Rainbow Seeds! V1.0
Combining the best of local and global currencies for a regenerative economy

Rieki Cordon
SEEDS
Published in
17 min readNov 2, 2021

Creating local (bioregional, community, etc), topical (local food, regenerative health, etc), and organisational money backed by Seeds for bootstrapping globally regenerative economies.

To start, lets set the stage by quickly touching on the best parts of local and global money.

The best parts of a local currency

Keeps value local

Local communities prefer local currencies because they keep value local!

Builds community

They build connection, support, and trust between people in the local community, enhancing community spirit — very valuable where community has been breaking down.

Promotes resilience

They promote resilience in the local community, protecting communities against the destructive instability of the global markets and the conventional currency system.

Grows awareness

They encourage us to think more about our purchases and who the currency is benefitting so that we can make better economic choices.

Promotes creativity

They promote creativity and resourcefulness in the local community, utilising and developing our untapped skills, enthusiasm, and potential — even when austerity is called for in national and global economies.

Localised risks and rewards

Communities creating their own currency carry all the risks and capture all the rewards by themselves.

More flexibility for radical experimentation

Communities creating their own currency have much more freedom and flexibility to design their currency in radically new ways without needing to build consensus or agreement amongst other communities.

Community currencies provides space and flexibility for more radical experimentation in currency design to meet a cultural needs.

Image Credit Mark Scheer via Will Ruddick on Community Inclusion Currencies

The best parts of a global currency

Shared overhead

Creating new currencies requires enormous effort to build tools, spread awareness, create educational material, build liquidity/adoption, establish trust, etc. SEEDS has required the concerted effort of hundreds of people over 4+ years to get to where it is in 2021. Any new currency will take similar time and dedication to be effective and this effort is one of the primary reasons why local currencies are scarce or fail.

Global community building tools and utility

A global currency has a global community building tools and creating utility for the whole ecosystem. More tools and more utility bring in more builders, which creates a positive feedback loop providing more tools and utility.

More prolific, shared, and specialised education

Global currencies inherit a global community, which dramatically increases the quality and quantity of educational material. Global communities provides opportunity for specialised ambassadors to help merchants understand the new currency for a variety of specialised uses. Such as, ambassadors that work primarily with events and festivals and others that work primarily with food producers, etc. Local communities don’t have the diversity, opportunity or resources for this specialisation.

Network effects — more liquidity and more value

Currencies live and die by their network effects. Local currencies artificially constrain themselves to their local community, while the currencies they’re competing against (national or global currencies) can fully benefit from network effects that provide key benefits for a currency (like liquidity, utility, and trust). For this reason most local currencies remain a novelty while global currencies (like the USD and Bitcoin) gain more value and adoption.

Reduction in mandatory value drain

When someone wants to spend their value outside their local community they’ll exchange their local currency for another currency to do so. This constant sell pressure on community currencies ensures that local currencies remain complementary (opposed to primary) as long as people need to trade between communities. Global currencies have the capacity to meet the need for community-to-community exchange.

Amplify reversing global inequality

While local currencies are effective at isolating communities from the exploitation of global currencies (a potent step in the right direction), they aren’t able to reverse inequalities as they further isolate “poor communities” with “poor currencies” from “rich communities” with “rich currencies”.

Global currencies could reverse inequality through redistributing global surpluses more equitably in a way that is both beneficial to the “rich” and “poor” communities that comprise the global currency.

Required to address global challenges and coordinate across communities

A local currency is inept at solving global challenges like the great Pacific garbage patch, healing ocean dead zones, and regenerating whole ecosystems that aren’t “owned” by a particular community, or other global challenges that don’t fall under the domain of a specific “local community”.

Global challenges require global coordination that can be mediated, amplified, and organized with global currencies.

Rainbow Seeds — A rainbow bridge uniting the best of both designs

What if we could harness and cultivate all the benefits of a local currency (Rainbow Seeds) and combine them with all the benefits of a global currency (Seeds)?

Enter, Rainbow Seeds!

Rainbow Seeds are their own unique tokens/currencies that are backed 1 to 1 by Seeds.

This way anyone can create a unique token/currency (a “Rainbow Seed”) by using their staked or deferred Seeds (or “dSeeds”) and are able to give this new currency it’s own name.

This:

  1. provides a tool for local communities to make their own currencies/tokens;
  2. backs the value of each local token in Seeds to help bootstrap adoption and trust for this new currency, and to unite all our interests together;
  3. creates liquidity for locked Seeds (dSeeds) that communities in SEEDS are able to request the Citizens for via an “Alliance Proposal”.

One of the primary benefits of a local currency is that it doesn’t cost you anything to create it. This need and benefit can be met with each community requesting an “Alliance Share” (a distribution of dSeeds) from the Citizens of SEEDS to back their community currency with.

Of course, whether this proposal passes or not depends on what the Citizens want to support and will likely need to have a net-positive impact for people and planet to work.

Rainbow Seeds are backed 1 to 1 by Seeds and redeemable in Seeds when dSeeds are released (after Go-Live).

In this way communities who’ve earned or been awarded an alliances share can access immediate liquidity for their tokens (be able to start using them), without creating the potential for the community to sell those Seeds themselves (such as taking them to exchanges to sell for other tokens).

Example

If someone has earned or been awarded 100k dSeeds they would be able to “send” these dSeeds to somebody else by first creating their own “Rainbow Seed” (which can be called anything) and then sending those tokens to another account. The owner of the Rainbow Seed tokens would then have a claim (1 to 1) for your dSeeds and will be able to claim them after go-live when your dSeeds are converted into Seeds.

The beauty here is that “Rainbow Seeds” combines the best features of local currencies (currencies that are unique to a community) and global currencies (Seeds).

Backed by Seeds

All Rainbow Seeds are backed by Seeds!

That means all the Rainbow Seeds’ token holders and users benefit when Seeds increase in value. Because, this increases the value that backs each unique token. So, your Rainbow Seeds may start off backed by $0.10 in value (if Seeds are worth $0.10) — but if Seeds increase to $1 then your backing increases to $1 (thus increasing the value that backs every Rainbow Seed in every community that uses them).

Tying our success together creates incentives to collaborate and increase the overall well being and value of Seeds as a whole global community.

This means that all local communities have an incentive (and are rewarded) when another local community grows adoption and use of their own local currency — this provides that incentive:

  1. to collaborate across communities;
  2. help new communities use these tools and get started;
  3. and other incentives to collaborate and coordinate that aren’t present in local-only currencies.

Example:

A community, let’s call them Regenville, wants to support the adoption of local food within their community. This aligns with the SEEDS ethos and mission and they hear that they might be able earn an “Alliance Share’’ in SEEDS to support their noble cause.

So, what do they do?:

  1. They make a proposal to the Citizens of SEEDS and successfully win 50k dSeeds to support local food adoption in Regenville.
  2. Now that they have 50k dSeeds they can create their own community token called “Regen Local Food (RFL)” token (boring name, I know).
  3. This community now has 50k RLF tokens and only 50k of these tokens exist in the whole world! This means that the community gets to decide for themselves how they value these tokens, how to exchange them for other currencies, or any other economic considerations that they desire. Each community gets to design these unique traits for their unique token, and it can be whatever the local community agrees.
  4. As it happens this community has an investor who’s passionate about local food and wanting to support this project. She makes a commitment to buy up each RLF for $1 a piece. Communities don’t need 1 big investor, or even need to start with anyone agreeing to buy the tokens to get going, all they need is an agreement and trust to use the token to trade. Trust can be established with a commitment to buy the token, or it can be established through an agreement amongst members to accept it as payment.
  5. Because of this agreement, the community agrees that each RLF is worth $1 each and agrees to keep it “pegged” at that price (this could happen even if Seeds is only worth $0.50 each at the time). Communities can choose to value their token at anything they collectively agree to or just agree to value thir tokens at the exact same price as Seeds. The backing by Seeds just creates a “floor” for the globally agreed upon value.
  6. Regenville members then go about using their RLF tokens to award grants to local food producers and kickstart their local food economy.

An additional benefit of the RFL token is knowing that another community/cause wouldn’t be able to sell their unique Rainbow Seeds for the $50k that the investor provided, as that money is only for the USD <-> RFL pair and no other. Further, this provides a benefit to the SEEDS community as a whole because RFL tokens can’t be sold on exchanges for other tokens (and reducing the price of Seeds on exchanges). So, communities running experiments to build local and circular economies can’t sell their Seeds. So, communities can’t cause systemic harm AND they benefit from systemic success (a best of both worlds union).

In the above scenario, why does the investor/philanthropist buy tokens at $1 that are only backed by $0.50?

Many reasons, some could be:

  1. She’s more interested in supporting local food than maximising her profits;
  2. Or, she is interested with making a return and an impact, and believes Seeds will be worth more than $1 in the future;
  3. She wanted to support the community and local food with $50k in value. This was an easy way to do so while also supporting that community in transitioning into a new currency and economic system;
  4. She understands that her impact could be equal or greater than $50k without her actually having to spend this money. It could be that the promise to buy RFL for $1 was all that the community needed to accept it as a medium of exchange, and it could be that the community never actually sells all their RFL tokens to her for $1. So, she was able to bootstrap $50k worth of support for the Local Food Economy without actually having to spend the full $50k. This is one of the most significant impacts of introducing a the Rainbow Seeds currency; as those seeking impact are able to boost economic and impact for regenerative causes without having to spend the full amount they otherwise would have if they stayed in the legacy economic systems alone.

Rainbow Seeds and Seeds: Facilitating Regenerative Economies

Quick overview of the benefits of SEEDS and creating both local and global currencies in the same ecosystem.

No transaction fees: Stop continued exploitation and concentration of wealth

First and foremost, being free to transact Seeds and any Rainbow Seeds, are superior to the vast majority of currency alternatives that charge transaction fees.

Transaction fees on local currencies create friction for adoption (as cash is free).

Transaction fees on global currencies extract value from the communities using the currency and concentrates that value to whomever is receiving these fees (often the already wealthy). A global currency with even a “miniscule” $0.05 fee per transaction would significantly drain value from the poorest communities on our planet, who are also the ones most desperate for better money, where $0.05 on every transaction isn’t “miniscule” but rather significant. It’s critical that global currencies don’t have transaction fees that would perpetuate the exploitation of poor communities (as fees set globally are always relative and have a relatively greater impact on the poor) and concentration of wealth.

Shared tools

Any tool that is built for the global SEEDS community can be enjoyed by every local community that creates their own “Rainbow Seed”. This means local communities can use these new tools: wallets, decentralised exchanges, decentralised organisation and governance tools, etc. when sharing the same protocol and don’t have to create these tools themselves.

Shared story

The movement, the storytelling, the successes of communities who’ve bootstrapped their circular and regenerative economies, are all additional fuel to help serve our global movement and the transition we need to take as a whole species and planet. Working together, as communities across the globe, is our challenge and opportunity.

Shared underlying value accrual and liquidity

The global network of local communities all growing adoption of their own Rainbow Seeds and Seeds directly are all sharing in the combined increase in adoption of our common tools and network, which in turn will increase the value of Seeds, which will increase the value backing all Rainbow Seeds, which will encourage more adoption and create a beneficial positive feedback loop for the whole ecosystem.

A voluntary and optional bridge from local to glocal

This also gives us an optional bridge for communities. Communities get to choose if they want to convert their Rainbow Seeds back into Seeds after go-live when those dSeeds are issued out and the SEEDS economy matures into a global economic system. Or, they can continue to use their unique Rainbow Seeds unique to their local community, the choice is theirs.

A global support network for local communities

As a global currency that benefits from global adoption, the global SEEDS community can sustainably provide resources for helping new local communities learn about and adopt SEEDS (and is incentivized/rewarded for doing so). This isn’t the case with local-only currencies that require each local community to learn about, champion, and find their own methods to get support to create their own isolated currency.

Rewarding local exchanges

In the SEEDS economy local exchanges are given greater reward (provides a multiplier for their contribution scores!) to those exchanging. This means that even if local communities bridge their Rainbow Seeds back into Seeds there is still an incentive to buy local and keep value flowing in the local community. This economic design is to encourage more local interaction and to reward local circular economies by providing appropriate incentives for doing so.

Reversing inequality *before* Go-Live

If Seeds increase in value with global adoption, then the value backing each Rainbow Seed increases as well. This value increase is the same for every community using Rainbow Seeds. So, communities in the poorest parts of our globe will see a relatively greater impact with this value appreciation as a $0.10 increase in value could have a life-changing impact in some of the poorest communities while having only a minor impact in wealthier communities.

Having local communities backed by a shared global currency gives us the medium and tool to reduce global inequality without having to “steal from the rich to give to the poor”.

Reversing inequality *after* Go-Live

The SEEDS Global economy will continue to systemically reduce inequality after go-live through the Harvest mechanisms (you can learn more by exploring the SEEDS Guide or this video).

By using SEEDS, local communities earn more Seeds from the Harvest for their community (a direct reversal of the exploitation that money has so far facilitated.

This brings more value into the local community, opposed to extracting value (such as fees and inflation), all the while local communities continue to improve their community governance processes in governing how to spend this new money together to finance regeneration.

A global currency for solving global challenges

Before “Go Live” the Citizens of SEEDS can vote to give Alliance Shares to projects aimed at solving global challenges (reforestation, pollution clean up, education, etc.) and the whole economy benefits if SEEDS gains more awareness, utility, new members, etc. This has already been happening for the last 2+ years of SEEDS life.

After go-live the Harvest fuels a global treasury that the Citizens govern to continue to fund globally regenerative projects (none of this is practical with a local-only currency).

Exploring More Use Cases

“I want to support regenerative currencies and Seeds — but only for my local community. Can I provide money to buy Seeds, but only for my region?”

“I want to provide support for a particular cause, say local food adoption, and I want to buy Seeds only for that cause. Can I provide N$ in liquidity to buy Seeds, but only for that cause?”

“Our community wants to adopt a local currency! We love what SEEDS is about, but don’t quite feel comfortable with the idea of a global currency. Is there a way to get all the benefits of creating a regenerative global economy and currency (such as tools and network effects), with all the benefits of a local currency (keeping money and value circulating locally)?”

“We want to experiment with new types of economies and currencies, but we don’t want to endanger the entire SEEDS economy in running our own experiments as they’re pretty radical. Is there a way to run a new currency experiment without causing any systemic risks to the SEEDS economy?”

With Rainbow Seeds — the answer to all the above is YES!

Focused support and liquidity

There’s been a lot of desire for financiers to fund local and regenerative economy pilots in specific communities, yet so far in SEEDS this hasn’t been possible. That’s because Seeds aren’t local — they’re global. So, it hasn’t been possible for a funder to provide liquidity for a single region.

With Rainbow Seeds a community can acquire Seeds or dSeeds and use them to back their own local currency.

Those who want to fund a particular community can then provide liquidity for community’s token directly (opposed to providing liquidity for all Seeds).

Example

A wealthy benefactor wants to run a UBI experiment in their community. They want to provide $10 Million to a single community as liquidity to guarantee that they will buy that specific community’s local currency.

This guarantee will quickly provide the trust needed for local businesses to accept this new token, knowing that they can always convert it to central bank money should they choose without worrying that another community will “cash out” their tokens using that $10 Million.

This will mean that each Rainbow Seed will have its own exchanges, liquidity, price, community, etc…

It’s possible that a local currency would trade for more (or less) than the price of Seeds. Just as there are current crypto experiments being run that trade at a 600x++ premium to the value that’s backing them (for example, OHM is a “backed currency” that trades for 600x+ more than the value backing the token!).

If communities require a stable token to start trading today they could agree to:

  1. Value their token at $1;
  2. Better, value their token to be anti-inflationary (increasing in value at the same rate their central bank money decreases in value);
  3. or anything else a community wants to agree to do.

Then this community could immediately create a stable currency, or an anti-inflationary currency to start using today (and not wait for Seeds to mature to meet this need).

Removing ecosystem risks of experimentation

If we use Seeds to experiment with various pilots, if those pilots go south this risk is carried by the entire SEEDS community and there is no way to contain risks of individual experiments.

Example

Let’s say we run a pilot to give 1 million Seeds to a community for them to kickstart a circular and regenerative economy pilot. We release these Seeds to the community leader and instead of giving them out to 1000’s of people to start trading locally, they decide instead to sell them on the open market and abscond with the money. The potential for this risk causes the SEEDS community to be less willing and trusting to run such pilots and require a great deal of trust-building up front.

Enter Rainbow Seeds!

With Rainbow Seeds we can instead give that community 1 million dSeeds (Seeds that are in an escrow account that can’t be sold on the market) to use as collateral to create 1 million “Circular Economy Credits” (Or, likely a more meaningful name for the community). These “Circular Economy Credits” can’t be sold on the open market until that community establishes an exchange and market for these tokens locally.

This is important, because now that community can create unique liquidity pools where people can invest directly into that Circular Economy pilot by only buying “Circular Economy Credits” opposed to any of the other tokens that communities are creating. If that pilot fails to follow through with the agreement they made with the Citizens of SEEDS, then the Citizens can reverse the Alliance Share Agreement (as is the case with any standing Alliance Share) and recover the dSeeds that are in escrow. In this way, Citizens can be much more open, trusting and willing to have communities run experiments knowing that it cannot harm SEEDS as a whole (or the value of the Seeds currency) should that experiment fail or the leaders choose to not follow through with their agreements.

This maintains sound economics for Seeds; while giving us more freedom to run experiments and liquidity for communities today!

Not just for communities and alliances

Rainbow Seeds can be used for local currencies or new types of global currencies that are designed for a specific purpose. Say a foundation wants to provide $77 Million towards funding Local Food Economies — they want to leverage the community and technology that SEEDS has provided. But, they don’t want to provide that $77m in liquidity for all of SEEDS, they want it to be specifically used for those participating in the Local Food Economy programs across the globe.

So, they can buy $77m in Seeds and use them to create their own “Local Food” token that they use specifically for funding local food programs. Or, since this project is particularly regenerative and helping create a regenerative civilization they could petition the Citizens of Seeds for a 77m dSeeds Alliance to support Local Food Economies. Then they could use their $77m to provide liquidity (guaranteed to buy back) each “Local Food” token for $1 each.

This gives us the ability for funders and organisations to target their impact and isolate their experiments all while leveraging the technology and community of SEEDS and providing value to the whole ecosystem and helping us all create the Regenerative Economies we so desperately need.

Or, just for fun, anyone with dSeeds (or who stakes Seeds) can mint a new token. You can create your very own currency backed by Seeds! Call it whatever you’d like and share it with your friends and family as “your” token!

Reintegration — Merging Rainbow Seeds back with Seeds

How do we bring this all back together?

If or once the value of Seeds is greater than the value of a particular Rainbow Seed. For example, say your “Constant” Rainbow Seed is holding at ~$1.00–$1.07. If Seeds becomes worth $1.10 then there is incentive to convert them back into Seeds and gain the difference in value.

In this way as Seeds increases in value (and if the deferred Seeds backing a Rainbow Seed are released) gradually Rainbow Seeds will be converted back into Seeds and unify our economy (for those who wish to). The other reason folks may convert their Rainbow Seeds back into Seeds is benefit from the Harvest protocols (as only Seeds are tracked for Contribution Scores).

Since every “Rainbow Seed” is backed by Seeds, they are also limited by the number of Seeds in existence. So, an increase in demand for all new Rainbow Seeds also drives demand for Seeds. This way the ecosystem of a diversity of Rainbow Seeds gradually reintegrates into 1 as our economy matures.

Join the conversation in the Community Chat (Discord) or Forum (Discourse).

The technical details:

  1. If someone has issued Rainbow Seeds their first dSeeds released will move to the stake/mint contract for their Rainbow Seeds to be held as collateral for their Rainbow Seeds (for holders of their Rainbow Seeds to redeme for these Seeds).
  2. These Seeds can then be redeemed by sending a “Rainbow Seed” back to that contract (and you will get 1 to 1 Seeds for each Rainbow Seed).
  3. The contract will only allow an account to mint new tokens equal to the number of dSeeds and Staked Seeds of that account.

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Rieki Cordon
SEEDS
Editor for

Decentralizing Abundance! Map Maker at Hypha for SEEDS