Build with Circles - Social trust Based Currency I Sandipan Kundu & Maksym Fedorenko

Hey, my name is Max and I'm going to present you the circles project so you can build with us during the is global hackathon in Buenosaurus and uh I'm going to tell you more about the project itself the bounties which we have uh so you get inspiration and maybe some ideas of what's possible to be Also, there's going to be an introduction into the tooling around circles, some helpers and examples so you get more comfortable implementing your ideas. And uh let's start with a simple one. What's circles? And circles is a an extremely ambitious project um to innovate and create a better money for our multipolar world and there are few properties and built-in circles. So it's completely uh independent token from others.

It doesn't rely on any third party monitor policies uh of any currencies and everyone has a universal access to it. Technically, it's a smart contract on agnosis chain. So, it's permissionlessly accessible and uh anyone can go and execute transactions to create a circles account, make transfers whatsoever. Moreover like there are few toconomic mechanics implemented in circles uh which democratize in issuance and at the same time provides the fair access across time. So every users every user within the system creates circles at at a fixed rate of one circles per hour.

I create uh one max circles per hour. My friend Bob create one circles per hour and uh these circles are different. So max circles is a separate type of token from the bop circles. These are two independent tokens. And that would be unfair if those who joined earlier would get way more circles would accumulate way more circles over time uh compared to those who didn't join.

And uh to equalize and to smooth this effect there's an introduced uh rate of a 7% at which all balances all circles balances um u decreased annually. So what this brings is effectively over decades we might say that the all the circles balances converge to the amount of approximately 1,20 circles. This slowly smoothes the inequality in circles balances but it happens really slow. So in some way it incentivize people to spend circles and at the same time it happens slow. So circles does not lose the money values.

Moreover, circles does not rely on any third party identity system. There's no government ID required or any biometrical data to join circles. But we should somehow filter symbols and fakes because it's built for humans primarily. So it's built the civil resistance mechanism built uh with a so-called web of trust. Everyone might u declare that they trust others and trust in others means that they agree to accept their circles at a rate of one to one.

This gives a clear economic reason why you shouldn't trust those you don't know and you shouldn't trust those who are not legit humans. because this undermines value of your own tokens you create. So you should be extremely picky and selective about the your peers and friends you trust. And in this way what does mean in the end you only get circles you trust and uh no one might uh transfer you someone's circles with like in exchange of yours without your will. But there's still a nice uh property of transitivity.

So even if you do not have a direct trust connection towards someone, you might still transfer some circles along through the trust graph over few hopes. So in the example you see on the slide that Dave doesn't have a trust connection to the pop, but he can somehow push his circles to the pillars who trust him which is Carol. And um Carol would transfer five circles of her own to Ellis and Ellis would transfer five Ellis circles to Bob. In this way, Dave managed to transfer some circles to Bob and Bob got only circles he trusts. In this way like it wouldn't make any sense if Carol would trust some fake account because then fake account would would be able to make a transfers towards her friends uh with with her circles and Carol would end up in this situation when no one affected other than her and Carol would accumulate some fake circles.

Let's say uh there is a nice front end which is a met app which is agnostic app and uh you can create your circles you can um explore your trust connections. There's also a so-called concept of groups as you might see that the circles might suffer from somewhat of a liquidity issue and uh to make it compatible with existing like web three infrastructure and uh enable even more flexibility within the protocol there is so-called concept of groups. So groups you might see it as a huge board where everyone puts the their own circles if they members of this group like eligible members of this group and mint the group token one to one. For example, I gathered with 10 of my friends. We created some community and we put some of our circles u as a collateral and minted onetoone group circles.

Then we might go to some um decentralized exchange and create a liquidity pair so to make them tradable and even more liquid. Yeah. So this gives way more liquidity towards circles and uh it highly depends on the group and the size of the group. Moreover, within within the groups, there are lots of flexibility uh to specify who should be the member of the group, what are the conditions and this is fully programmable on chain. So you might only accept those who has certain page or NFT or yeah has satisfies some other complex conditions.

Moreover, you can specify the mint policy. Who can mint your group tokens? Who can redeem your group tokens? There is lots of flexibility out there. And this was a brief overview of what circles protocol itself.

Um yeah, you're welcome to ask more questions like in Telegram chat or like on site. And uh what are the tracks? There are two tracks. building a P2P loan market and build a X 402 circles checkout experience and let's start with a lawn market. There's clearly an issue that some people lack access to high quality credit due to different reasons like they might simply doesn't know how to do all this paperwork.

They might like social status. There might be only few social sorry credit institutions and uh they might not be well established and if they really need some credit it might be socially awkward weird to ask their peers their friends family and uh there is no standardized procedure for this. It's it involves lots of coordination and negotiation and the only fallback option for such people are the loan sharks who provide an easy access uh to their loans but under a terrible conditions with a high interest or just generally really terrible conditions. And we believe that this is where circles might help to build a peer-to-peer uh system to provide loans because circles itself withhold lots of valuable informations about the trust connections you have. Moreover, there is this property of soft civil resistant resistance that that we assume if you have a nice connectivity with someone trust connectivity then uh the someone is a real human and we might make lots of assumptions uh based on the their balances, their circles balances, their circles maximum transferable flows and There's a huge potential to play around with [snorts] circles by utilizing its trust relationship between the peers and uh moreover by utilizing the circle token itself as a collateral uh or the currency for the interest repayments or the down payments.

And uh we generally want want to encourage creativity in this direction. Now let's go through couple of examples. U yeah we might imagine with circles. This is these are just a general ideas which might spark some interest or yeah inspiration of what's possible to be done. For example, there is we might imagine a system where people like some of circles users agrees to give out the to lend some cash to their peers only one hope away.

I mean uh only those they trust directly at a certain interest rate uh denominated uh nominated in circles. In this way you give an interest free access to the loan to your peers until the interest does not exceed 24 circles a day. This property comes from the fact that the issuance of a circles is only 24 circles a day. And for example uh if Bob trusts Ellis, Bob accepts Ellis tokens, Ellis circles and Ellis creates circles at a rate of 24 a day. If Charlie as well trusts Ellis, Charlie and Bob both accept Ellis circles.

So Ellis might u create some kind of compound loan and uh it it will be basically an interest free from if she does not exceed some if she does not exceed 24 circles a day and this is a nice mechanic u for the beers. So you're fine to give some loan like interest free until this exceeds some limit and circles brings a natural gap towards it. Moreover, there's another example which allows to utilize transitivity. For example, Ellis is trusted by Bob and Daniel and Bob and Daniel trusted by Charlie. And Ellis actually wanna take a loan from Charlie and she might transfer to Charlie only 1,000 CRC despite having 1,500 because Bob and Daniel has um together 1,000 CRC trusted by Charlie.

So this kind of creates a natural limit and uh also the max transferable amount from one user to another might uh indicate the trustworthiness of a person. And we might imagine the situation when Charlie gives out a loan to Ellis by taking 1,000 CC as a collateral. So Ellis would end up having some cash from Charlie and uh 500 Ellis CRC on a balance. Bob would have 700 Ellis CRC on his balance and Bob CRC would end up on Charlie's balance as a collateral. In this way, uh, Charlie accumulated Bob's Daniel's CRC and if Ellis would not repay the loan, Charlie would withhold this amount.

Effectively, this would also affect everyone along the path and all the peers of Daniel and Bob because you cannot do it second time. Charlie simply does not trust Ellis tokens and Bob and Daniel ended up with no tokens trusted by Charlie. So this mechanic incentivize people to be even more selective towards their peers. And uh also this uh within this example we utilize the natural u property of circles of um the maximum flow as a metric. uh to evaluate the trustworthiness of a person and there is clearly a punishment for everyone along the path uh if the person uh ended up being uh not trustworthy which creates a nice chain of incentives.

Yeah. And uh the the the second example and the second track uh we propose is a X 402 checkout experience and uh there are also some properties which you already know is a civil resistance and some universal basic income property and uh the first one means that most probably the well-connected person on account on circle circles with a nice trust connections is unlikely to be a bot. And the second means that everyone is 24 circles a day. uh and um these are two nice properties for APIs out there because if we think even today we have a access to lots of APIs unconditionally but there's actually some hidden limits like which limit our access by the amount of requests we might do or like from one IP address. Uh yeah, so this would be really beneficial for APIs to filter out the BS even like if there's um and at the same time do not make an overkill but by requiring everyone to pass the KYC to proceed and access API.

So in the cases when the soft civil resistance is enough and we want to kind of give the basic access for free but um and maybe later to charge uh uh for the extra access the circles is a good fit. For example, we might imagine having a group uh token to access some LLM model and every client might actually access this group and mint only 24 circles a day. Yeah, this would and if they exceed this limit, they would be able to buy even more circles by those who does not utilize this API on the market. This is an interesting mechanic. Yeah, we want to see experiments with and 4 X 42 is a nice standard.

It's actually really general one. Uh so if there's some API endpoint, we might make a get request and uh see that error code that the payment is provided with some conditions and um in response we send the pay payment payload. uh we assume that yeah there's many levels of complexity we can achieve but uh the general idea is to implement the facilitator in a way that it verifies circles transactions because currently there's a clear limitation of the uh current implementation the standard which only allows transferring certain types of tokens which are effectively ERC um 20 tokens um with some of gasless transfers extension and u we believe that um it would be nice to utilize uh first to create a fallback uh uh sorry facilitator which uh works on agnosis chain. So submits transaction. So agnosis chain uh moreover accept the transactions u which are signed safe transactions and as the next step accepts uh circles transactions because uh within the systems u like we encourage people to register circles to use safe to register circles accounts.

So I would formulate that there's three steps and the deeper you get the better it is. First to build agnosis chain facilitator for the X402 standard. The second one is to build a safe transaction facilitator for this standard. So uh yeah you can submit the payload of assigned transaction. And the third one is uh to enable circles transitive transfers or at least enable u circle wrapped circles ERC20 transfers or maybe circles 1155 transfers.

Yeah, that's it for the tracks and uh now there's going to be an overview of circles tooling. But my name is Sundep Kundu and today I'm going to cover a bit of technical resources which you can use to build on circles. Uh first of all uh you can check out the website. Um you can definitely read out the white paper but if you don't have time I will recommend you to at least watch this 2-minute video of what circles is. This will give you a brief idea of what the protocol does and its key features and that's pretty much it regarding the website.

Now coming to the actual technical documentation aspect of it. Uh you can check out circle stock. So dogs thought about circles.com. This is where you will find all the details which you will need uh while building on the circles track.

So first of all a little bit of overview of how you can build on circles. So the main key resource is the circle typescript SDK and that is probably the most important resource which you will use uh to build on the tracks. Uh here we can go to the circles SDK overview tab and you can see you can install this npm package. This npm package has a couple of dependency package smaller dependency packages which give you various purposes uh different purposes to handle on circles protocol. One important aspect of it is in circles uh there are different kinds of avatars.

So if you go here you can see that there are three kinds of avatars. The personal human avatars, group avatars, organization avatars. U for this hackathon human avatars is going to be the most important one for you while building and maybe a little bit of organization avatars based upon your implementation of the X402 track. But uh yeah so this is going to be the most important avatar for you human avatars. So for human avatars are basically meant for individual humans you and me and you I will recommend you all to create a circles human profile first before jumping into the track to get a bit of understanding and also create your own circles profile.

So you can go to this application.aboutcircles.com to create and sign up for a circles human account. Please do note that you need to be invited by an existing circles member. So you can just share uh your wallet address uh in the chat uh in the discord e global discord chat and we will be happy to send you an invite.

So once you are invited you can sign up you can start minting your own personal CRC tokens. I will definitely recommend all of you to do this step first before jumping into the technical part and into SDK part. Now coming back to the concept of building with circles. So yeah, as I was talking about like uh building with the SDK, you will find very a very good resource called quick start guide for circles SDK. This page is basically should be all what you will need to get started, get set up with the circles SDK in your application and access the lower level functionalities.

So you can follow the step by step, get a bit of an idea of how you can configure different parts of it. For example, you need to choose kind of a library. In this example, we are using VM. So, you can also use ethers and all. Uh, and then you can also it will also give you steps of initializing the circles SDK and then the various functionalities.

Regarding the functionalities, you can go to based upon which kind of avatar you're working with, you can based upon their individual um functionalities. So for example in this case this is the flow of how you can accept and sign up using the SDK. This is the flow on how you can first check how much mintable amount is present for that particular account and then mint those tokens. So for different functionalities you will find different pages and define function names. The function names are very like uh similar to the kind of action you're trying to do.

For example for trust actions you can do avatar.trust trust do add and for removing a dot. So very simple kind of actions and you can just need you can just um send those transaction maybe through a safe wrapper or directly on chain based upon how you're managing it. Um but yeah that's pretty much it regarding the SDK. This is going to be the most important aspect of it.

The other important aspect you may or may not choose to use is the circles API. This is something which all the functionalities here you can also cover through the SDK itself. But yeah, if you wanted direct API access and you want to use the RPC uh directly, you can do that too. So that is also an option for you. But yeah, I would recommend everyone to just go with the SDK uh flow.

Uh it's much more easier and it's also going to be much more user friendly. So that should be easy too. So that's pretty much it. Like these are all the important resources which you will probably need for the hackathon. Uh if you want you can also go check out the GitHub repos of the SDK if you want a deeper level functionality check.

But you should also use the search functionality here first to see what kind of different functionalities you can use. So yeah, that's pretty much it. Uh wish you all the best. Bye-bye.