Siddharth Sthalekar gives a teaser on the 45 Genesis Entrepreneurs kicking off Sacred Capital’s app ecosystem, and talks about how Gandhian economics inspired the idea of a social fabric for the distributed economy.
In 2010, Siddharth Sthalekar quit his job at Edelweiss Capital heading one of India’s largest equity derivatives and algorithmic trading desks. He gave up this prestigious position not for a more lucrative opportunity at Merrill Lynch or Bajaj Capital, but to volunteer in an ashram. Disillusioned with the culture of consumption and accumulation he saw in the world of finance, he believed our true nature was to build trust and mutual generosity in enduring relationships, but that this natural tendency was stifled by systems that failed to nurture our best qualities.
Sthalekar stayed at Sabarmati Ashram, a former residence of Mahatma Gandhi, for four years. During that time he opened and managed a gift economy restaurant, Seva Cafe, a project that flourished into a collective movement called Moved by Love, promoting “a cultural shift from Transaction to Trust, Scarcity to Abundance, Isolation to Community and Consumption to Contribution.”
Now, Sthalekar is making a comeback into the world of capital markets — in a manner of speaking — this time with a radically different definition of ‘capital’ that reflects the transformation he’s undergone over the past eight years.
His new venture is called Sacred Capital, which he says will be the social fabric for a radically new economy. I caught up with Sthalekar on Holochain’s Mattermost chat server to learn more about the project (conversation edited for clarity and brevity — for those curious to go more in-depth, watch this video).
Q & A
What is Sacred Capital’s ‘reputation interchange’?
Distributed ledgers are enabling people to create their own designs for economies. The reputation interchange is an economic backbone for this distributed world. By allowing one form of wealth to be ‘staked’ for another, we enable their inter-portability while maintaining the essence of the original value.
Think of the interchange as social fabric, not a platform. The intention is to model the surface of a liquid such that ripples of any activity are felt in relevant circles. Through this we could see new forms of value benefiting from a formal economic language. It implies that we can validate, measure, scale and amplify subtler forms of capital – social, cultural, intellectual.
What does it mean to stake reputation?
Think of when a friend asks you to recommend a coffee shop in your neighbourhood. You place your reputation at stake by making suggestions. This reputation is limited only to your suggestions for coffee in this local area (nothing else), and this reputational value is in a non-zero-sum economy. You could recommend things to your friend, to a group of people, maybe even tweet it out to a million people online. The consequences come back to you, but it’s not limited by a material economy.
Where could this be applied? If you were part of a feminist circle, and were known for your nuanced thoughts in the area, you could place your reputation at stake and lend your credibility to a new initiative in another ecosystem. If that were not received well, it would affect your reputation in the original circle.
Traditional apps could also use this to modulate behaviour within their platforms. For example, an Uber-like app could create a reputation for punctuality that could be imported by another rideshare platform like Didi or Lyft. It provides more validity for Uber’s punctuality reputation and helps them create a culture of respect for one another’s time.
Governments could use this to create reputation systems for income, subsidies, contributions in local communities and more. This reputation created by them could be imported by thousands of other apps/entrepreneurs, thereby giving more utility to what the government created. In doing so, Governments don’t need to validate their offering to their citizens purely by traditional metrics like job creation or income increase, they could simply play the role of meta-reputation creators.
How will government-sponsored reputation in Sacred Capital be different from the Chinese Social Credit System, arguably a step towards surveillance-state totalitarianism?
By moving towards an interchange, we foster an open-source approach towards not only the data, but also the benefits that can be designed into this reputation. That means the state is just one of thousands or millions of entrepreneurs shaping culture and thought.
Will Sacred Capital be built on Holochain?
We’ve evaluated all distributed technologies and their founding teams. Holo tops the list at this point, but we’re waiting to see how the ecosystem evolves over the next few months. Apart from the fact that we resonate with the founding team, we believe they’ve built their ecosystem in a truly resilient manner with a long-term approach.
But more than anything, reputation is a form of wealth that doesn’t need a centralised validator – it holds merit purely through the network of people vouching for it. That’s why we think Holochain is best suited to our needs, because they are the only ecosystem enabling distributed data realities. Reputational economics thrives in such a system.
Where are you in the development process?
While we have our reputation economy mapped out, it will undergo several iterations as we open things out to our community. Simultaneously, we will be sparking off our app ecosystem with about 45 Genesis Entrepreneurs who will build the foundational social fabric of our interchange. Apart from that, we have focused on physical/offline interactions (about 5500 people so far) since we wanted the strength of these ties to be robust. We’re now going to translate these ties into virtual interactions and a stronger online presence.
We think the challenge lies in building a thriving ecosystem, not just a product with a set of users.
Who are your Genesis Entrepreneurs and what are they building?
They include institutions (one of them is potentially a government in South Asia), entrepreneurs running Apps, non-traditional definitions of entrepreneurs (people driving movements on social justice, the environment, mindfulness and more.) We haven’t formally rolled out this program yet since we’re fine-tuning a few details.
These entrepreneurs will be building the foundational social fabric of Sacred Capital, so we’re thinking of this as a true fundraiser — people placing seed capital, only it’s reputation at stake, not material capital. That’s pretty exciting because I don’t think something of like this has ever been done.
Can you say more about non-traditional entrepreneurship?
Traditionally, we’ve had very narrow definitions of what it means to be an entrepreneur. Since our past economic paradigms have only scaled material capital, entrepreneurship has been restricted to someone who can scale material forms of value. Other forms of entrepreneurship have had to force-fit themselves upon a one-dimensional plane.
Distributed economies have the potential to broaden our definition of entrepreneurship altogether. There are three broad categories of entrepreneurship this benefits:
- Movement builders, community initiators, social change agents, artists can use these economies to build reputation and benefit from network effects, without having to ‘monetise’ their value.
- Traditional apps that can now modulate behaviour and incentivise beyond just material capital
- Information can flow through networks and create reputation through the process of resonance, a form of amplification without extracting from the original value.
Some of your ideas resemble those of Metacurrency, Holochain’s parent project. Were they an inspiration for you?
The work of the Metacurrency Project has always been an inspiration. When I came across their work I had spent about 4 years at the Gandhi Ashram and was intrigued by the phenomenon of distributed ledger technology.
I remember [Eric Harris-Braun, co-founder of Holochain] saying these technologies aren’t about hyper-efficient money, they’re designed to scale social capital. It’s a phrase that struck a deep chord within me.
It was clear to me. My work lay in integrating my exposure to Gandhian economics with the potential of [distributed ledger] technologies. The distributed economy cannot function or come alive unless we learn how to validate, honour, and construct a collective social fabric.
How would you describe Gandhian economics?
Interesting that you ask this question on Gandhi’s 150th birthday!
Gandhian economics might be best summarised by the works of a senior economist in India, J.C. Kumarappah. His book The Economy of Permanence outlines a broad spectrum of economies that amplify different kinds of value – material, social, intellectual, and even subtler forms like love and empathy. Some of this has been adapted into the classic by E.F. Schumacher, Small is Beautiful: A Study of Economics as if People Mattered.
A more recent version of this can be found in a book by one of my dear friends and mentors, Rajni Bakshi: Bazaars, Conversations and Freedom. She speaks about the 2008 crisis as the result of the separation of the market and society, and the importance of returning to the age-old paradigm of decentralised markets that were woven with our lives. Gandhian economics stresses the importance of society and markets being interwoven, like a Bazaar. Financial transactions could then be evaluated in the context of societal benefit, as opposed to being removed from it.
Rajni Bakshi just happened to write a new article on this topic for Gandhi’s 150th birthday.
How did your experience at Gandhi Ashram influence your current work on Sacred Capital?
After building a career at the forefront of capital markets, I wanted to explore newer paradigms of being. I felt that reducing my ‘fiat footprint’ was critical to this.
While in the ashram, I had the privilege of engaging with tribal, urban and alternative communities that were living radically different realities. In my years in such communities along with my experiments, I was forced to make myself vulnerable to thrive and sustain on social capital. I found this vulnerability sparked off a more resilient sustenance. In a way, I saw the importance of Gandhi’s words coming true – we had to be the change we wished to see in the world.
How do you see current systems of money and finance contributing to world problems, and how do you think a different system should be built?
While the twentieth century built remarkable solutions for material capital, designs for subtler forms of capital are radically different. We now know that the problems of climate change, lack of emotional well-being, and inequity can’t be solved with material capital alone. They require organised efforts to facilitate cultural shifts, re-building social fabric, information sharing and more.
While we’ve perfected the art of yang wealth, we now need systems for yin wealth. An out of balance masculine energy can result in polarisation, dramatic crashes and swings. To restore the balance we need feminine energy, which is responsible for nurturing, sustenance, and harmony. Distributed economies provide this restorative balance.
Why did you choose the name ‘Sacred’? Is there any connection with Charles Eisenstein’s book Sacred Economics?
The word ‘Sacred’ has an intuitive meaning in the name and vision rather than a literal one. Open sourcing economic language would allow us to move away from the binary limitations of money. In doing so, I believe it has the potential to unlock our true potential as humans – to explore our unique individual gifts and develop them.
Charles Eisenstein’s thoughts in person and through his books have been inspiring for me – not so much Sacred Economics, but his later book – The More Beautiful World Our Hearts Know Is Possible. It validates my belief that an economic renaissance is long overdue. The challenge lies in overcoming our own disbelief that it is upon us.
Who is Sacred Capital? Can you tell me more about the team?
Sacred Capital has had a beautiful journey. In the early days, before we even had the name Sacred Capital, contributions were through experiments in the Gandhi Ashram, and a collective known as Moved By Love. A formal structure and name appeared 18 months ago with the growing acceptance of Distributed Ledger Technology. Through this period we’ve been able to prototype radically new economic systems to arrive at the one we hold today. All through this process, we have had close to 50 people from around the world (the West and East Coast of the US, India, London, Southeast Asia and Finland) contributing to bringing us where we are (more about them on our website).
Sacred Capital will be a Programmatic Collective — a network of people plugging in based on requirement and potential. A formal reputation economy will allow us to think of organisations as dynamic and evolutionary instead of static. It is critical that we be the change we wish to see in the world.
Over the next 6 months, we will be crystallising our governance and formally inviting people to be part of this collective. More on this soon!