Circles v2 brings together Gnosis Chain, Safe and CoW Swap with a focus on basic income

• Circles v2 aims to create community money with Gnosis Chain
• Martin Köppelmann bets on fair distribution of cryptocurrencies
• Project combines Safe, CoW Swap and Metri wallet

Circles v2, set to launch on Wednesday, represents the culmination of more than a decade of thinking by Gnosis co-founder Martin Köppelmann. The project proposes a new approach to creating “community money,” with a continuous, decentralized distribution model based on the Gnosis Chain.

According to Köppelmann , the new version of Circles combines technologies that have matured over the years within the Gnosis ecosystem, such as the Metri wallet, the CoW Swap trading platform and the Safe security protocol. The initiative seeks to transform a social experiment into a consumer-facing product, something that the executive considers viable for the first time after almost five years since the first version of the project.

The Circles concept is based on the automatic generation of individual tokens — called CRC — at a rate of one per hour for each member of a created circle. These tokens, implemented as ERC-20s unique to each community, acquire value based on mutual trust between users and their actual use in transactions.

“You can sign up as many times as you want, but each sign-up generates a new token that will have no value without real social connections,” Köppelmann explained in a post on the Humans of Gnosis blog. The proposal encourages the formation of trust networks, where tokens become useful only when accepted by others.

Circles v2 also incorporates ideas that Köppelmann sees as a response to the problems observed in Bitcoin. Unlike the pioneering cryptocurrency, which has a limited supply and concentrated mining, Circles allows unlimited issuance with a pre-defined distribution logic. This approach aims to encourage the use of tokens as a means of exchange rather than as an instrument of speculation.

The new phase of the project has received attention from prominent figures in the cryptocurrency sector, including Vitalik Buterin and Hayden Adams, who see the proposal as a form of universal basic income powered by smart contracts and interconnected communities.

The new version of the Circles project, led by Gnosis co-founder Martin Köppelmann, presents significant advances with the introduction of Circles v2. One of the most notable updates is the integration of GnosisPay, a non-custodial payment system powered by Visa technology. With this new feature, users can now use cryptocurrencies to make payments at any establishment that accepts Visa.

“You can pay anywhere that accepts Visa,” said Köppelmann, highlighting the breadth of use that GnosisPay brings to the initiative.

Another highlight of the update is the implementation of “groups”, a new feature that allows different circles to unite under the same ERC-20 token. This significantly improves the fungibility between participants, one of the main challenges faced in the previous version.

Scalability is also a focus. While Circles has seen its initial adoption in local, in-person settings—with approximately 100 users participating in the version 1 pilot—Köppelmann believes in the platform’s global potential. “I can imagine a global group of Circles,” he said, acknowledging that so far, the most successful uses have been in “ultra-local” contexts.

Social mechanics remain central to Circles’ design. According to Köppelmann, trust between members of the network is key: “If you receive Circles from people with whom you have a personal connection, it becomes easier to maintain this social contract: If I gave you something in the past for your Circles, then you should give me something in the future for your Circles.”

Aiming to expand the reach and usefulness of the system, the new version allows financial support to liquidity pools, including automated market makers. This function gives Circles tokens a guaranteed minimum exchange value, making them more viable for transactions outside of trust networks.

Gnosis DAO approved, in 2023, an investment of €1,7 million ( via proposal GIP-88 ) to support this infrastructure. Köppelmann noted that in addition to this amount, the DAO also committed to matching contributions made by users themselves. “Every time someone supported their own Circles with another $100,” Gnosis would match that amount.

“Circles is a larger, long-term project, but many of the things Gnosis has been working on fit together well,” Köppelmann concluded, citing initiatives such as Safe, CoW Swap and GnosisPay itself as complementary parts of Gnosis’ vision for the future of decentralized finance.