 2003-2007, before heading to MIT, where he was the LG Career Development Professor of Media Arts and Sciences and ran the Social Computing group at the MIT Media Lab.
The Social Computing Lab studied the psychophysiological responses of preschoolers at Montessori schools through wearable sensors. The project started by Kamvar, is called the Wildflower Network, where the social computing lab established a network of Montessori schools as laboratories to gather data on children. They aim to track all movements with cameras and sensors. The project has expanded to at least 35 schools in ten cities (including one in Puerto Rico) as of 2019, and they plan to follow the tech ethos of maximum expansions. The Chan Zuckerburg, Walton foundations and Omydiar network have all donated to the foundation.
Rene Reinsberg grew up in Germany and graduated from WHU – Otto Beisheim School of Management, one of Europe’s top business schools, where he wrote his thesis on options pricing. He interned at McKinsey, worked in Global Capital Markets at Morgan Stanley out of school, and consulted on finance and community-building projects for the World Bank before heading to MIT for his MBA. While there, he cross-registered at Harvard Law (Cyberlaw), MIT Computer Science Artificial Intelligence Lab (Linked Data Ventures and AI), and MIT Media Lab (Social Design, where he met Sep).
While at the World Bank Rene Resenburg worked in Caracas, Venezuela focusing on ‘community projects’ and the Civil Society Initiative.
Marek Olszewski grew up in Singapore to Polish parents (fun fact: his grandad helped city plan Singapore in the 60/70s) and later studied Computer Engineering at University of Toronto for both undergrad and his Masters. After U of T, he headed to MIT for his PhD in parallel systems, a prescient choice. During his education, he interned at Microsoft, Google, and Sun Microsystems, and was a Facebook Fellow at MIT.
Marc Olszeski’s grandfather kyrstn Olszeski, was part of the UNs team of consultants involved with city planning, and was later appointed head of Singapore’s long term planning and development.
The Three of them met at MIT and began developing Celo in 2017. By 2018 they had graduated from the World Food Programmes Innovation Accelerator, which birthed the world’s largest biometric blockchain based digital ID system Building Blocks.
The Innovation Accelerator is funded primarily by the German Ministry for Economic Cooperation and Development, the German Federal Foreign Office, and the Bavarian State Ministry of Food, Agriculture and Forestry. However other funders and core partners were listed.
Major Investors in Celo include:
- Deutsche Telekom
- Jack Dorsey
- Arriana Simpsom
- Reid Hoffman
- Linda Xie (Scalar Capital)
- Naval Ravikant
- Elad Gil
- Andreessen Horowitz
- Paradigm Capital
We could fall into major rabbit holes with all of these investors, however let’s limit ourselves to one unusual investor for a cryptocurrency, Deutsche Telecom. Today Deutsche Telecom is the largest telecommunication company in Europe and top 5 in the world by revenue.
The company originates from the post agency of the German Empire, the Deautsche Bundespost.
General postmaster of the Deutsche Bundespost, Heinrich von Stephan, approved a telephone experiment by the American Alexander Bell in 1877. Understanding the potential, he then put the new technology under the control of the Bundespost.
Alexander Bell, inventor of the telephone, founded the company which would go on to have monopolistic control of the telecommunications infrastructure of the United States. The discovery of blockchain technology is in part attributed to researchers at the Bell Communications Research lab, Scott Stornetta and Stuart Haber.
Celo on the Cloud
Deutsche Telekom announced their token purchase and position as a validator on the network in April 2021. Being a validator means they run a node in the network of computers that comprises the blockchain. Celo is a Proof of Stake blockchain, and as dictated by the game theory engineering that characterizes blockchain, they stake the Celo token to earn rewards for proper behavior.
Deutsche Telekom will operate infrastructure across the Celo ecosystem. To do so, Deutsche Telekom’s subsidiary T-Systems MMS will operate as a validator utilizing the Open Telekom Cloud (OTC). The OTC fulfills the strict security and compliance requirements of the European regulatory framework, ensuring secure financial services are available via smartphone the world over.
A16Z contracts T-systems MMS to stake their Celo tokens as well. Currently, they run nodes on three other blockchain networks, Q, Polkadot and Chainlink. Technically, Chainlink is not a blockchain, rather it’s a protocol that provides “oracle” services to blockchain applications. You can think of it as a data feed that smart contracts can use, since blockchains cannot access information outside the blockchain, oracles are extremely important for building almost any smart contract based application. Deutsche Telekom is a top three data provider for Chainlink.
Besides the role of their cloud computing network to secure the network they also provide SMS services to Celo.
In addition, Deutsche Telekom will open up its SMS API to allow validators to send verification text messages using their service. Increasing the diversity of SMS providers on the Celo platform improves both the security and reliability of the decentralized phone verification protocol, which plays a central part in making the Celo blockchain easy to use.
In other words, they are helping secure not only Celo’s blockchain network, but securing their ability to interact with mobile devices as well. For those unaware, T-Mobile is a subsidiary of Deutsche Telekom. In a published interview, with a representative Oliver Nyderle, he was asked what role does Deutsche Telekom played in blockchain:
The Open Telekom Cloud is an important cornerstone of our infrastructure. By far the majority of all blockchain nodes run on cloud platforms from Amazon, Microsoft and Google. Errors on these platforms do not correlate with the Open Telekom Cloud. We thus ensure more decentralization and fail-safety. In addition, the establishment of decentralized identity systems (Self-Sovereign Identities, SSI) as a service and provision via the Internet is one example. Verifiable digital proofs are a central prerequisite for many digital services. But a lack of digital proofs is one of the biggest digitalization obstacles of our time. Decentralized identity management enables interoperable and secure digital identities and verifiable proofs for people, organizations and machines.
Verifiable digital proofs encapsulates blockchains’ function in the digital empire. Deutsche Telecom understands their role in securing the networks which hold the digital identities of the metaverse. Instead of just Amazon, Microsoft and Google hosting the vast majority of blockchain networks, Deutsche adds some of that coveted ‘decentralization’.
Money for the Digital Twins
Digital twinning is required for these systems to to give a non humans digital identities, accurately address financial value, build verification systems trusted by markets and governments, and to model the gathered data with AI and other systems.
Digitizing anything requires networks of unique addresses or identities, every sensor, every Internet-connected device. Giving a non-human digital ID really just means aggregating the various sensors, satellite-linked, embedded devices, into a consolidated digital twin. Each sensor, identifiable on its own, creates “verifiable” information about a target entity.
Ledgard and company frame the interspecies currency idea deceptively. They explain it as if the animal or forest is choosing to spend money on something. This is nonsense, of course, since it is humans, and the machines we design, who choose where the financial energy can be directed. The digital twin of the forest or giraffe does not choose, but rather our contrived representation of it does, with our rules programmed in.
Ecosystem Services, Natural Asset capital, and other phrases refer to initiatives intent on quantifying nature’s financial value. Ledgard, Celos, and institutional environmental movements’ fundamental argument for tokenizing natural assets asserts that the reason the economic system has destroyed the earth is because nature is not priced correctly. Mass satellite and IoT monitoring constantly integrates the data used to compute a financial value for trees, mycelium, and bees.
Pricing nature magically creates trillions in value previously unavailable to the capital markets, perpetuating the debt slavery monetary regime. The generated tokens or “interspecies money” will serve as a major type of financial collateral for the metaverse.
This point ties into the technologies used to price natural assets/ecosystem services and how that data is integrated into the blockchain or other secure interoperable databases. If you do not know who is who, and where is what, then the system would never take off. Creating secure identifiers that data can be associated with is the basis of any verification system.
As long as we have computers, and the internet they will be able to model data with AI and consciously reintegrate it with the system, which can be used to garner the support and trust of local communities.
Rejecting the system and its narratives outright could derail it. However, they do not require the trust of local communities; all they require is that local communities use these systems, so it does not matter whether it’s a relationship based on coercion, dependency, or genuine interest. The workings of international aid, UBI, and socially focused financial applications focus on targeting the displaced and impoverished, claiming to lift these people out of situations that industrialized society created.
Celo’s deep connections to powerful global institutions and people contextualizes the nature of their work. Celo has created three large consortiums, Alliance for Prosperity, Defi for the People and the Climate Collective, that pursue different facets of the cybernetic digital brain project. The next installment covers these organizations and their implications.
Notable People at Celo
Anca Bogdana Rusu, head of public relations for the Celo foundation, spent most of her career at The World Bank and International Finance Corporate (IFC), which is part of the World Bank Group. At the IFC, she was a core member of the Mastercard-ICF collaboration for financial inclusion, her work involved meeting with executives and government officials around the world to expand the reach of western financial institutions. She also is an executive chairman of the Global Impact FinTech forum.
Jai Ramaswamy, Chief legal officer for A16Z, is currently a board member at the Celo foundation and was the chief risk and compliance officer for clabs for two years. Ramaswamy worked for the Justice department as a prosecutor for seven years before moving to the private sector. He served as Global head of Compliance and AML at Bank of America for a year and Head of Risk Management at Capital One for three years.
Brynly Llyr has served as general counsel for cLabs since 2018. No stranger to the crypto universe, Llyr was Ripple’s top legal officer from 2016 to 2018. She began her legal career at Ebay then Paypal in senior legal roles.
Richard Parsons, a board member at the Celo foundation, was the board chair of the Rockefeller Foundation from 2016 to 2021. Parson was the son of the head housekeeper of the Rockefeller estate and ended up deeply embedded in the highest levels of business and politics. 23 years old and right out of law school, Parsons joined Nelson Rockefeller’s legal team when he was Governor of New York. In the mid 90s he was appointed president of Time Warner, and eventually took over as CEO from Gerlad Levin after a problematic merger with AOL. In 2009, right after the 2008 financial crisis, Parsons was appointed Chairman and CEO of the recently rescued Citigroup. He was serving as an economic advisor to Obama starting 2008. Involved in the Rockefeller philanthropy network, he also had connections to other New York players such as Rudy Giuliani and Michael Bloomberg.
Henock Teklu is the Global Head of Structured Credit and a Senior Portfolio Manager at BlackRock, focusing on insurance assets. He was the headline speaker at CELOs march 23 Barcelona conference.