An app to manage friend-to-friend debt

fiatjaf

Tom and Jeff go to a bar, at the end of the night Jeff owes Tom 40 USD.
At the same time, Anna, Tom's sister, and her friend Maria came to town to go to a conference and are staying in Tom's house. Since she forgot to bring money, Anna has borrowed 50 USD from Tom and other 50 USD from Maria.
Two weeks before, Jeff had bought the tickets to the conference to Anna and Maria, because he happens to work near the place that was selling the tickets, for 35 USD each.

At the same time that is it is difficult to keep track of all small (and big) debts and loans we make to and from our friends, it is difficult to settle them, even when you have the money.

I've had this idea in mind for a long time, but I just got to know about the Stellar Build Contest, so let me post it here and see if I can hear some feedback:

The idea is to create an app where people will be able to keep track of their debts and loans with friends, and at the same time issue assets on the Stellar network to represent these transactions and to have circular debts to be automatically settled.

So, in the case above, after the 3 events, we would have the following configuration:

Jeff: has issued 40 USD#Jeff, holds 35 USD#Anna and 35 USD#Maria;
Tom: has issued nothing, holds 50 USD#Anna and 40 USD#Jeff;
Anna: has issued 135 USD#Anna, holds nothing;
Maria: has issued 35 USD#Maria, holds 50 USD#Anna.

Since, however, Jeff doesn't know Maria and has little contact with Anna, he prefers to hold Tom's dollars and Tom is ok with that. At the same time Tom doesn't really know Maria, he prefers to keep Anna's dollars. Also, after transactions Jeff and Tom would be mutually holding each other's dollars, a situation that can be improved by automatic settlement. So we somehow end with something like this:

Jeff: has issued nothing, holds 30 USD#Tom;
Tom: has issued 30 USD#Tom, holds 120 USD#Anna;
Anna: has issued 120 USD#Anna, holds 15 USD#Maria;
Maria: has issued 15 USD#Maria, holds nothing;

which is way simpler.

All that will be possible by letting users easily create trustlines for their friends, from which the system will automatically create offers between their assets and their friends', so they can be market makers for their friends' assets.

To enable adoption there will be a way to create virtual accounts for your friends. If you want to manage debt accounts between you and your grandmother, for example, you can create an account in the site for you and input some verifiable data for your grandmother, like her phone number, Facebook profile, or email. The system will create and take care of her account until she decides to take control of it, at such point it will use the data provided to make sure she is she (you won't be allowed to create debt for her, only credit -- in other words, to send her your dollars).

fiatjaf

Since users of this app will have to keep maybe 100~200 lumens in their accounts (to cover the multiple currency holding/issuing/trading business) I will probably grant them that -- and not let them access their own private key unless they pay me back for those lumens -- or earn it through some referral program (I will give them their public key so they can watch it on the Stellar network if they want).

It is important, however, that some way of preventing throw-away accounts is implemented. I don't know exactly how. Maybe I'll just trash unused accounts every six months.

sacarlson

maybe the debt part can be handled on a centralized server. all your system becomes is an anchor that goes no were but to pay or offer loans to others that have account under your anchor. when John want to loan Marry money say $5 he sends the stellar asset $5 to the anchor to the Marry's account marry*stellardebt.com. as soon as marry get's the loan deposit from John she can pull the money from the anchor and spend it. At some point she can pay back the $5 to the anchor maybe by default not putting any address to the anchor just payall*stellardebt.com will pay off all her outstanding sub accounts loans from all people that she had loan her money from. I guess you would also need to have some priority as who gets paid first in the loan chain if not enuf funds are present to pay all loans yet. Also there should be an interest option so the people that loan money to Marry will receive maybe some minimal payment per month plus interest much like a credit card does. I'm sure there is much more to think about in such a system but just my thoughts at the moment.

BrianGale

As a reference for this kind of debt management between friends. also worth checking out how Splitwise is doing this from a purely UX/UI perspective. This is an app I have been using for a while now between friends, however they are using Venmo to settle. Either way, worth a look.