Every trust connection in Circles has a direction (“from” and “to”). But to make sure a fake account won’t drain your balance, trust connections also limit the amount of Circles tokens you can spend with a connection. Once you reach this limit, you can’t spend any more Circles tokens with this connection, until the sender has more Circles tokens on their account.
In a healthy Circles economy, with a rich web of authentically trustful connections, we won’t reach these limits very often - though it may still happen from time to time.
Trust limits also protect you from losing all your own tokens through transitive transactions. This can happen when someone uses your tokens to send Circles through you to someone else.
A trust limit is the percentage (0-100%) of your Circles supply that you are willing to hold in a given person’s tokens. Example: I trust you 50%, which means the amount of my own Circles tokens I hold since I signed up is 100, therefore I am willing to hold max 50 of your tokens.
The current default limit is always set to 50% which is very high, and we might lower it in the future, or cancel it completely.