Stellar is a common financial platform, designed to be open and accessible to everyone.
This document outlines the long-term plan of both the Foundation and the Stellar protocol.
Our mission is to expand financial access and literacy worldwide.
When individuals have access to financial services and the confidence that those services are working in their best interest, those individuals can independently improve their lives. Yet the current financial system is too costly and complicated, leaving millions of people on the sidelines.
Just as the internet allowed anyone to send an email or create a blog, Stellar’s common financial platform now allows you to easily send, save, and receive money, without large fees or hassle.
The Foundation is responsible for:
- Programs promoting digital financial literacy funded by grants of digital currency and distribution of lumens.
- Developing free tools and services that support the users of the network and the network itself, particularly the functions that are seen as beneficial for the world that are not being addressed by for-profit entities.
- Ensuring that the Stellar protocol remains freely accessible to anyone who wishes to use it.
The last few years have shown that a worldwide transition to digital money is starting, and large amounts of capital are currently entering the space. Our not-for-profit structure is designed to ensure that we remain focused on the goal of educating and giving access to as many people as possible. When designing and implementing any programs, the non-profit will take care to make sure it is not a privileged player in the network or the protocol.
To build trust — within the community and within our team — we are committed to transparency and other safeguards. Therefore, as part of our governance practices, the following will be made permanently and publicly available:
- Sum of salaries + lumen grants of all employees
- Quarterly budget
- Details/mechanism of the various lumen distribution programs
- Aggregate number of individuals who have participated in the direct signup program and number of lumens distributed
- Details and progress of the increased access program, including number of applications received, grants granted, and distribution schedule
- Details and progress of the bitcoin program
- Total lumens held by the Foundation
The Foundation received a loan of $3,000,000 from Stripe which was subsequently repaid with 2% of the lumens. The Foundation is allowed to use up to 5% of the initial lumens to fund operations (including the loan repayment).
At genesis 100 billion lumens were created. The lumens are required to be distributed to the world in the following manner.
- 50% for the world via the direct signup educational program
- 25% for nonprofits to reach underserved populations via the increased access program
- 20% for the bitcoin program
- 5% for operational costs
In order to provide additional stability to the system, the nonprofit founders and Stripe have voluntarily agreed not sell any of the lumens initially received (either via employee grants in the case of the founders or via repayment of the loan) for at least five years; however, Stripe may auction any of their lumens, provided the recipients also agree not to sell their lumens for five years, and net profits are returned to the Foundation.
Direct signup program
50% of the initial lumens are dedicated to the direct signup program. The purpose of the program is to extend financial knowledge and access to financial services around the world. Our goal is to distribute the initial allocation of 50 billion lumens in three years but no longer than five years.
Registration for the initial direct signup program will be done via Facebook. We are using Facebook as our initial login methodology because it is the largest database of identity, and our goal is to reach as many people as possible with our educational programs before running out of funds. Therefore, we need a system that allows us to screen out duplicate or spam accounts.
We will set up a website where anyone can come and register. We will also make reasonable best effort to screen out fraudulent accounts or people with multiple Facebook accounts. Once the direct signup program has commenced, the Foundation will begin work on alternative channels for distribution of lumens, including SMS and other online channels, in order to allow more people access without having to have a Facebook account.
People participating in this program will receive their initial grant of lumens to fund an account which they will use to learn how to use online financial tools. In addition, completing educational tutorials will earn extra lumen rewards.
We commit to admitting at least the following number of people each month into the direct signup program.
Month 1: 10k people
Month 2: 20k people
Month 3: 50k people
Month 4-12: 100k people per month
Month 12+: capped only by technical constraints
We anticipate even broader reach than these numbers, limited only by the scalability of the network. Once these monthly limits have been reached, people may be placed on a waitlist and be admitted into the program as more space is available. Every day we will take people off the waitlist and add them to the system. We believe that Stellar is most useful when groups of interconnected people are using the system. With this in mind, we may let people in out of order based on certain criteria such as geographic region, availability of tools in localized languages or number of friends in the system.
Increased access program
25% of the initial lumens will be set aside for grants to other nonprofit organizations. The goal of the nonprofit program is to allow the Foundation to reach underserved populations (hardest to reach) that do not presently have access to the online and mobile channels included in the direct signup program.
Nonprofits will be asked to submit grant proposals outlining how they can distribute lumens to underserved populations. The grant application process will be established and directed by the Executive Director. Grant applications will be reviewed by the Foundation for approval. All funds initially reserved for the nonprofit program will be distributed to nonprofits no later than 10 years of the Foundation’s formation. Extra time is being allocated to the nonprofit program as we believe that mobile phone penetration in developing countries is growing so fast that allowing additional time to administer this program will provide greater access to individuals living in those regions.
If you are a nonprofit interested in learning more, let us know.
20% of the initial lumens are set aside to be distributed to holders of bitcoin and XRP (19% for bitcoin holders and 1% for XRP holders).
We will take a snapshot of the bitcoin blockchain at a particular date and will set up a claim page that will allow bitcoin holders to receive their pro-rata share of the lumens reserved under this program by verifying they control their address from that blockchain snapshot. For example, a user owning .001% of the bitcoins in the blockchain snapshot would receive .001% of the lumens set aside for bitcoin holders under this program, or 190,000 lumens.
For bitcoin holders, distribution will begin within 6 months after Stellar is open to the public. The Foundation will maintain this claim site for at least 3 months.
For XRP, we will take a snapshot of ripple ledger 6,762,000 (a ledger occuring May 22nd, 2014). Any ripple account holder with less than 7.5 million XRP (~$50,000 USD at that time) in his or her account at that ledger will qualify for the giveaway. Every qualified XRP holder has two options to participate:
- Pro-rata: Similar to the bitcoin holders, eligible XRP holders may receive their pro-rata share of lumens allocated to this giveaway (1%) and be credited for up to 1.5 million XRP.
- Donation: Eligible XRP holders may also donate up to 1.5M XRP to a selection of charities and receive an equal amount of lumens in return.
For example: Sam had 1 million XRP as of ledger 6,762,000. He could choose to donate his XRP to a charity listed in the program and get 1 million lumens from the bitcoin program. Or he could choose to claim his pro-rata share of lumens allocated to this giveaway. Sam has .001% of the XRP so he would get .001% of the 1 billion lumens allocated to the XRP holders or 10,000 lumens.
The XRP claim page will be up at within 6 months after Stellar is open to the public and will remain up for at least 3 months.
Members and board members of the nonprofit will not participate in the bitcoin program for any bitcoins or XRP they hold during the claim period. If there are unclaimed lumens in the bitcoin program after this period, they will go to the nonprofit’s operational fund.
To account for both economic growth and lost lumens, there is a fixed 1% annual rate of new lumen creation. These new lumens will be generated on a weekly basis and distributed via a direct voting method similar to “participatory budgeting.” Our hope is that account holders will use the inflation-generated lumens to enable novel business models or to fund causes they support.
Here’s how new lumens created via this mechanism will work:
Every account is able to select another account as its nominee for new currency. Voting will be weighted according to how many lumens the voter has in his or her account. For instance, if you have 120 lumens and you vote for Jane as the recipient, that will be counted as 120 votes for Jane.
Each week, the network will identify the winners. The winners are any accounts that receive at least .05% of the vote. That week’s new lumens are then distributed pro-rata to the winners. If no account has over .05% of the vote, then the inflation lumens get put into the fee pool to be distributed the following week.
If the Foundation is the beneficiary of new lumens, the lumens can be used to support our operations or to extend the direct signup and increased access programs.
More technical information on inflation is available here.
One of the activities of the Foundation will be to maintain a software development team with the purpose of: a) contributing to the open source code that supports the Stellar system, and b) building free, non-commercial open-source tools that advance the Foundation’s mission of expanding education and access. This will allow developers and individuals anywhere to have a baseline of code that they can start with before localizing for their own needs.
The Foundation will be allowed to allocate lumens for bug bounties and other developer programs to accelerate the development and increase security of the platform on an as-needed basis. Such programs and bug bounties will be reported in the publicly released quarterly budgets.
Initial membership of the Foundation will consist of three members, Patrick Collison, Joyce Kim, and Jed McCaleb. Initial board members are Keith Rabois, Jed McCaleb, Patrick Collison. The Board will be expanded to at least 5 members by the end of 2014. Like most nonprofits, board members and advisors get no compensation for their service in such roles.
The responsibilities of the Board will be to set the mission and purpose of the Foundation, to select an Executive Director, to ensure adequate financial resources for the Foundation, and to ensure the ethical integrity of the Foundation.
Executive Director responsibilities
The Executive Director will be responsible for appointment of other management positions, including but not limited to financial, operations, community, technology, etc. and the setting of salary and benefit levels for other staff. The Executive Director (“ED”) and other managers appointed by the ED will retain the right to resign at any time upon written notice.
In order to attract and retain the best employees, the Foundation acknowledges that it must offer competitive salaries and benefits. Employee Salaries are set by the Executive Director and approved by the Board. The Executive Director salary is set by the Board. Employees will also be offered lumen bonuses, as approved by the independent members of the Board. All employees of the Foundation are on a four-year vesting schedule for their lumens.
Continued funding of the foundation and auction
From the original donation, 5% of the lumens were set aside to fund the operations of the Foundation. Periodically the Foundation will auction off a portion of these lumens in the operational pool to raise money for the operations of the Foundation. The auction will take place inside the distributed exchange. These will be held on an as-needed basis, though we intend to hold one of these auctions monthly.
The Foundation may also receive donations from the public.