The idea is 90 years old
Wörgl, in Austria, had about 4,200 residents during the Great Depression. In the summer of 1932 its mayor tried something new: local notes that lose value unless a stamp is bought.
Mayor Michael Unterguggenberger issues local notes. Each one loses 1% of its value every month unless its holder buys a stamp.
Mayors from about 170 towns attend a briefing in Vienna.
The central bank and the courts end it, because only the national bank was allowed to issue money.
Holding a note cost money, so people spent it. The stamp fees, and taxes paid sooner, helped the town pay for public works. The notes were backed by ordinary schillings held on deposit, and the works were also funded by subsidies and a provincial grant.
The experiment was banned, not disproven. The evidence is thin: one small town for thirteen months.
Sources: Wörgl and Demurrage (currency) on Wikipedia, Wörgler Schwundgeld (German Wikipedia), Free Money Miracle (Mises Institute) and The end results of the Wörgl experiment (Beyond Money). The 170 mayors, the schilling backing and the subsidies come from the last two.
The same idea, on NEAR
- The town pot pays people. Payouts approved by the governor, usually a DAO, do this. This testnet demo also has a test faucet that gives each account 100 coins.
- People spend and trade. Holding costs something, so there is a reason to use coins.
- Everything melts back. Every balance loses 1% on a fixed schedule and the loss returns to the pot.
There are no stamps here. In 1932 holders bought a stamp each month. On NEAR the loss happens by itself, every second, and the contract does the sums.
The governor decides who gets paid. The contract decides how much can be paid.
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