Today I would like to present my concept for a Mutual Aid Society (MAS) on a blockchain. For lack of a better name for this concept I will refer to this system as MUXER. Muxer is a social network of giving you can count on when you need it the most.
When you join a MUXER society by helping to support their members you join a community of people who will have your back when you need it the most. It is through mutual sharing of life’s unexpected and undeserved burdens that members of a society gain peace of mind.
How it Works
- Commit to supporting others within a society
- Vote on which people qualify for help according to your societies policy
- Give your pre-committed funds to authorized requests for help
- Request help from the society when a qualifying event happens in your life
- Receive donations from the members of the society you have supported
Each month you publicly commit funds to be given to other members of your society. These funds are held in a Smart Contract that will only allow them to be given to other members of your society with net approval by a small minority (1%) of the society.
When a member experiences an unexpected burden they request help from their society. Members of the society will then vote to approve or reject the request. If the request is approved then individuals with pre-committed funds may choose to give to their cause. The more you give to a society, the more it will give back to you many times over.
A society can be organized around any concept where there are low probability, high cost risks to be mitigated. The benefit of joining a society is that you transform uncertainty into certainty by sharing the burden. Collectively a society can carry burdens that would be unbearable by any individual member. What follows are some examples of societies that could be formed:
The Samaritan Society is dedicated toward helping anyone in any situation that is unexpected and undeserved. Anything from an unexpected illness to being the victim of a crime can be covered by this community. Think of this as a way to earn good karma by helping others today that you can cash in if you are ever in need.
Human Rights Society
The Human Rights society will help anyone who suffers an unexpected violation of their natural rights as defined by the Bill of Rights within the Constitution of the United States or the Universal Declaration of Human Rights by the United Nations. These are the highest laws to which all governments and therefore all individuals are held by modern society. This society advocates upholding the law and sharing the burden of injustice suffered by its members anytime these laws are broken.
Copyright law is not something that is universally agreed upon. Many people support it in theory, but over half of the population casually ignores this . Each and every day hundreds of millions of people nullify copyright law by sharing information freely. An unfortunate few thousand individuals face civil and/or criminal trials. These trials can be costly and often result in out-of-court settlement. The purpose of this society is to help those who are unlucky enough to get singled out for prosecution. Given the ratio between those who are caught and/or punished and those who aren’t punished is 1:30,000, contributing as little as $1 per month to this society can give you the peace of mind of knowing you could have tens of thousands of dollars aid in the event you are unfairly singled out.
The Cannabis Society is dedicated toward helping the victims of war on drugs. Hundreds of thousands of individuals have been arrested and prosecuted for mere possession of cannabis. While many of these individuals need it for medical reasons, most of the people involved had their lives negatively impacted despite never harming anyone. This society is designed to support those who become the victim of this victimless crime. This society in particular only helps the those suffering because of possession or distribution of cannabis which is arguably less harmful than alcohol or cigarettes.
I may not like your society, but I will defend your right to have it. Each and every society is peaceful, non-violent, and serves as an opportunity to help your fellow man in an organized and dependable manner.
Building a system as potentially disruptive as MUXER requires using the most advanced peer to peer financial technology. This is why MUXER is powered by the BitShares blockchain. BitShares a decentralized community that has its own digital crypto-currency known as BTS. By using a decentralized currency members of any society can rest assured that no government can seize funds backing gift commitments.
When you join a MUXER society you are also joining the BitShares community which is dedicated to finding free market solutions to secure life, liberty, and property to all. As this community grows the value of its currency (BTS) also grows which magnifies the value of gift commitments.
While MUXER is currently promoting only four societies, the BitShares blockchain will enable anyone to start their own society to support whatever cause they desire. Each society has its own membership token that is awarded to individuals and is used to keep track of the maximum benefits each member may receive.
A member will pay BTS into their individual Gift Account for a given Society. Each Gift Account is publicly tied to a real world identity to prevent fraud. For every BTS transferred into the Gift Account the user will be awarded Karma in the society. This karma is non-transferrable, but gives the user voting rights on which requests for help may be supported. Over time karma decays with a half-life of 6 months.
When BTS is transferred into a Gift Account, 5% of the amount is kept as a fee to cover the costs of growing the society and funding the development of better software. The other 95% is put into their Gift Account and divided into two buckets: members-only, and charity. Funds in the members-only account may only be given to other members of the society with sufficient karma. Funds in the charity account may be given to any of the top 10 approved requests for help. Members of the society use karma-weighted approval voting on which charity causes qualify.
To gain viral growth MUXER comes with a built in referral program. This referral program is designed to allocate 2% of all donations to those who bring new contributors. Anyone may participate in the referral program after they have paid about $100 in fees ($2500 in donations).
Fee Backed Asset (FBA)
All sustainable systems need to make a profit in order to reinvest in growth of the system. Those who built MUXER created a tradable asset which will receive 4% of all donations. The owners of this asset may vote to divide this 4% among the referral program, a market buy back, or a reserve fund that may be used to fund further enhancements and improvements to the system.
When a user contributes to a society they earn Karma in that society. Karma is what qualifies a user to receive benefits from that society. Karma fades over time if a user does not maintain regular donations. The default half life for Karma is about 6 months. This means that giving a fixed amount every month will eventually result in a maximum Karma level around 10 times the monthly contribution.
If after 12 months of consistent contributions a member stops making contributions their Karma will gradually fall off, but will never quite hit 0.
Karma is also what gives members voting power over which requests for help are qualified and which ones are not. Members earn half their Karma at the time they contribute to their gift account and the other half of their Karma at the time they allocate their gift to an approved request. In this way members are encouraged to actively fulfill requests with their donations instead of letting them accumulate for ever.
The purpose of voting within a MAS is to hold members of the society accountable on what causes qualify for help. It is up to the individual voters to verify the facts of every case and determine whether or not there is attempt at fraud.
Voting is a task that not all members will want to participate in, therefore, members may proxy their voting power to someone they trust. The threshold for approving a particular request for help is a small minority, 1% of karma. It must merely be enough to minimize the probability of collusion. When combined with negative voting it allows a small minority to veto a request. The more controversial the request the more participation is required.
Every time a request for help is made it consumes Karma whether or not help is actually received. This prevents an attacker from overwhelming the system with requests. Furthermore, to file a request for help requires the individual making the request to put up about $100 worth of value. Attempting fraud should not be profitable.
After filing a request, no donations may be made toward that request until after a minimum waiting period during which votes may be cast. Because votes may be changed at any time, some people may choose to automatically vote against all requests until they have had an opportunity to review the request. In this way active members in the society can cooperate to ensure that only legitimate requests get approved.
While most contributions may only be allocated toward fellow contributors, up to 10% of every contribution may be allocated to one of the top 20 charitable requests by vote. In this way a society can have some outreach to people outside of its society and earn positive PR. Early on while the society is growing and there are relatively few claims, almost 100% of all actual help will go toward charity. It is through charitable help that a society can prove its effectiveness at helping others and gain new members. Word will quickly spread to anyone suffering from a qualified event that they should attempt to get help.
Making all society memberships public is bound to be controversial. The Blockchain has no direct means of enforcing this particular rule. Some societies may opt instead to allow registering a membership under a salted hash of an individual’s name. In this way the identity (salt + name) only needs to be revealed at the time a claim is filed. Identity is ultimately a necessary requirement to prevent fraud whereby multiple people share one membership.
It is my opinion that encouraging public membership in these societies is the best way to ensure that all such societies maintain and encourage the highest moral standards. No society should be attempted (or supported) that encourages harm to others.
Each individual member as a maximum benefit they may receive from the society that is proportional to their Karma. At any given point in time there is a ratio between karma receiving payouts and karma not receiving payouts. Generally speaking this ratio should be more than 10:1 or participating in the society does not make financial sense. The actual ratio can be calculated from real data derived from the voting habits of the society members and may change slowly over time. Through enforcing this ratio the society can guarantee a minimum level of fairness.
It would be unfair if some individuals received significantly more help relative to their contribution than others. Even though there is a maximum benefit, this is not a guaranteed payout. In addition to being approved via karma vote, all donations must be individually allocated and given. The society does not have the power to distribute other members contributions. This means that even if an event “qualifies” individuals with unallocated contributions may still opt not to fund a given request.
Ultimately all charity is peer to peer. Funds are not collected into one pot that gets distributed by voting. Voting is merely used to restrict the peer to peer payouts to qualifying causes that support the social contract of the society.
This post was a brief introduction into how a MAS could be implemented on a blockchain. In a future post I will go into details on how Cryptonomex and/or other companies can automate the process of converting recurring credit card payments into BTS being sent to a user’s society membership account. Once such a service can be setup it should create a steady stream of buying pressure on BitShares.