LoopCoin
LoopCoin (LC) is a node-issued local currency used to settle material and product transfers between federation peers. Each node issues its own LoopCoin with configurable expiry and decay rules, keeping value circulating locally while enabling inter-node clearing. This is an early-stage lab concept with no public pilots yet.
Scope & boundaries
In scope
Node-issued currency configuration, peer-to-peer transfers, and inter-node settlement batching.
Out of scope
Fiat on/off ramps, external exchange listings, or legally regulated financial instruments.
Status
Lab-demo concept only — no public pilots or deployments yet.
How it works
Issuance
Each city node issues its own LoopCoin (e.g., LC-MUC for Munich). The node defines exchange rate, expiry window (1–12 months), and optional decay rate after expiry.
Local bonus
Nodes may apply a local spending bonus (up to 50%) to incentivise circulation within their own community before value overflows to neighbours.
Transfers
Peer-to-peer LoopCoinTransfer payloads record sender, recipient, amount, currency code, and optional material reference.
Inter-node settlement
InterNodeSettlement batches cross-node transfers, applies export and import penalties derived from LoopSignals, and records the clearing method (gross, netting, or clearing).
Expiry & decay
Unspent LoopCoin expires after the configured window and decays at the node-defined rate — ensuring value stays in motion and does not accumulate indefinitely.
Data model snapshot
Current status
{
"$schema": "http://json-schema.org/draft-07/schema#",
"$id": "https://local-loop-io.github.io/projects/loop-protocol/schemas/v0.2.0/loopcoin.schema.json",
"title": "LoopCoin",
"description": "Schema for LoopCoin configuration and transactions",
"oneOf": [
{
"$ref": "#/definitions/LoopCoinConfig"
},
{
"$ref": "#/definitions/LoopCoinTransfer"
},
{
"$ref": "#/definitions/InterNodeSettlement"
}
],
"definitions": {
"LoopCoinConfig": {
"type": "object",
"required": [
"@context",
"@type",
"issuer",
"currency_code",
"backed_by",
"exchange_rate",
"expiry_months"
],
"properties": {
"@context": {
"type": "string",
"enum": [
"https://local-loop-io.github.io/projects/loop-protocol/contexts/loop-v0.1.1.jsonld",
"https://local-loop-io.github.io/projects/loop-protocol/contexts/loop-v0.2.0.jsonld"
]
},
"@type": {
"type": "string",
"const": "LoopCoinConfig"
},
"schema_version": {
"description": "Optional schema version identifier.",
"type": "string",
"pattern": "^0\\.[1-9]\\d*\\.\\d+$",
"examples": [
"0.2.0"
]
},
"issuer": {
"description": "Node that issues this LoopCoin",
"type": "string",
"pattern": "^[a-z0-9\\-]+\\.loop$",
"examples": [
"munich.loop"
]
},
"currency_code": {
"description": "Currency identifier",
"type": "string",
"pattern": "^LC-[A-Z]{3}$",
"examples": [
"LC-MUC"
]
},
"backed_by": {
"description": "Backing currency",
"type": "string",
"enum": [
"EUR",
"USD",
"GBP",
"CHF",
"SEK",
"NOK",
"DKK"
],
"examples": [
"EUR"
]
},
"exchange_rate": {
"description": "Exchange rate to backing currency",
"type": "number",
"minimum": 0,
"examples": [
1
]
},
"local_bonus": {
"description": "Bonus percentage for local spending",
"type": "number",
"minimum": 0,
"maximum": 0.5,
"default": 0.05,
"examples": [
0.05
]
},
"expiry_months": {
"description": "Months until LoopCoin expires",
"type": "integer",
"minimum": 1,
"maximum": 12,
"examples": [
6
]
},
"decay_rate": {
"description": "Monthly decay rate after expiry",
"type": "number",
"minimum": 0,
"maximum": 0.2,
"default": 0.05,
"examples": [
0.05
]
},
"max_issuance": {
"description": "Maximum LoopCoins that can be issued",
"type": "integer",
"minimum": 0,
"examples": [
1000000
]
},
"current_supply": {
"description": "Current circulating supply",
"type": "integer",
"minimum": 0,
"examples": [
450000
]
},
"reserve_ratio": {
"description": "Reserve ratio (backing currency / issued)",
"type": "number",
"minimum": 0,
"default": 1,
"examples": [
1
]
}
},
"additionalProperties": true
},
"LoopCoinTransfer": {
"type": "object",
"required": [
"@context",
"@type",
"id",
"from",
"to",
"amount",
"currency",
"timestamp"
],
"properties": {
"@context": {
"type": "string",
"enum": [
"https://local-loop-io.github.io/projects/loop-protocol/contexts/loop-v0.1.1.jsonld",
"https://local-loop-io.github.io/projects/loop-protocol/contexts/loop-v0.2.0.jsonld"
]
},
"@type": {
"type": "string",
"const": "LoopCoinTransfer"
},
"schema_version": {
"description": "Optional schema version identifier.",
"type": "string",
"pattern": "^0\\.[1-9]\\d*\\.\\d+$",
"examples": [
"0.2.0"
]
},
"id": {
"description": "Unique transaction ID (UUID)",
"type": "string",
"format": "uuid",
"examples": [
"550e8400-e29b-41d4-a716-446655440000"
]
},
"from": {
"description": "Sender identifier",
"type": "string",
"pattern": "^(user|business|node):[^@]+@[a-z0-9\\-]+\\.loop$",
"examples": [
"user:maria@munich.loop"
]
},
"to": {
"description": "Recipient identifier",
"type": "string",
"pattern": "^(user|business|node):[^@]+@[a-z0-9\\-]+\\.loop$",
"examples": [
"business:brewery@munich.loop"
]
},
"amount": {
"description": "Transfer amount",
"type": "number",
"minimum": 0.01,
"examples": [
50
]
},
"currency": {
"description": "LoopCoin currency code",
"type": "string",
"pattern": "^LC-[A-Z]{3}$",
"examples": [
"LC-MUC"
]
},
"material_ref": {
"description": "Related MaterialDNA ID",
"type": "string",
"pattern": "^MAT-[A-Z]{2}-[A-Z]{3}-\\d{4}-[A-Z]+-[A-Z0-9]{6,}$",
"examples": [
"MAT-DE-MUC-2025-GRAIN-B847F3"
]
},
"timestamp": {
"description": "Transaction timestamp",
"type": "string",
"format": "date-time",
"examples": [
"2025-05-27T14:30:00Z"
]
},
"memo": {
"description": "Transaction description",
"type": "string",
"maxLength": 200,
"examples": [
"Payment for spent grain"
]
},
"signature": {
"description": "Digital signature",
"type": "string"
}
},
"additionalProperties": true
},
"InterNodeSettlement": {
"type": "object",
"required": [
"@context",
"@type",
"from_node",
"to_node",
"transfers",
"settlement_method"
],
"properties": {
"@context": {
"type": "string",
"enum": [
"https://local-loop-io.github.io/projects/loop-protocol/contexts/loop-v0.1.1.jsonld",
"https://local-loop-io.github.io/projects/loop-protocol/contexts/loop-v0.2.0.jsonld"
]
},
"@type": {
"type": "string",
"const": "InterNodeSettlement"
},
"schema_version": {
"description": "Optional schema version identifier.",
"type": "string",
"pattern": "^0\\.[1-9]\\d*\\.\\d+$",
"examples": [
"0.2.0"
]
},
"from_node": {
"type": "string",
"pattern": "^[a-z0-9\\-]+\\.loop$"
},
"to_node": {
"type": "string",
"pattern": "^[a-z0-9\\-]+\\.loop$"
},
"transfers": {
"type": "array",
"items": {
"type": "object",
"required": [
"from",
"to",
"amount",
"from_currency",
"to_currency"
],
"properties": {
"from": {
"type": "string"
},
"to": {
"type": "string"
},
"amount": {
"type": "number",
"minimum": 0
},
"from_currency": {
"type": "string",
"pattern": "^LC-[A-Z]{3}$"
},
"to_currency": {
"type": "string",
"pattern": "^LC-[A-Z]{3}$"
},
"exchange_rate": {
"type": "number",
"minimum": 0,
"default": 1
},
"fees": {
"type": "object",
"properties": {
"export_penalty": {
"type": "number",
"minimum": 0
},
"import_penalty": {
"type": "number",
"minimum": 0
},
"distance_cost": {
"type": "number",
"minimum": 0
}
}
}
}
}
},
"settlement_method": {
"type": "string",
"enum": [
"clearing",
"gross",
"netting"
],
"default": "clearing"
},
"settlement_period": {
"type": "string",
"enum": [
"immediate",
"hourly",
"daily",
"weekly"
],
"default": "daily"
}
},
"additionalProperties": true
}
}
}