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Easy IOUs on Xumm.Community


moncho
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Hey All!

So last night I tried out the Easy IOUs feature (https://xumm.community/easy-iou) rolled out by Xumm.Community and created my own IOU on the XRPL called Xontle (XTL) after the currency used by the Mayas (cocoa beans).

As stated in the website perhaps this is the most straight forward way to create an IOU in the XRPL and I could confirm. It took me a little less than half hour and cost me 5 XRP service fee and another 10 XRP put in reserve to create trust lines.. 

I wrote about my experience with the service (not a how-to guide, as I think you need to read step by step carefully). 

https://coil.com/p/moncho/Back-to-Basics-Xontle-a-Cocoa-Inspired-Token-in-the-XRPL/DUKsP0N9X

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1 hour ago, ADingoAteMyXRP said:

Nice! This is such an interesting and underutilized aspect of the XRPL. (And great intro to Mayan finance).

What do you think the main use cases are for IOUs on ledger? Could they be used to keep track of loan amounts?

A few examples:

  • An affordable cashless payments system for the workplace, schools and universities (cafeteria, bookstore, etc), as you can issue local currency backed IOUs. This can come in handy as people will be less keen to carry cash after COVID.
  • A proof of concept for a parallel digital economy in a small town somewhere (fiat backed). 

I think you are absolutely right. It is an underutilized feature but current circumstances may accelerate its adoption.

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On 5/25/2020 at 12:20 PM, moncho said:

A few examples:

  • An affordable cashless payments system for the workplace, schools and universities (cafeteria, bookstore, etc), as you can issue local currency backed IOUs. This can come in handy as people will be less keen to carry cash after COVID.
  • A proof of concept for a parallel digital economy in a small town somewhere (fiat backed). 

I think you are absolutely right. It is an underutilized feature but current circumstances may accelerate its adoption.

When creating an IOU like this, how do you back them with local currency?

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On 5/25/2020 at 1:38 PM, ADingoAteMyXRP said:

What do you think the main use cases are for IOUs on ledger?

Could they be used to keep track of loan amounts?

IOUs can be setup on a bank's xCurrent ledger with the terms/cost of the relationship represented via Quality In/Out. This would enable "distributed Pathfinding" across RippleNet. I described this in the How xPool write up.

IOUs can also have demurrage which is a negative interest rate. That can be used to engineer a loan arrangement. It can also be used with a positive interest rate. 

PayChans can be used to facilitate loans across ledger (ILPish) as I articulated in What could xPool be?

Remember this is all accounting options for various desired market dynamics. 

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On 5/29/2020 at 12:36 AM, XRPboi said:

When creating an IOU like this, how do you back them with local currency?

It would depend on how the entity issuing it would assign the funds to back it up.

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46 minutes ago, moncho said:

It would depend on how the entity issuing it would assign the funds to back it up.

Any IOU is going to have some sort of contractual legal arrangement underlying it.

It could be fiat held in escrow, it could be gold (that was done years ago on XRPL), you could even make an IOU for TLUs, and have it represent multiple assets at one time (1. TLU conversion factor: camel: 1, cattle, mules: 0.7, sheep and goats: 0.10, horses: 0.80, asses: 0.50, pigs: 0.20, chickens: 0.01). I could see some sort of Hawala type of distributed "gateway" to issue/redeem animal values onto XRPL.

Found this interesting re Hawala and money laundering.

Edited by KarmaCoverage
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  • 2 weeks later...
On 6/4/2020 at 7:13 PM, Trisky said:

Thanks for reminding me to open a XUMM account. I saw it's intro recently and was impressed. Wietse's work is amazing and love to do more with XRP (and/or the ledger) myself. :victory:

I did some testing today and emailed my findings to Wietse W. One of my issues with this version is that it would be much better if you could see XRP in the default countries fiat value in the 'home screen'. That however would assume a liquid decentralised XRPL exchange. In the very near future version 1.0.0. is to be expected with better security features.

Edited by cryptoxrp
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