i dont really have the time (or coding skills) to do this.... so i'll just describe the issue (having reread the docs for a second time just moments ago).

It's kinda simple. Circles is not 1 currenc, but a galaxy of many currencies, each currency associated with a person 1/
ok. great. but why is that important?

because it means that Circles currencies have all the same rules as of every other currency ever created.

Circles are pegged 1:1 vs each other:
2/
But here is where it gets tricky. All currencies in Circles 1) have fixed supplies and 2) are not *actually* of the same value. The graphic on the splash page hints at this, but i think they mean "more valuable [because you can spend it more places]."

3/
but also, that makes them *just more valuable*

and thats a problem. VitalikCoin will be *much* easier to spend than leonTheFackCheckerCoin. So Vitalik better not trust Leon, or Leon will trade all his nearly worthless LeoCoins 1:1 for those Legendary Vs.

4/
And now we have a system where the actual value of coins are not 1:1.

So if someone with connected coins trusts you, you should trade all your coins for their coins.

and probably not trust anyone less connected than you (Alice)

or this happens:

5/
But can the system use "its kinda annoying to trade them outside the system" to maintain an economically irrational peg?

idk...

but i doubt it.

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More from @scott_lew_is

21 Jul
At @defipulse, we will be formalizing a long informal rule as we continue to refine Total Value Locked(USD) to reflect the realities of the DeFi ecosystem. No one knows what DeFi will eventually look like, and as the ecosystem matures, Total Value Locked will mature with it./
Total Value Locked (USD) includes the value of tokens that are providing utility to protocol users and will continue to exclude the value of tokens staked to unlock a privilege within the protocol, like governance participation or rewards./
When we launched @defipulse staking rewards and governance locked were not yet features within our ranked protocols, so there was no need to address these edge cases.

We feel this decision best maintains Total Value Locked's focus on users and their decisions to trust DeFi./
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