Cooperative behavior in blockchain-based complementary currency networks through time: The Sarafu case study

Abstract

The effort to reach the 17 Sustainable Development Goals by the United Nations has incentivized the adoption of IT solutions in many fields. Many systems for sustainable economic development are now relying on a digital form making them more accessible and provides the access to new functionalities. A very interesting example of such systems are complementary currencies i.e. cooperative currency systems that support national economies to provide humanitarian aid and promote sustainable development. While there are many studies on the principles and case studies of successful complementary currencies, many aspects are still unexplored, especially regarding cooperative behavior. Cooperative behavior in these systems is a key aspect, as complementary currencies are often born out of cooperation among members that face a period of crisis or they usually have the objective of creating bonds of reciprocity and integrating social networks between people, which should lead to increased cooperation. However, there is a lack of studies on many aspects of cooperative behavior in complementary currencies, such as how such behavior changes over time, especially in times of a crisis like the COVID-19 pandemic. Moreover how cooperation behavior is affected by time and different geographical locations is still unclear. In this work, we analyze Sarafu, a complementary currency that went digital and now relies on blockchain technology. Sarafu is a successful case of a complementary currency that was used for humanitarian aid during the COVID-19 pandemic. Moreover, Sarafu is a perfect case study for the study of cooperative behavior, as it implements a special type of account, the group account, to support cooperation groups. This feature supports the study of group dynamics and behavior. What we find is that Sarafu users exhibit strong reliance on cooperation groups; we also observe that the interaction of users and cooperation groups is influenced by both time and geographical location. The study of group accounts and in general mechanisms that promote cooperation can be useful for other humanitarian or community development projects. Moreover, similar cooperation enhancers could have an important role in other social development projects, and in general, in any setting where there is a strong need to foster cooperation for reaching social good.