GoodDollar: Using Crypto and DeFi to deliver a universal basic income
Universal Basic Income (sometimes also referred to as Unconditional Basic Income, or UBI), has been top of mind for me for some time now, and I recently authored a post highlighting the work of the Refugee Integration Organization (RIO), who has launched a project to provide UBI to refugees via Celo cryptocurrency.
Today, I want to look at another, broader UBI project making use of cryptocurrency: GoodDollar. GoodDollar was founded in 2018 by Yoni Assia, the Founder and CEO or popular trading platform eToro. They are “non-profit organization on a mission to leverage new blockchain technologies to deliver a scalable, sustainable model to deliver basic income.”
How does it work?
Similar to social impact bonds or endowments, GoodDollar uses interest made from principle invested by users to fund its basic income program. Essentially, GoodDollar stakes the contributions of users in DeFi protocols such as Aave or Compound, which generates interest which is then distributed back to the community via their GoodDollar token (G$). G$’s are released daily to users, who can claim them every 24 hours and, essentially, receive a small daily basic income.
GoodDollar’s UBI system operates on the Ethereum blockchain and Fuse.io side-chain, and the G$ token is an ERC-20 token. The G$ token was first released to the public in September 2017, and to date, approximately $168M has been claimed by 238,000 users.
Aside from country eligibility, there is no other eligibility criteria for GoodDollar, unlike most UBI programs which focus on certain marginalized or underserved populations. GoodDollar, on the other hand, allows anyone with an internet connection to sign up for a GoodDollar wallet and start claiming a small daily income.
The role of crypto and blockchain in future UBI projects
UBI has gained a lot of steam around the world lately, as many countries have pondered the idea of implementing UBI as a way to replace outdated social welfare programs with one that provides greater agency to beneficiaries and is more cost-effective. COVID-19 has only increased the momentum as governments urgently attempted to put in place adequate supports for those adversely impacted by COVID-19.
Looking forward to the future, it is hard to say where GoodDollar will be, although momentum behind the project is strong, and it recently received $1M USD in support from eToro. Regardless of whether GoodDollar becomes a prominent UBI platform in the future, it is an exciting project that demonstrates the potential of blockchain and crypto to play a massive role in future UBI projects.
A UBI program that makes use of Smart Contracts to distribute income at a regular basis could be a game-changer if implemented at a large scale. Whether implemented by a government for all of its citizens, or an international NGO for marginalized populations, a blockchain-based UBI system would prove to be secure, reliable, and transparent, and could be easily accessible to everyone, especially those that don’t have access to a bank account or traditional financial instruments.
I’m a firm believer that UBI will be a common policy in the future, especially with the growing automation of jobs (which could include as many as 800M jobs being automated by 2030), and the need for more efficient and effective social programs. I am also a firm believer that when we get to that point in the future, blockchain and cryptocurrency will play an essential role in the delivery of these UBI programs.
For more information on GoodDollar, you can check out their white paper here, and a UBI position paper they published here.
What role do you see blockchain and crypto playing in the implementation of UBI programs? Tweet us at @Crypto_Altruism, we’d love to hear from you.
