Frequently Asked Questions

What is SaveCircle?

SaveCircle is a community-driven integration where needs and demands meet smart contributive savings, cancelling out the daily interest rates and charges posed by traditional banking systems while maintaining control, flexibility, and a feasible planning system over your funds.

How is SaveCircle better than traditional banks?

• Blockchain integration: All transactions are recorded on-chain
• High security: Protected by smart contracts
• No charges: Zero interest rates and banking fees
• Flexible planning: Feasible and customizable savings system
• Global access: Accessible by anyone, from anywhere in the world

What is the DAO?

DAO stands for Decentralized Autonomous Organization which runs on blockchain technology (Ethereum blockchain under Starknet), where decision-making and governance are carried out collectively by its members rather than a central authority, giving free reign to decisions and votes placed by everyone in the system.

What's the use of DAO in SaveCircle?

SaveCircle operates as an investment DAO where members contribute their funds collectively to start savings accounts and accumulate assets, instead of using traditional venture capital firms with a small team of decision-makers.

How does DAO apply in SaveCircle?

1. Governance: Members vote on how contribution groups and funds are allocated (startup amounts, locked amounts, DeFi investments, NFT acquisitions, or supporting early-stage startups)
2. Execution: Investments are carried out via smart contracts, ensuring transparency, security, and automation
3. Returns: Profits are distributed back to members, often proportionally to their contribution or individual groups

How are group votings and quests carried out?

• On-chain voting through Governor contracts
• Off-chain proposals with Snapshot, then executed on-chain by multi-sig
• Quests on Zealy, Galxe, and TaskOn to earn NFTs and other badges

What are Locked Funds in SaveCircle?

Locked funds are the amount each participant deposits when joining a savings circle. These funds act as both a commitment guarantee and serve as a penalty pool if defaults are encountered during the circle. Note: All funds are returned if no issues are encountered during payment.

How do Locked Funds work?

1. When you join a group, you deposit the required amount (e.g., 10% of the total cycle amount upfront)
2. This deposit is held as collateral in the locked balance under your wallet address
3. These locked funds are used to determine payout position and serve as a commitment guarantee and penalty fee if default is found during payment

Why are funds locked instead of paid weekly by hand?

• Guarantee: By locking upfront, members prove commitment, reducing risk of defaults
• Automation: Penalties are deducted automatically from here
• Fairness: Everyone has "skin in the game," making the group more reliable

Can I withdraw my locked funds early?

• Locked funds cannot be withdrawn until the savings circle is completed
• Early withdrawal or quitting may result in penalties, which go into the Penalty Pool
• Once the circle ends and all obligations are met, you can reclaim your remaining locked balance

How do locked funds connect to reputation?

• If you complete all contributions, your locked balance is released and your reputation score increases
• If you default or quit, part of your locked funds is slashed as a penalty, lowering your reputation

What is the Insurance Pool in SaveCircle?

The insurance pool is a safety mechanism implemented to protect members and their funds from defaulting members during a contribution circle. Each participant contributes 1% of their contributioninto this pool at the start of each savings cycle.

How does the Insurance Pool work?

• If a member defaults during payments or drops out, the insurance pool automatically covers part of the shortfall so the payout can still be fairly distributed
• If nobody defaults during the entire cycle, the pool is considered "unused." A small percentage based on the total pool amount is taken as a maintenance fee for the protocol, and the remaining 80% is distributed back to the members in that pool

Why is the Insurance Pool important?

It reduces the risk of loss while increasing commitment and credibility of members, ensuring the contribution circle can continue moving even if one or more participants fail to meet their obligations. Essentially, it builds trust by offering a financial cushion against unprecedented falls.

What is the Penalty Pool in SaveCircle?

The penalty pool is a system where users who miss out on contributions, pay late, or withdraw early are penalized. These penalties are deducted from their locked balance and pooled together.

How does the Penalty Pool work?

• If you default (miss your turn to contribute), a portion of your locked funds is taken as a penalty
• These penalties accumulate into the penalty pool and can be redistributed among compliant members or reserved by the system
• This discourages careless behavior and ensures fairness for those who stick to the rules

How is the Penalty Pool different from the Insurance Pool?

• Insurance Pool: Proactive safety net funded by everyone (1% contribution) to protect against defaults
• Penalty Pool: Reactive punishment funded by defaulters and late contributors as a consequence of their actions

Why is the Penalty Pool important?

It encourages discipline and accountability within the circle. By knowing that late or missed payments come with financial consequences, members are more likely to stay committed.

What is Reputation in SaveCircle?

Reputation is a systematic way to accredit ranking and commitment of users to pools they were once part of or are currently part of. The reputation works on the Proof of Work (PoW) mechanism using growth level and repayment of contributions during a circle.

How does Reputation work?

The reputation system runs as a progressive change based on in-app activities. Your reputation is calculated from:

Activeness + Locked Amount + Account Type + Repayment/Contribution Time + Circle Participation + DAO Voting + Post Commitment + Task and Quest Completion = Reputation

Simply put, in-app activities and account health are strong ways to build reputation.

What are the benefits of Reputation?

Building reputation in SaveCircle grows your level of trust, credibility, and feasibility, making it easier to access other strong services. The SaveCircle reputation system rewards highest and consistent streaks with an in-app NFT on the Starknet network, making it possible to lend, borrow, and repay funds using those NFTs.

What is Reputation NFT?

This is a Proof of Stake (PoS) NFT that runs on the Starknet network, used as an in-app tool in SaveCircle. It's powered by reputation and streaks earned from app activities: lending, borrowing, contribution, repayment, and streaks. It serves as a valuable asset and collateral for requested funds.

Uses of Reputation NFT in and out of SaveCircle

• Serves as collateral for underlying assets being collected
• Can be sold in the future as prices become stronger
• Can be used to pay off pending debts
• Over time, SaveCircle reputation NFTs will be used in other places