#CoFi, or Collaborative Finance, starts with the observation that despite some meaningful advancement, nearly 15 years of blockchain have failed to address the core problems of our current economic system. Why?

• Most projects have focused on the token, the investor, the speculator, the technology not on those who create real value (i.e. producers)
• Most blockchain advocates are technicians who assume that all problems can be fixed with technology, and do not appreciate the political dimension.
• Businesses need a stable unit of account, not a speculative asset.
• Payments networks should be built by engaging with existing networks, not by signing up one account at a time.
• Businesses need access to credit, which doesn't come easily from a 'trustless' technology.

#CoFi attempts to improve upon waves of blockchain innovation such as #DeFi (decentralised finance) which has not found a way to finance realworld businesses, and #ReFi (Regenerative Finance) which faces similar struggles. It is not explicitly a blockchain movement; though blockchains provide robust and programmable ledgers, we regard technical solutions are only the last part of the work of transforming the economy.

The unfolding climate disaster, the unwinding of capitalism, and many governments' desertion of duty mean that that the people and businesses who make civilisation possible by creating valuable things are failing, and the capillaries through which wealth is distributed through our communities are being blocked. To counter this trend they must turn away from the competitive mindset towards collaboration — things like

• Clearing systems - cancelling invoices at the end of each month within a payment network
• Network credit - when businesses pay each other with (promises of) products instead of fiat money
• Voucher systems - businesses financing themselves by issuing vouchers and selling or spending them into circulation.
• Sharing spare cash between businesses and individuals, (eg Roscas)
• Mutual investment when businesses own shares in each other
• Coordinating in groups to get better prices i.e. Bulk buying/selling
• Preferential/nonprofit pricing to those within the group.

Of these the easiest rallying point, which we think of as the gateway to #CoFi, is the first. It requires no additional trust; with recent technology it's hardly any trouble for each business; and it can help greatly with cashflow, the bane of small businesses. A network doing clearing is then in a fine position to consider deeper forms of collaboration.

To not repeat the hype-cycle of blockchain, #CoFi aspires to the following principles.

1. Own the tech and institutions. Payment and credit services are too important to trust to third parties who are trying to maximise profit. Network services should be mutually owned and governed.
2. Trust-ful not trust-less. Infrastructure shapes society; trustless infrastructure implies a non-society such as a zombie apocalypse, and is very inefficient to boot.
3. Grassroots before global. Most venture capital funded infrastructure never sees the light of day because it is an all or nothing gamble to make a global monopoly. By serving real, local projects Cofi can make a difference without having to conquer the world.