Aratu: What Happens When a 20-Year-Old Social Currency Moves On-Chain

Transcript

[music] >> Hello. I'm so happy with all my friends here and especially my Brazilian friends. So, let's talk about something that happens in our country as well and share this around the world. Um so, first of all, I have some parts to be sure that we are talking about the same thing. What's a community currency? So, this is a form of money created and used with a specific local area or a group. And not like the the official like money from the government or for the country itself.

Uh but it's usually pegged one by one with the national currency, but do not replace the currency itself. And like what is the goal of a community currency? Is to foster a community. Is to serve like a a social economy of the local goals. And like it normally is when the national system doesn't work well for this one. Uh so, the people can earn or can buy the currency itself. They can expend it it only participating local business or with other members.

This money keeps circulating instead of flowing out of distant corporation or financial centers. My first I have a one example that is not from the Aratu itself, but [snorts] this is like a a big example. Imagine that you work in a large high-end commercial center outside in downtown, but you live far away where the rent is cheaper. It's like a a neighborhood or a small city.

>> [snorts] >> Uh this place is like in Brazil they call it like a bedroom community or a dormitory town. Uh but um imagine this. Like let's go to the other side. Imagine a big supermarket and then he can sell things like cheaper than others because he can buy these things cheaper as well because he buy huge amount of that. But how is the supermarket that exist in that local dormitory, in that local city?

>> [snorts] >> He maybe cannot um sell things so cheaper because the cost is different. But if the people who um buy things is start to buy in their own community, they are fostering this community. It means that even that the local market can buy things in a huge amount as well and can sell this kind of things cheaper as well. So with we are fostering the local community and having the money be inside the community and not going outside to the big cities, you are making this community be bigger and

healthy as well. And this is uh the concept of the the currency commons as well. And how this is working, we are talking about built in a low-income neighborhood economy and keeps is pending circulating uh in this local community. Okay? And this is tied to the local identity as well and the make your own place better for you and your kids and everyone that is around. Okay?

>> [snorts] >> Talking about this in Brazil, this is started in 2022 with Banco Palmas when they issued the the currency called Palmas and this was issued by a institution called Edineiro and now they have more than 108 kind of local currency circulating around Brazil in different communities, different states, different cities, different neighbors, okay? Some of them has a bit of like a government money as well like the money is going to the to the people through the community,

through the local currency to be sure that that money is like I said before is spending that local place, okay? And I comment about this so this is if you'd like to check it out later the Edineiro is the platform who is issuing and like administering these local currencies as well. And they have it's a system outside of blockchain but a system that they had the app, the internet banking and the card and including this is an opportunity for a lot of people that they cannot access a bank like the bank

doesn't open an account to them but they can have it this using this kind of platform as well. And like I said before talking about money they with the social currencies in Brazil we have like 5 billion of Brazilian reals circulating in this kind of local currency and this can be like 1 billion of dollars to have an amount an idea [snorts] how this is powerful.

And with this we can have a the financial inclusion in the periphery in the is most cities and also this platform offer the microcredit or transfer or even uh uh salary deposits uh for the people over there as well. Like I said before, commercial banks often and cannot do that to these kind of people, okay? And this is when the money circulates with the community, the opportunities will grow along it inside the community, okay?

And let's talk about the first uh currency community currency that came in on chain, the Aratu. So, this was uh for a community called Marisqueiras. So, what is this? Uh Marisqueiras are women uh that live in coastal and the riverside community in Brazil Northwest. And they harvest the shellfish uh like a clams, oyster, and others by hand uh in mangroves and tidal flats. And this is a kind of living and a work that is going to the generations, okay? And

uh with this uh we can say that this economy rests on this Marisqueiras for that community. And the local chain, the Aratu, it was launched in in the Aratu, Sergipe. Where does this happen, this city? It's like a town with 18,000 people. It's a a small town. And the currency itself is running on the Hedera blockchain Brazil or the Brazilian blockchain network. This is an EVM network. And this network is the ledger of the Hedera account. It's not the interface for the users, not yet.

So, the users keep using the same app that we comment before from a Dinheiro. But uh behind that, we have the blockchain running. So, for the user, uh they use the same app, the same login, same balance, QR codes, and the blockchain moves behind this. And by the way, in Brazil, we have a way to pay things and to use money called Pix to transfer the money money from one one person to another person, and maybe I'm not going directly to a big bank. And even the e-dinheiro and the platform is doing that for the people as

well. So, talking about the R2 on chain, the this is structured absorb the gas and all the jargon. So, so the users, they don't know exactly what's blockchain. They don't need to know about that. It's like the way that we should have a blockchain being the infrastructure behind everything, but we don't need to have every user to know what is this. We must know that this is safer, this is more secured, more transparent, and we can audit that.

Uh so, the platform and because the RBB is a permissioned network based on Ethereum, but it's a permissioned network, the fees are not an issue. Like the user don't know about fees, not really nothing. The platform pays and in this case, don't pay because we don't have fee, but it's abstract any cost of this. And another point is like the user never see a pending confirmation, uh hashes, or gas. [snorts] For the user, it's totally transparent.

Okay? And what's the benefit of this? So, why we have this? Imagine that we'd like to be sure that that money is not going out of that small city, and we'd we'd like to be sure that it will be really fostering the people and the helping the people in sight. And we can have it a transaction hash for the auditors. And we have it this transparency, the auditability, even for the municipality and for the funders of this.

And again, for the users, the message is simply like it is, it's the same app, not with and now we have it more trust. And let's talk about the network itself because we saw a lot of EVM networks and this is a special EVM and it's like it can be a solution in other governments as well. And so what is the RBB? It's a publicly non-profit national blockchain network.

It was created in 2022. It started with the Federal Court of Accounts, the Tribunal de Contas, the TCU of Brazil. E together with the National Development Bank, the BNDS. Okay? So we have it two institutions on Brazil together creating a network, a EVM network. This is so powerful. And like today we have it many members on that, including the Plexus Institute that I am part like the 80 minute implement the R2 on chain with the Plexus Institute because imagine that

this is a permissioned network. It's not everyone that can go over there and hey, I like to put my thing over there. No, we we must go through some institution that is part of the organization. This is the Plexus Institute for now. We know that seems to be not so decentralized, but yes, it is, but we have a bit of permission to be sure that we are putting on chain only what is mattered to the community itself. Okay? And there are three three important points when you talk about the RBB itself. First, it's open

to verify. So, anyone or any entity can access and verify the network data without prior authorization. But oh, you told that it's permissioned, but how can anyone everyone would like to see this now you can. Yes, you can. Because they are different kind of nodes. This is another so cool. Imagine that we have a node that is the observer node. So, this node is only to know what's happened behind over the over there. So, you can see all the transactions, but you cannot send a transaction. But you can audit, you can see everything. This is the transparent thing of this. But then we have another

kind of node um that is the permissioned to write. So, there are other kind of nodes that has uh have the authorization to write. And this is the permissioned part. So, only the privileged know trusted and authorized entities can register the information on this blockchain. Okay? And what is so cool about this because we talk about something related to government organs that is started this and then now we have other kind of institutes that is part of them. But this is collective governant. It's like

It's like a DAO. We try to have to be a DAO on the RBB. And we have it this like the patrons, the coordinators, associates, and all the partners that sustain these shared and the decisions. And this really uh we have the process to have this kind of decisions and to decide even votes. We know that uh for example, if some we have the validators, the node that uh are take care of the network. If you a node like is down for some time, uh we have a automatically voted process that the node will be out of the network

and then we must have the the participants vote again to see if now, okay, this uh node is good again, we can bring it this to the chain again. So, we have this kind of government process as well to be sure that everything is secure in the network. And uh like the RBB goal uh is to bring you more transparency and auditability to the public service. I have the GitHub over there, we can check it out. And the like I said before, this for the R2 community makes difference because the community uh was bigger, especially if this

because they can trust more and they know that exactly what's happened with all the money that is circulating on that community. And I think this this is my main presentation. I'm here uh open to question if you have any question. It was like a short presentation. And like this is my contact uh my handle, you can find me everywhere. And even my website, you can see previous presentations.

And uh how we are with the Do you have any question? Do you know? >> Yes, there are quite a lot of questions. >> Ooh. >> So, we can get into it. We're good on time. >> Ooh. >> Um let me switch over to Mir Cab. I'm going to ask you to all to come to the center of the stage. And we're going to look at all these questions. Okay, number one, are the transactions reversible? What if the user gets hacked and loses money? What support do they have? >> Um the transactions are not have reversible. Okay, this is a blockchain. We are still talking about blockchain.

And like you remember that I comment like for the user it stands transparent because it is still behind the app, behind the application. So, uh if the user you not be like hacked because he's not on this case managing directly private keys something like that. In fact, he don't know about this directly. So, if he loses his money, it's only if he gave his he gave his app to another person. This is the only way. It's not with the blockchain itself. Okay?

Remember, the blockchain is used to give it transparency about what he's doing, but not to manage what he's doing itself. Okay? >> Amazing. Thank you. Um our next question is, are there any privacy issues with transactions being public and this currency used at scale? >> First, no because especially we still take care of the information of the people. So, it's not your name that appeared on chain. It's a wallet, it's a transaction, and even that we do double hash on that one to be sure that this is not really tied to your own person.

Yeah, and you know that we can have these kind of problems like in public blockchains as well. If you send some something to another address, he knows your address now, can monitor your balance. This is not good, and we are not doing this with the people itself. Yeah. And related to the scale, this is an interesting question because we have we even on RBB we are having like problems with this like we have so many institutions that are part of the RBB now and in some moment like the plexus institute with the other two was using more than 10% of the the

capacity of the nodes. So we must even figure out how to balance this and increase the capacity of that one but being like a permission and chain we can increase this. This is the point. We have the capacity to increase that one. >> Perfect. Our next question is are there any liquidity issues for changing from one community coin to another? >> In fact they don't change for from one community coin to another. They change directly for the Brazilian real they like the official currency.

Imagine I will imagine another example. When you are like fostering the community and using the money inside the community you don't need like the the national currency. But okay in some moment you must buy something outside at least some supply something to bring it to your community. That is the moment that this currency you'll be swapped in an automatic way to the Brazilian real only on that moment. So it's not we because we are not swapping between the community coins this is not a problem.

>> Awesome. And then I think we have time for one final question and I'm going to summarize some of the questions I'm already seeing on Meerkat which is essentially are you running into or did you run into any regulatory boundaries or friction with the government or any other kind of regulatory bodies while building and implementing Ardu? >> Oh this is amazing question and the probably I have only slide on that one I and I don't know why this like didn't appear. Yeah, but I have a one is like on this one because of that are regulation on Brazil related to the community coins with this kind of currency. So this is regulated in Brazil. The way that we can have it this

all the community currencies on Brazil is in a regulated way and this is like good and maybe other countries can >> [music]