home of the IOU economy
Sikoba is a decentralised platform based on peer-to-peer IOUs and built on blockchain technology.
Participants who know and trust each other in real life grant each other credit lines in the Sikoba system. They can then pay each other using IOUs which can be cleared; tallied and offset on a rapid and ongoing basis.
These peer-to-peer credit relationships are governed by contracts with specific conditions, fee structures and repayment rules.
Sikoba then allows credit conversion, a system in which payments between participants who do not know or trust each other become possible, by automatically finding trusted intermediaries.
Maria and Abi are business owners in the same community. By granting each other credit lines and using IOUs, they can reduce the amount of cash they need to transact with each other.
Lee is a well known and member of the community. Tara has just started her business. Although they do not trust each other equally, they can both use Sikoba IOUs to reduce their dependency on money.
Credit Conversion allows Sikoba users who do not know or trust each other transact using IOUs through trusted intermediaries. Sikoba’s basic and most important rule is that a user will only ever have credit exposure to those they have expressly chosen to trust.
Clearing — the same tallying and offsetting of debts and credits that was historically done at village fairs and trade fairs — but on a more rapid and ongoing basis. The result is that money is only needed to repay residual balances rather than the full financial value of all trade.
Use Cases
Alternatives for
Micro-Credits
Micro-credits carry very high interest rates, sometimes over 50% annualised. They are also difficult to obtain, especially in areas where the next bank is far away. Bank money will always be needed for some purchases, such as specialised equipment. However, when artisans and merchants start using their own credit on the Sikoba platform for local trade, their reliance on micro-credits may decrease significantly.
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Jump-Starting Local Economies for the World’s Unbanked
In some situations, the poverty is such that even the access to micro-credit is very limited. Here, a system such as Sikoba can help to jump-start local economies. Once people realise that bank money is not absolutely necessary, and have a tool for precisely keeping track of mutual credits and debits, even primitive economics may get a boost.
Inter-Company Credit
System
Groups of companies that do business with each other on a regular basis, for example because they are located in the same geographical region, will profit from setting up interco credit systems.
Instead of systematically paying each other's invoices, they register invoices in the system and only pay residual balances after periodic clearing. As a result, less bank credit is needed.
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Local Currencies
Setting up local currencies is a natural use case for Sikoba. We aim for an easy set-up that will make it possible to start a local currency even for very small communities. Local currencies using Sikoba will become easily exchangeable with other local currencies. Also, such currencies can be tied to local cost of living indices.
Crisis Money
When a financial crisis hits, local and even central governments may find a need to quickly issue new monetary instruments. Sikoba aims to provide more flexibility than the banking system, while being linked to state-of-the art KYC systems.
Timeline
Manas.Tech
Becomes Sikoba's Technology Partner
Oct 2018
Sikoba App
Development Begins
Nov 2018
Fantom Foundation Supports Sikoba
Oct 2018
Sikoba Research Sàrl Created
Oct 2018
Sikoba App
Internal Release
Mar 2019
MVP Development in Progress...
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