How Do Trustcoins Work?
In the initial rollout of the WeTrust platform, the Trusted Lending Circles that are created will only support contributions and withdrawals in Ether. WeTrust will add platform support for other cryptocurrencies soon, including our own token, the Trustcoin (TRST). In addition, anyone who participates in a Trusted Lending Circle on the WeTrust platform will contribute fees in the form of Trustcoin.
Each WeTrust Trusted Lending Circle is organized by a foreperson, who specifies the parameters of the Trusted Lending Circle that is agreed upon by the group. The foreperson helps ensure timely participation among members, and the role varies from facilitator to enforcer, depending on the region and culture. of a term, and this role actually varies by region. facilitator in some, enforcer in others., and is held responsible if any member of the Trusted Lending Circle forfeits on their dues. To compensate for the responsibility the foreperson takes in organizing the Trusted Lending Circle, the group decides on an agreeable fee where a percentage of the total pot is set aside and paid to the foreperson each round. In return, the foreperson recruits trusted friends and family to the Trusted Lending Circle, and if those friends and family are later unable to supply the funds to meet their Trusted Lending Circle obligations, the foreperson must either supply the funds or suffer lost reputation (trust) among the other members of the Trusted Lending Circle. The fee paid to the foreperson is a way to compensate them for this risk that he or she undertakes. That being said, in most Trusted Lending Circles, the participants always pay on time, because they know that both their reputation to the group and the reputation of the foreperson is at stake.
In addition to the fees paid to the foreperson, a low fee is paid to WeTrust to support continuing development efforts. This fee is initially set at 0.3%, but will decrease in a pre-set way as the volume of transactions on the WeTrust network increases (a greater number of transactions allows us to continue operations with a lower fee). These fees are shown in the diagram below as applied to a typical Trusted Lending Circle implemented on our current prototype MVP product. Eventually, the Trusted Lending Circle contribution and payout can be in any cryptocurrency, such as Ethereum, Bitcoin, various stablecoins, and our very own Trustcoin (TRST).
Eventually, as WeTrust expands beyond Trusted Lending Circle products, the Trustcoins will find use in additional products we create, such as credit scores and insurance.
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