---
title: Circles Coop
date: '2026-04-14'
draft: false
description: "A cooperative local economy pilot using a blockchain-based UBI coin, which shut down due to insufficient funding."
status: failure
tags:
- co-op
- crypto
- failure
external_url: https://circles.coop/
image: /img/logos/circlescoop.png
banner: /img/banners/circlescoop.png
author: "Tara Merk"
---
### Summary

Circles Coop was a German cooperative running a blockchain-based UBI pilot in Berlin, aiming to build a community-stewarded local economy. Despite successful community organizing and local market events, the project shut down in 2024 after running out of funds to subsidize business adoption. This demonstrated how financial sustainability can undermine even well-designed community governance experiments.

### Motivation and Readiness

The core motivation underlying the wider Circles project is to showcase and advance the effectiveness of blockchain based universal income based on trust (in the form of a social graph of users vouching for each other in the system). Furthermore, many members of the Circles pluriverse (a term used within the ecosystem to describe the various organizations and stakeholders involved in the wider Circles project) were interested in practically advancing more equitable, anti- or post-capitalist economic models. Members included many early, idealistic blockchain adopters (including people working in the industry on projects such as MakerDAO or Consensys), which led to the technology becoming central to the Circles project.

After the initial launch of the CRC in October 2020, which was accompanied by several technical difficulties but also relatively fast adoption by cryptocurrency users (more than 20.000 accounts registered in the first week alone), Circles Coop e.G. was initially formed from members of the Basic Income Lab eV, who wanted a more democratic organizational structure going forward. The Circles Coop included people from the platform cooperativism ecosystem, activists and hackers from the peer-to-peer technology community. The pilot was launched with the intention to demonstrate the potential of a community stewarded local economy. To achieve this, of course the pilot had to be stewarded by local community. This constitutes the main motivation for the E2C.

### Process and Tensions

The main tension in the roll out of community governance was the strong reliance on the subsidiary program. The subsidiary program aimed to incentivize more businesses to join the Circles ecosystem in Berlin by allowing them to exchange CRC for a fixed amount of Euros each month. The rationale behind the subsidy program was to enable businesses such as farmers and local producers to join the pilot without bearing the economic risk from accepting a new currency backed by novel, experimental technology. The funding for the subsidy programme came from Martin Koppelmann is listed as the project’s initiator and is also the founder of Gnosis, a blockchain company based in Berlin.While the incentive worked to onboard various businesses, it unfortunately did not achieve the desired effect of creating a critical mass of closed loops within the Circles economy.

After almost three and a half years, the Circles Coop ultimately ran out of funds to continue the subsidiary program and sustain itself, thus leading to the Coop needing to shut down and end the Berlin pilot. Within the Coop Handbook, summarizing the activities and key learnings gathered by the Coop throughout its time, the financial stress that resulted from the need to continue providing subsidiaries without having a clear revenue model in place , is cited as a key factor contributing to the Coop continuously functioning in a ‘state of emergency/ urgency’ which limited the teams ability to conduct better long term and strategic planning. Underlying this tension was also the Coop’s continued dependence on a single funder whose interests it had to cater to and which were difficult to reconcile with the interests of the members of the cooperative. As such, this case highlights the tensions that can arise for cooperatives from relying on external funding.

### Results

The pilot succeeded at showcasing what community stewardship of local economies using blockchain based currency might look like, yet it failed to grow to the extent that the local economies would become financially self-sufficient. While the Circles Coop and with it the Berlin pilot closed down in January 2024, after subsidies ran out, the CRC infrastructure, built open-source on Gnosis chain, remains intact and will continue to be maintained by the Gnosis team. While Poetic Technologies UG, which was founded by Circles Coop members retains the [joincircles.com](http://joincircles.com) website, all other project assets were transitioned to Gnosis. Gnosis has used these assets to create an updated version of the project. The smart contracts were upgraded to support the Circles V2 (CRC) cryptocurrency and the wallet infrastructure is integrated in the Gnosis Wallet, which supports Circles V2.

### Sources

- [The Circles Coop Handbook](https://joincircles.net/wp-content/uploads/2023/07/EN_Handbook_coop_0723_online.pdf)

- [Papadimitropoulos V and Perperidis G (2024) Universal basic income on blockchain: the case of circles UBI](https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2024.1362939/full)

- [Website](https://joincircles.net/)

- [Whitepaper](https://handbook.joincircles.net/docs/developers/whitepaper)

- [Circles Coop closing announcement](https://x.com/CirclesUBI/status/1785305562462494741)

- [Circles Coop final report](https://circles.coop/wp-content/uploads/2024/02/Coop-Report_2501.pdf)
