This site describes what is possible with Cosmo-Local Credit: options for registries, routing, clearing, shared services, and governance. Sarafu Network is one working example, not the only governance model.

Executive Brief

CLC can work like shared clearing infrastructure for vouchers and obligations: it helps many issuers swap, route, and settle credits safely, without turning them into speculative money.

This is commitment-first clearing: the unit exchanged is a redeemable claim with clear terms and receipts (not a volatile token) and fees are tied to real settlement, not trading churn.

Commitment Pools are shared markets where people can swap redeemable commitments and settle them over time.

A ‘commitment’ can be any redeemable obligation: gift cards, loyalty points, invoices, service credits, school/clinic vouchers, carbon/repair credits, micro-loans, prepaid utilities, or mutual-aid pledges.

Scaling to a federation of pools requires shared infrastructure that no single steward has to control: insurance buffers, audits, monitoring, routing standards, and off-ramps - plus clear, accountable rules for risk.

Cosmo-Local Credit (CLC) is shared settlement infrastructure for many independent Commitment Pools. It can be stewarded by different accountable structures - cooperatives, community groups, federations, public agencies, companies, multisigs, service operators, or other governance arrangements with transparent rules. Its role is to coordinate and fund the safety layer so commitment pooling can scale without becoming extractive or fragile. In practice, it becomes a credit routing + clearing layer across many issuers - so different communities and institutions can settle obligations with each other without needing one central bank-like operator.

Any institution or governance body can set up a CLC-compatible registry of Commitment Pools and define transparent fees for services such as routing, clearing, monitoring, liquidity support, or insurance coordination. Who manages shared registries and receives those service fees is deployment-specific: a deployment might be stewarded by a nonprofit foundation, cooperative, holding company, public agency, community group, multisig, or service operator. Sarafu Network, for example, is managed by the nonprofit Grassroots Economics Foundation.

Example: a clinic voucher in one pool can be swapped through trusted pools into food or transport credits, and the network “clears” by netting flows so fewer swaps need cash.

Mission (North Star): maximize the velocity of settlement of outstanding commitments (how quickly listed promises become fulfilled) while preserving care, fairness, and resilience. (Metric: settlement velocity, fulfillment rate, redemption latency.)

• Pool stewards (local curators) list vouchers (goods and services) and publish guarantees; their fulfillment history becomes discoverable and comparable.
• Lenders & liquidity providers (infrastructure funders) can finance real production while holding redeemable collateral (vouchers) that can route across trusted pools. Debt becomes a relational market.
• Producers/borrowers (shops, services, projects) get working capital now and can repay in-kind by fulfilling their vouchers—broadening their market instead of shrinking it.
• Consumers (everyday people) can browse curated markets they trust and choose purchases that directly reduce someone’s outstanding obligations.
• Market makers & routers (inventory + routing operators) earn by improving reliability and settlement speed (keeping inventory available, improving routes, maintaining off-ramps), not by manufacturing speculation.
• Registry and policy stewards maintain pool registries, risk rules, routing policies, and service-fee terms for the networks they operate.

1) Pools remain local and sovereign

• Each pool steward lists redeemable obligations (vouchers/tokens), sets values, and sets pool fees (e.g., 0–20% depending on risk and voucher type).
• Pools enforce swap limits and redemption rules locally. This means many issuers can coexist (shops, schools, clinics, coops, municipalities) while still being interoperable.

2) Registries and services can charge transparent fees

• When value routes through pools, pool and service fees can be charged in the same asset that moved.
• A registry, routing service, clearing service, or shared safety layer may receive a percentage of pool fees or a separate service fee under published terms.
• This aligns incentives: service providers earn more only when real settlement throughput grows.

3) Shared-service fees can follow a safety-first “Waterfall”

One possible design allocates shared-service fee inflows in order:

1. Insurance buffers (to handle defaults/incidents within defined limits)
2. Core operations (audits, monitoring, incident response, governance ops)
3. Liquidity/off-ramp mandates (to keep settlement reliable and fast)
4. Only if the above are met: an epoch (e.g., monthly) fee-access budget

Key clarity: fees arrive in whatever asset moved, including non-convertible vouchers (like gift cards or service credits). Only the cash-eligible/convertible portion can reliably fund fiat/stable-denominated insurance and operations—so break-even depends on both volume and convertibility, and reaching it can require substantial network growth. Every swap emits an immutable receipt (a permanent, human-readable record) so listings, swaps, redemptions, pauses, and guarantees can be audited.

LPs are: contributors who provide cash-eligible liquidity (stables/fiat rails and liquid tokens) to approved pools, settlement mandates, or off-ramp mandates that keep routing reliable.

In tokenized deployments, LPs may receive:

• CLC (governance rights) so contributors can set/limit risk, approve policies, and prevent capture.
• sCLC (epoch access receipt) which can grant capped access to the fee-access budget.

LPs fund shared clearing infrastructure itself. Governance, public reporting, and policy-gated fee access are possible mechanisms for non-extractive infrastructure financing.

When two pools list overlapping obligations, value can route across pools (multi-hop), and the network clears by netting flows and using shared liquidity and off-ramps (ways to convert to local currency/stables when needed) to reduce settlement delays. This is important because it turns fragmented obligations (thousands of small issuers) into a usable economic fabric - so people can pay, trade, and fulfill needs even when no single issuer is universally trusted or universally liquid.

Clearing means the network can “net out” flows across many swaps so fewer transfers require cash—making settlement faster and more reliable.

Some CLC deployments may use tokens for governance and safety coordination. Other deployments may use cooperative rules, foundation governance, public mandates, multisigs, institutional boards, or hybrid arrangements.

CLC (governance + safety coordination)

• Purpose: coordinate and secure the network’s shared rules and budgets.
• Not equity: no guaranteed returns, no dividends, no promise of profit.
• Can be used for governance participation and escrow/staking to align decision-makers with network safety.

sCLC (epoch receipt / access key)

• What it represents: a time-bounded receipt for staked/escrowed CLC that can grant** access** to the epoch’s fee-access budget. That fee-access budget is what makes the network’s shared clearing infrastructure sustainable
• sCLC is best understood as access under limits, not a yield instrument.

Whatever governance option is used, network governance should keep scaling accountable and safe:

• Timelocks + quorum tiers for sensitive changes
• Transparent receipts and reporting (what changed, why, and who approved it)
• Emergency pause + incident runbooks
• Credible exit / forkability so communities can leave if governance becomes harmful

Why shared governance is essential for safely scaling Commitment Pooling

The protocol makes commitment pooling possible; shared governance can make it durable at scale by funding and enforcing the commons: safety rules, insurance capacity, operational reliability, and settlement/off-ramp liquidity - all governed with explicit risk boundaries.

That’s how Commitment Pools can scale from a local exchange tool into a general-purpose settlement network for obligations (from gift cards to invoices) without sacrificing local accountability or safety.

For a detailed explanation, see the network stewardship and token section of the White Paper.