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cic-docs/spec/002_xdai_migration.md

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xDAI Migration spec

Rationale

We want to give donors and community members a way to contribute to and cash-out from Community Inclusion Currencies with National Currency. By connecting to a reserve that is stable to the US dollar called xDAI we bring some stability and the ability for many to support local communities. We also enable any CICs that have xDAI as a reserve to convert to any other CIC with xDAI as reserve.

Before

Currently we are using a virtual reserve a generic ERC20 token. We have 2 Million of those reserve tokens against 8 Million Sarafu issued (the current Kenyan CIC). (Call those Sarafu_1 or S1)

After

We have 40,000 xDAI to put as the reserve and are looking at minting (16Million) tokens (called Sarafu_2 S2) with a connector weight (target Reserve Ratio) of 0.25 (25%) and an inital price of roughly 100 Sarafu to 1 xDAI (USD stable) (Note that the 100 Sarafu to 1 xDAI will approximate the Kenyan Shillings to USD rate)

Implementation

Each existing user should have a completley new wallet and private key for security reasons and be given the same balances they currently have with the new (xDAI reserve) Sarafu. Roughly 8Million Sarafu_1 in wallet will be replaced with Sarafu_2

Workflow

  1. Synch db <->Blockchain - ensure synronization between our db (USSD interface) and blockchain
  2. Finalize any contract changes to Bancor Suite (such as Depth Bump)
  3. Create Public vs Private Functions - Contracts as permissionless as possible
  4. Create group of govenors on a multi-sig wallet with the power to assign the facilitator address of all blockchain contracts (Bancor Suite).
  5. Deploy contracts to create Sarafu_2, set inital variables - deposit reserve and mint tokens
  6. Migration - New wallets for users - Replicate user accounts with new token Sarafu_2 - ensure private keys are safely stored
  7. Can our own xDAI node process transactions?

Variables

  1. Synch variables, - synch frequency - and limitations
  2. Contract variables (reserve ratio (0.25), reserve amount (40k xDAI), number of Sarafu_2 (16Million), convert fee 0.005 (0.5%))
  3. Migration speed - how often is synching done between USSD db and blockchain
  4. 3rd party Fiat <-> xDAI conversion costs and speed

Interface

This migration will all be done at code and command line level, while some testing can be done on the platform gui

Testing

  1. Check db<->blockchain synch - verify they are synched and we can do external transactions and handle RPC failure
  2. Token Governance
  3. Contract deplyment - conversions, transfers all work as expected
  4. Migration - new wallets match old wallets
  5. Store old blockchain wallet IDs (as a list with older POA and xDAI wallets)

Changelog