Circles v2 Launches Fairer Alternative to Centralized Identity-Driven Distribution Schemes

Circles v2, a refined version of the Circles project, has been launched with a renewed mission to create a fairer alternative to centralized identity-driven distribution schemes. The project, which originated from the Gnosis Chain orbit, aims to build a more egalitarian money system. Unlike traditional cryptocurrencies such as Bitcoin, where early adopters gain an irreversible head start, or Worldcoin, which promises global coverage while reserving massive allocations for insiders and investors, Circles maintains balance by design.

Circles v2 operates under four simple rules. Universal access allows anyone to join and mint currency once they receive trust from three existing users, eliminating the need for biometric scans or privileged entry. Distributed issuance ensures that every human mints one CRC per hour, creating a continuous and equal flow of new money without insider or early adopter advantages. Demurrage applies a 7% annual decay on all balances, encouraging spending over hoarding. The Rule of Trust restricts transactions to users connected by mutual trust links, making the system socially curated and resistant to bots or Sybil attacks.

With v2, Circles addresses two of its biggest historical shortcomings: usability and liquidity. A new Metri wallet, built on the same technology as Safe, brings a modern, mobile-first interface that feels more like Venmo or Revolut than a Web3 science project. Users can browse trust connections, join local groups, and spend or trade their Circles. New functionality allows users to optionally back their personal Circles tokens with stablecoins via decentralized AMMs like Balancer, creating market-based price discovery for what was once a purely social currency.

Circles builds organically through a web of social connections. To begin transacting, a new user must be trusted by at least three existing users. With over 100,000 historical accounts from Circles v1, new adopters can bootstrap into existing networks quickly while maintaining the project’s local-first ethos. Groups are collections of users who can co-mint, coordinate spending, and set shared policies. Groups can now issue their own sub-currencies backed by pooled CRC and even assign real-world goods or services to these tokens.

For example, in early pilots, local vendors in Berlin and Bali accepted Circles for groceries, drinks, and services. These group dynamics provide a decentralized scaffolding for what similar projects like Colu once tried to do: bootstrap hyperlocal currencies for urban neighborhoods. Unlike Colu, which subsequently pivoted away from crypto entirely, Circles doesn’t rely on grants or external incentives. It’s designed as a self-sustaining network rooted in personal issuance and mutual trust.

There’s also no VC backing or OpenAI distribution potential, something which Martin Köppelmann, co-founder of Circles, likes to see as a strength. “In Circles, there is no owner of the protocol, no team or investors that get 30% of the whole thing — that does not exist,” he said. At a time when Worldcoin has reignited global debates over digital identity and data privacy, Circles quietly offers an alternative — one without privileged insiders, biometric scanning, or opaque governance.

It’s going to be an uphill slog — bootstrapping liquidity, navigating UX hurdles, and scaling trust networks are thorny challenges. But, in a sense, Circles v2 is a provocation to the broader crypto ecosystem: What if currency wasn’t about scarcity and speculation, but abundance and participation?