GoodDollar is a blockchain protocol that draws upon the unique capabilities of decentralized finance (DeFi hereafter) to sustainably mint a basic income token for distribution to a global user network. Governed by the GoodDAO, a decentralized autonomous organization made up of highly engaged members of the community, the protocol is open, scalable and dedicated to the twin goals of bringing hundreds of millions of financially underserved individuals into the digital economy and addressing systemic inequity in the global economy. [1]

The GoodDollar protocol presents a community-driven,distributed framework designed to generate, fund, and distribute global basic income via the GoodDollar token (hereafter “G$”). G$ is an ERC-20 digital asset built on the Ethereum blockchain that operates within the emerging ecosystem of decentralized and open finance. GoodDollar leverages new protocols and smart contracts across the ecosystem to deliver its basic income economy. GoodDollar functions as a wrapper of other protocols, and allows earnings generated in those protocols to be directed to fund the GoodDollar UBI ecosystem. Its flexible design enables it to wrap any DeFi protocol; enabling DeFi users to choose their preferred repository, and to direct their capital towards supporting UBI for all.

Inequality in wealth and income is arguably one of the greatest threats to the future of humanity and has been on the rise in nearly all nations since the 1980s. According to the 2022 World Inequality Report, the product of four years of exhaustive data mining by 100+ researchers across the globe, so-called “trickle-down” economics has proved a failure.[2] The wealthiest 10% of the globe’s population now earns 52% of its income, whereas the poorest 50% takes home just 8% of that total. The gap is even more pronounced when it comes to wealth. Of the world’s total assets, the poorest half of the population owns just 2%, while the top 10% hold three-quarters. This gulf has only widened in recent decades with the rise in the ranks of global billionaires. Since 1995, the share of global wealth in the hands of the world’s billionaires has tripled, from 1% to 3% -- a concentration of riches that increased during the COVID-19 pandemic. According to the report, the wealth of the world’s billionaires swelled by a record amount during 2020.

In recognition of the dangers wealth and income gaps pose to global peace and security [3], the United Nations has singled out the reduction of both poverty and inequality in its 17 Sustainable Development Goals: the first and tenth, respectively[4].

This crisis has triggered fresh enthusiasm to explore new approaches to capital and liquidity distribution. While not a new idea, the notion of a universal basic income (UBI) – a flow of unconditional payments to individuals regardless of means – has emerged as a key policy proposal in nearly two dozen nations over the past several years. This presents a ripe opportunity to explore distributed, bottom-up approaches to basic income, which we believe can advance at greater speed than implementation by governments, as outlined in this white paper.

The concept is straightforward and builds on market adoption of yield farming and liquidity mining to attract and incentivize capital. Every day, a quantity of G$ is minted and distributed as basic income to verified users. G$ token is an automated-market maker - it is backed by a monetary reserve of additional cryptocurrency(ies), and hence, has instant value. The value in the reserve backing G$ is generated by people who deposit capital to decentralized third-party protocols, and direct their earnings to support the GoodDollar ecosystem. As new value is added to the reserve, G$ coins are minted. These are used to: a) pay out liquidity mining rewards to supporters b) pay out G$ to those making daily basic income claims. There is no pre-minting of G$--G$ are minted relative to the value of capital in the reserve. Over time and as more G$ supply enters the market and is adopted, slowly the currency is leveraged and more G$ coins are minted relative to GoodDollar’s reserve. The system is built to accommodate scale, whereby the value and utility of G$ to its holders increases as more supporters, recipients and merchants join the GoodDollar network.

The GoodDollar protocol presents all members an opportunity to vote with their money for a social cause they believe in, and invest in equality. GoodDollar protocol delivers a sustainable flow of free cryptocurrency to people most in need of access to capital and an onramp to the digital economy. The protocol aims to offer incentives to all who hold G$, whether they choose to participate as supporters of basic income or to claim G$ as daily UBI. This fosters a “trickle-up” basic income economy that focuses on wealth creation rather than wealth redistribution. The model creates an economic framework that aligns financial incentives with an accessible distribution method. The goal is a protocol that can successfully incorporate hundreds of millions of financially underserved individuals into the emerging digital economy by giving them access to real digital assets. GoodDollar is able to scale and sustain such a system by leveraging the unique capital infrastructure of DeFi to design a global impact economy governed by its members.This paper sets out the components of the GoodDollar ecosystem and outlines the protocol’s governance structure, which centers on the GoodDAO, a decentralized autonomous organization managed by GoodDollar stakeholders.

[1]Assia, Y., Ross, O., , November 2018 [2] World Inequality Lab, , December 2021 [3] , December 2018 [4] , September 2015

To optimize the utility and impact of the GoodDollar basic income economy, there are a set of monetary tools to manage and modify the protocol. These tools are designed to create a monetary policy that rewards all G$ holders -- a system entirely under the stewardship of the GoodDAO (see Governance). We trust that these controls will be managed by the GoodDAO to optimize the performance of G$ and the GoodDollar impact economy for all stakeholders.

The monetary tools and controls are as follows:

Expansion Rate

This is the leverage rate that determines the market capitalization of G$ relative to the supported cryptocurrency locked in the GoodDollar Reserve. It indicates the annual rate by which the reserve ratio is reduced. For instance, if the expansion rate is set to 10% and the year begins with a reserve ratio of 1, then by the end of the first year, the reserve ratio would be 0.9, 0.81 by the end of year two, and so on ().

Conversion

This is the process that enables users to exchange G$ for CDAI and vice versa. Since the GoodDollar Reserve is essentially an automated market maker (AMM) that works on a bonding curve, the amount of G$ minted or burned depends upon how much collateral is added or removed from the reserve. When user buys G$s, the tokens are minted, when they sell, the tokens are burned. Users who buy G$ receive a matching number of G$X tokens as a reward for their purchases, which can be used to reduce their exit contributions when they choose to sell G$ (see below).

Transaction Fees

The GoodDollar protocol includes a fee structure designed to charge a percentage of the transaction sum on peer-to-peer transactions. Unlike other tokens that enforce flat-rate transaction fees, GoodDollar fees are structured in such a way that users who spend greater amounts of G$ will contribute marginally more to the collective pool, based on the assumption that such individuals have more real-world wealth. While initially the GoodDollar protocol fee will be set to zero, this may be subject to change in future, as we foresee fees being used to fortify the ecosystem or potentially create more basic income for distribution. Any such changes will be determined by the GoodDAO. It is important to note that fees, if and when implemented, will not be used to fund the operational budget of the GoodDollar project or to enrich the team in any way.

Exit Contribution

This is a fee charged to any member of the GoodDollar ecosystem who converts G$ into supported currency by selling G$ back to the GoodDollar Reserve. The seller receives supported currency minus the cost of the penalty, encouraging circulation in G$ and creating a natural tension that reduces the incentive to cash out.

Marketing Referral

To encourage adoption, GoodDollar users are incentivized to onboard more users into the economy. The marketing referral tool is a smart contract that allocates a percentage of newly minted G$ coins to reward users who invite other people to register. The value of this parameter will be decided by the GoodDAO.

Max Supply

GoodDollar will have a max supply of 2.2 trillion G$. This amount was chosen in symbolic reference to the United States Coronavirus Aid, Relief, and Economic Security (CARES) Act that, in March, resulted in a US$2.2 trillion package designed to offer relief for U.S. citizens and businesses from the economic fallout of the coronavirus pandemic [35]. G$ is designed to expand commerce users and, as previously discussed, be widely adopted in key pockets over time. There are several reasons why we believe fixed supply will support GoodDollar’s adoption.

Inflation refers to the decrease in the purchasing power of a currency over time. For example, the purchasing power of US$100 in the 1950s is estimated to be equal to that of US$1,000 today. Therefore, if you had US$100 in the 1950s, you would have been better off spending that money rather than keeping it under the mattress for 70 years, given its gradual loss of purchasing power. Central banks manage interest rates with an eye to maintaining an optimal level of inflation: one that is neither too fast nor too slow. In periods of declining prices -- or deflation -- purchasing power increases over time. Bitcoin, which has a fixed supply of 21 million, is a good example of this; if you owned one bitcoin 10 years ago and stored the private key under your bed, it would be worth multiples of its original value today [36]. This creates a natural incentive for vendors to accept deflationary currencies for goods and services.

However, In order for G$ to serve practically as a coin for commerce in countries all over the world, it must function with relative price predictability. The monetary policy of the GoodDollar impact economy is designed to take this into account. G$ was initiated as fully collateralized by another currency (with a of 1). The currency begins at the highest liquidity level, where for every G$ issued, there is a supported crypto asset backing it in the reserve. Only when G$’s market capitalization grows and it has become widely held and adopted by users will the G$ minted no longer be fully collateralized by the reserve. At this point, price volatility may be introduced, but timed to a point of adoption where it will remain stable enough for commerce. The GoodDollar Reserve will only accept a stable cryptocurrency as collateral. This means that initially the price movements of G$ will mirror those of the stable asset, which are predicted to be minimal. The decline rate of minted G$s is modifiable and will be controlled by the GoodDAO. To reduce volatility, the GoodDAO can elect to limit the reserve ratio. These tools are designed to promote stability in the currency, thereby increasing price predictability.

When the GoodDollar Reserve smart contract has minted all 2.2 trillion G$s, the daily pool of basic income to be distributed to those making claims will come from network fees as described above.

[35] , March 2020 [36] , April 2020

“Basic income is not a utopia; it's a practical business plan for the next step of the human journey.” Jeremy Rifkin, Economist

Until very recently, basic income was considered by most to be a radical concept only embraced by idealists. But by 2020, the notion had made its way from the economic and political fringes to the main stage. The fresh enthusiasm for basic income comes not from a place of utopianism, but rather from a place of pain. While our global economy continues to grow year-on-year, across the world, in poor and wealthy countries alike, millions of people struggle to pay for basic needs and suffer from anxiety and insecurity. The way we have traditionally created growth – through issuance of interest-bearing fiat currency – has institutionalized a system of inequality where wealth does not trickle down.

Politicians, economists and citizens alike realize that existing wealth creation and distribution paradigms that constitute our modern economy don’t – and won’t – work for the majority of people in the future. There is also a growing recognition that economic insecurity for some means a less resilient, less stable economy for all, as evidenced by our modern economic crises. As a result, “trickle-up” economics – our tongue-in-cheek way of categorizing financial policies that push liquidity directly into the hands of people – is at last being taken seriously.

This paradigm shift presents new opportunities to explore different approaches and incentive systems to create more prosperity for everyone, and to prepare us for a better future. If you agree that greater prosperity for all and inequality reduction is a north star that we must aim for, then we hope you agree that what brought us to where we are today will not take us where we need to be.

With the emergence of distributed blockchain technologies, we can advance and build people-powered, bottom-up economies that focus on encouraging growth at the base of the pyramid, for ourselves and for one another. We believe that a people-powered distributed global basic income economy can and will expedite this transformation. With your support, belief and action, GoodDollar’s people-powered decentralized basic income economy can – and should – change the world for the better.

We welcome all feedback and ideas on how to improve this framework for advancing global basic income and building a more equitable world for all.

We would like to express our gratitude to the many people who supported us as we wrote this paper. A special thanks to Oliver Pickup, Amit Baram, Dr. Omri Ross, Johannes Jensen, Dorit Dvir, Paul Chrimes, Liav Gutstein, Omer Levi, Jessica Salama, the eToro team, and countless other members of the GoodDollar community. We also would like to express our appreciation to the many companies whose generosity has enabled us to build the protocol and release this paper, and all of our software thus far, including Latham & Watkins LLP, Fuse.io, FaceTec, Tor.us, Dixtra, Nordwhale, Altoros, QATestLab, Auth0.

Traditionally, the value of a currency is derived from two sources: a reserve of another asset that serves to collateralize and provide a market for the currency; and, secondly, through intrinsic value as a medium of exchange and store of value. G$ coins are backed by a reserve system (the GoodDollar Reserve smart contract) that allows immediate liquidity and convertibility with the underlying assets, and are designed to gain value through user adoption.

The GoodDollar protocol is self-governed by the GoodDAO, a decentralized autonomous organization (DAO) that is composed entirely of GoodDollar community members who hold GOOD governance tokens.

The concept of the DAO is rooted in the earliest development of blockchain and smart contract technologies. Part of the original vision was to enable social organizations to be community-managed by way of a shared faith in computer code that cannot be manipulated or changed (or only under extreme circumstances), and where this transparency and predictability would create new pathways for organization and collaboration.

The GoodDAO’s aim is to give participants in the GoodDollar basic income economy the structure and authority to oversee the management of an indestructible, open protocol that continuously evolves to meet the needs of its users. Key decisions made by the GoodDAO may relate to monetary tools such as the expansion rate, the number of G$ allocated to marketing referrals, and more. Membership in the GoodDAO is determined by the possession of non-transferrable GOOD governance tokens, which allow members of the GoodDAO to suggest, debate, vote on and implement changes independently.

There are two important points to remember about GOOD:

• 1 GOOD = 1 vote.

• GOOD is a non-transferable token and therefore has no market value. The aim here is to safeguard against the wealthiest in the community capturing the lion’s share of power. Since GOOD will be distributed to both those making claims on the system and those staking capital to keep it functioning, the hope is that all interests will be reflected in the governance of the protocol.

White Paper | GoodDollar.org

Authors: Yoni Assia, Tomer Bariach, Tal Oron, Anna Stone Contributors: Hadar Rottenberg, Ziv Keinan, Dr. Nir Yaacobi

The information shared in this whitepaper is not all-encompassing or comprehensive and is strictly for informational purposes only. The primary purpose of this whitepaper is to provide the reader with information about the GoodDollar vision and proposed scheme for global UBI powered by cryptocurrency. Certain statements, estimates and financial information featured in this whitepaper are forward-looking statements that are based on and take into consideration certain known and unknown contingencies and risks which in eventuality may cause the estimated results or may differ factually and substantially from the featured estimates or results extrapolated or expressed in such forward-looking statements herewith.

For more information

Phased Launch - GoodDollar project is launched gradually in two or more phases. The initial phase (“Phase 1”) shall commence on the date of the launch of the project and end at the commencement of the next phase. During phase 1, the availability of the product developed by GoodDollar may be limited in scope as further detailed in the Terms of Use. GoodDollar does not undertake to complete Phase 1 or to continue the deployment of next phases. Furthermore, GoodDollar shall be entitled to cease, freeze or terminate the GoodDollar project at any time and for any reason at its sole and absolute discretion. In the event of termination of the GoodDollar project, its smart contract system may be voided, which could cause Users to lose access to their e-wallet and G$ Tokens. In the event of dissolution of GoodDollar, the cryptocurrencies stored in the Reserve shall be used for the benefit of GoodDollar’s general principles at its sole discretion, and Users shall have no claim whatsoever on the Reserve.

Information Only - This document is for information purposes only. It therefore cannot be accepted or thereby turned into a binding contract. Neither does it offer any warranties, guarantees, or conditions. Except as to the factual representations in this document, GoodDollar Limited disclaims any other representations on the same subject matter, whether written or oral. Given the present disclaimers, GoodDollar Limited does not and cannot reasonably foresee that any party will rely to its detriment on the information in this document, thus foreclosing any claims to detrimental reliance thereupon.

No Initial Coin Offering - GoodDollar is a non-for-profit organization which is funded through direct donations. G$ tokens are provided to users for free. Therefore, GoodDollar is not conducting an Initial Coin Offering. Any funds sent through the GoodDollar protocol will not be used to fund the operational budget of the GoodDollar Limited or enrich the team in any way.

Our Mission: Trickle-Up, People-Powered Basic Income

GoodDollar is an open, people-powered decentralized protocol capable of generating a scalable and sustainable basic income token.

We strongly believe that a “trickle-up” value structure that delivers liquidity into the hands of people is preferable to the conventional trickle-down approach to capital, credit, and interest-bearing money conceived in the 1980s. The GoodDollar economy achieves this by delivering purchasing power directly to users who make daily claims while providing incentives for those whose staked capital is critical to powering the system. Aligning incentives between GoodDollar supply (users who stake) and demand (users who claim), and across all other key stakeholders, is central to the creation of a sustainable, scalable ecosystem around the GoodDollar economy.

This paper outlines the vision for the future of GoodDollar and its many features and functions.

User Experience And Value Flow - In Eight Steps

1. The GoodDollar economy revolves around two primary user actions: claiming G$ basic income daily; and / or supporting its generation by staking capital and earning rewards.

2. Individuals who claim G$ on a daily basis must verify that they are real and unique individuals before they make their first claim.

3. Supporters of the GoodDollar protocol fund the supply of G$ by committing and locking funds (referred to as “staking” hereafter) to various third-party, interest-bearing protocols and mechanisms.

Key Stakeholders

UBI Recipients:

• Claim a small basic income in G$ every day.

• Receive an equal share of the total G$ minted daily.

• Can send / receive and buy / sell G$ coins.

• Encouraged to grow the network via a referral marketing mechanism designed to increase adoption of the G$ coin.

Stakers

• Members of the GoodDollar community who believe in the trickle-up economy.

• “Stake for good” by depositing supported cryptocurrency to third-party protocols or mechanisms via the GoodDollar Trust.

• Receive rewards worth the equivalent of market rates of interest in G$, which is immediately convertible to other cryptocurrencies without financial penalty.

Merchants

• Accept G$ coins in exchange for goods and services. G$ distribution offers the potential to stimulate retail demand in formerly cash-poor communities, if embraced by merchants.

• Conduct marketing promotions in G$.

• Integrate with a “plug-and-play” corporate social responsibility program.

Third-Party Partners

• Include developers of apps, protocols, asset exchanges, vendors, etc. that can be plugged into GoodDollar’s smart contract architecture.

• Integrate GoodDollar functionality that serves either the supply side (e.g. financial services, exchanges, corporate/employee matching programs) or the demand side (wallets, vendors, service providers) of the GoodDollar economy.

Core GoodDollar Team

• Has separate operational and developments budgets fuelled by donations

• Does not have financial incentives or token allocation of G$

Market Demand & Target Market

There are key user and stakeholder hypotheses built into our theory of change and adoption. Ultimately, the success of the GoodDollar economy is contingent upon market demand from both those who support G$ and those who claim it, as the economy itself is a balance between supply and demand.

G$ is designed to gain usage and to be widely adopted as a means of exchange over time. Like Bitcoin, the initial dollar value, or “price”, of each G$ will be low – in the tenths of a cent on the dollar range to begin with. Our belief is that, because it offers free access to an instantly liquid, global basic income network, G$ will first be adopted in markets where smartphone-enabled populations currently live on less than US$10 a day. We believe that, for these populations, G$ could emerge as a useful complementary currency for use in peer-to-peer digital marketplaces as well as for on-the-ground goods and services, particularly as the network grows.

UBI Recipients: Poverty Reduction and Leapfrog Innovation

GoodDollar provides a payments infrastructure and complementary currency designed to unlock global commerce and barter at the cross-section of the mobile-enabled and the financially excluded. Right now, at least 80% of the world’s population lives on less than US$10 a day, while nearly half, or more than 3 billion people, live on less than US$2.50. [20]

According to the World bank, levels of global extreme poverty rose in 2020 after more than two decades of steady reductions. This came as COVID-19 combined with the ongoing forces of climate-linked disasters and conflict to hamper progress toward the goal of reducing the percentage of the population living in extreme poverty to 3% by 2030.[21] That goal lies a long way off given 2020 estimates that suggest more than 9% of the global population, or around 700 million people, live on less than US$1.90 a day.[22]

It is our belief that there is a substantial potential demand for daily payments of “free money”, even at low-value amounts. Of the 700+ million people living in extreme poverty, half are residents of just a handful of countries: Nigeria; India; Democratic Republic of Congo; Ethiopia; and Bangladesh. Importantly, penetration of mobile phones and smartphones in these countries is relatively high and rising. According to the World Bank, nearly 70% of the poorest 20% of households have a mobile phone. Indeed, such households “are more likely to have access to mobile phones than to toilets or clean water”.

Yet, mobile adoption has not translated into financial inclusion. According to The World Bank’s most recent calculations, 1.7 billion adults have no access to traditional financial services, even though one billion of this financially excluded population have a mobile phone and nearly half a billion have an internet connection . Initially, we believe that GoodDollar will be most rapidly adopted and display the greatest impact for the one billion users at this cross-section of mobile-enabled and financially excluded. As we describe in the section on value adoption, it is our assumption that impoverished communities display the demographic and economic conditions to spearhead a “cluster” adoption pattern, a key hypothesis for GoodDollar’s network growth.

As research from the McKinsey Global Institute suggests, these are the same target populations that are poised to become the early adopters of digital financial systems [26] in a repetition of the phenomenon that powered the rapid uptake of digital and mobile money systems across the African and Asian continents. In that case, entire populations leapfrogged the development of traditional financial and banking systems and began using cutting-edge technologies. Notably, there are early indications of this adoption trend in digital assets. Some 13-16% of South Africans and 11% of Nigerians say they hold and use cryptocurrencies, compared to the 5% of U.S. citizens [27]. In these markets, there is less opportunity cost to onboard and adopt new value systems.

“Staking for Good”

By doing so, you will perform a central function in releasing capacity at the bottom of the economic pyramid now untapped due to a lack of liquidity. Economists at PwC project that, when unleashed, this pent-up demand in emerging markets will fuel global economic growth rates in the next century that are twice those in advanced nations, by powering entrepreneurship, commerce and wealth creation [28]. We see GoodDollar basic income, G$, and the entire GoodDollar ecosystem playing a key part in powering this growth engine over the coming years and decades.

Evidence indicates that this demand to “do well while doing good” will only increase as younger generations enter the workforce. Numerous studies show that millennials and members of Gen Z are more committed to helping others than previous generations. And one Sopact report suggests that nearly 7 out of 10 millennials in America are interested or very interested in impact investing [30]. The fallout from COVID-19 has only served to accelerate this trend, as it has so many others. According to a report from Deloitte, more than three-quarters of millennials and Gen Z say they have become more sympathetic to the needs of others, while around two-thirds (67%) express the view that “we are all in this together” [31].

The arrival of a cohort numbering in the tens or hundreds of millions in the digital sphere would deliver similarly dramatic benefits as a result of the network effect, the phenomenon whereby the value of a product or service increases in value the more heavily it is used.[32]

Decentralized finance -- new distributed financial systems based on open smart contract protocols and crypto-specific mechanisms such as staking and automated market making -- has given rise to many of blockchain’s most successful use cases. From 2017 to 2020, more than US$9 billion in value was staked in various protocols, including native staking blockchains such as Tron, Tezos and others [33].

In the Ethereum ecosystem as a whole, more than US$107 billion worth of assets was staked or locked across decentralized finance protocols as of December 2, 2021, a more than 300% increase from the start of the year [34]. We believe that as the decentralized finance ecosystem continues to mature, grow and improve the user experience, capital will flow in greater and greater volumes from traditional finance to decentralized and open finance ecosystems.

[20] Global Issues, , October 2020 [21] , October 2020 [22] , October 2020 [23] , September 2018 [24] The World Bank, , December 2016 [25] , April 2018 [26] , September 2016 [27] , June 2019 [28] , February 2017 [29] , 2021 [30] , July 2018 [31] May 2020 [32] , May 2020 [33] , ongoing [34] , ongoing

[1] Assia, Y., Ross, O., Wealth Distribution Positioning Paper, November 2018 [2] World Inequality Lab, World Inequality Report 2022, December 2021 [3] United Nations Office of the High Commissioner for Human Rights, December 2018 [4] The United Nations, September 2015 [5] The World Bank, April 2018 [6] House of Commons Library, April 2018 [7] McKinsey Global Institute, November 2017 [8] Friedman, M., The Optimum Quantity of Money, 1969 [9] Brookings, April 2016 [10] Financial Times, December 2008 [11] Independent, July 2015 [12] Independent, July 2018 [13] Move Humanity Forward, ongoing [14] Independent, April 2020 [15] University of Oxford, May 2020 [16] BBC, February 2019 [17] Assia, Y., Ross, O., Wealth Distribution Positioning Paper, November 2018 [18] Widerquist, K., The Cost of Basic Income: Back-of-the-Envelope Calculations, December 2017 [19] World Bank, Ongoing [20] Global Issues, Poverty Facts and Stats, October 2020 [21] The World Bank, October 2020 [22] The World Bank, October 2020 [23] Newzoo, September 2018 [24] The World Bank, World Development Report 2016, December 2016 [25] The World Bank, April 2018 [26] McKinsey Global Institute, September 2016 [27] Statista, June 2019 [28] PwC, February 2017 [29] Global Impact Investing Network, 2021 [30] , July 2018 [31] May 2020 [32] , May 2020 [33] , ongoing [34] , ongoing [35] , March 2020 [36] , April 2020 [37] , November 2019 [38] White, O., Madgavkar, A., Manyika, J., Mahajan, D., Bughin, J., McCarthy, M., Sperling, O., , January 2019 [39] , April 2020 [40] , May 2017 [41] , ongoing

Mathematical Equations

Equation 1: Reserve Ratio Equation

Let: $P$ - the price of one 1G$ in Supported Currency; - the amount of Supported Currency in the reserve; - total G$ coins in circulation.

Then - the reserve ratio - is defined as:

In the beginning, nd will be reduced daily according to the Expansion Rate. As can be seen from, given and the system has two degrees of freedom, and that will be calculated as described below.

Equation 2: Buy/Sell Function & Current Price( for Automated Market Making)

Current Price function:

Buy function:

Sell function:

Equation 3: Expansion Rate Formula

Equation 4: Mint G$ from Declining Reserve Ratio - Once a day the reserve ratio is reduced while all other parameters are unchanged.

The GoodDollar Reserve contract mints an amount of G$ to satisfy Equation 1 . If P and R do not change and the daily change in r=𝚫r and the corresponding change in S is 𝚫S, then and from here we can see that:

From Equation 2 we get and thus:

Equation 5: Mint G$ from Deposit Formula - The number of new tokens based on the daily interest deposited in the Reserve.

Z - Value deposited into the reserve

E - Newly minted tokens

The formula does not change the price or reserve ratio:

Monetary Example

This is an illustrative example with no relation to real parameters.

• 10 Supporters have staked a total value of US$10 million in supported crypto to a third-party protocol

• Protocol annual interest rate of 10%

• Daily interest of US$2,736

• G$ Price = US$1

Every day, G$ minting occurs via two methods: the decline in reserve ratio and from the deposit of interest to the GoodReserve.

1. Minting derived from deposite of daily interest to the GoodReserve

   • Deposit of US$2,736 to GoodReserve

   • Calculated as follows:

In total, on that day 16,550 G$ were distributed as basic income to Claimers.

Smart Contract Architecture

GoodDollar launched on Ethereum in September 2020. All GoodDollar smart contracts are written in Solidity and G$ is an ERC-20 compatible token [37]. Transactions using G$ coin are run on an Ethereum sidechain Fuse,which enables low-cost, high-volume transactions. As we anticipate a continual improvement in the scalability and efficiency of blockchain infrastructure, the protocol is designed to be dynamic, flexible, and adaptable to evolve with market developments.

GoodDollar Smart Contracts

GoodDollar Reserve Smart Contract

Also referred to as the “reserve”, this is a smart contract that governs the vault holding the supported cryptocurrencies that back G$ tokens. The algorithm that guides the reserve is based on the Bancor formula, which has been altered to fit GoodDollar’s needs. There are two important characteristics unique to the GoodDollar Reserve:

• The reserve supports the generation of G$. Users can always convert to and from G$ via the reserve.

• The unique math of the GoodDollar Reserve lends G$ exceptional stability.

• The supported cryptocurrencies in the reserve can be swapped in exchange for G$, thereby ensuring the token’s value and liquidity. Users will also be able to receive G$ in exchange for supported cryptocurrency deposited into the reserve. The GoodDollar Reserve will initially hold one type of supported currency, but is capable of holding others, as per the decisions of the GoodDAO. It performs the following functions:

The GoodDollar Reserve performs three different functions important to the GoodDollar Economy: Expansion; Conversion; and Interest Deposits. These are outlined below (for more on the underlying math, please see the ).

• Expansion is the pre-set annual rate by which the token supply increases, thereby reducing the reserve ratio. For instance, if the expansion rate is set to 10% annually and the year begins with a reserve ratio of 1, then by the end of the first year the reserve ratio would be 0.9, by the end of year two, 0.81, and so on ().

• Conversion is the process that enables users to exchange G$ for CDAI and vice versa. Since the GoodDollar Reserve is essentially an automated market maker (AMM) that works on a bonding curve, the amount of G$ minted or burned depends upon how much collateral is added or removed from the reserve. Users who buy G$ receive a matching number of G$X tokens as a reward for their purchases, which can be used to reduce their exit contributions when they choose to sell G$ (see below).

• Interest deposits

GoodStaking Smart Contract

The “accountant” of the GoodDollar economy, the GoodStaking smart contract ensures that value flows as intended, and transfers value to the correct place at the correct time. It performs the following functions:

• Receives each staker’s principal to be staked in supported cryptocurrency

• Sends the principal to the third-party protocol elected by each staker

• Logs the amount of supported currency belonging to each staker

• Receives the collateral token from the third-party protocol

A typical staking transaction would involve sending supported currency to the GoodStaking smart contract, which automatically transfers the funds to the third-party protocol. The GoodStaking contract will create a log of the amount of supported currency that belongs to each Supporter. The interest earned forms the basis of the GoodDollar Reserve.

Stakers receive three different types of reward for their commitment to the GoodDollar mission: financial, governance and social. They are awarded with G$ worth the equivalent of the interest their staked assets generated in support of the generation of G$; they are rewarded with GOOD governance tokens which give them sway over GoodDollar’s future direction; and they are rewarded with Social APY, which is a report on the exact impact their backing has had on the GoodDollar impact economy.

While GOOD tokens are non-transferrable and have no market value, G$ rewards can be held, exchanged for supported cryptocurrencies, exchanged for goods and services on one of several community-led marketplaces, or left within the reserve to support basic income generation.

The GoodDollar Trust

The GoodDollar Trust is actually a collection of smart contracts designed to generate an ongoing flow of money into the GoodDollar Reserve. This group of trust funds, or staking contracts, is capable of “wrapping” third-party deposit-taking DeFi protocols. Each protocol and token has a separate trust fund. For example, Compound DAI is one trust fund; Compound ETH is another; and Aave DAI a third.

Each separate trust fund takes the interest generated by staked assets in the protocol it wraps and donates this to the GoodDollar Reserve, for the support of crypto UBI generation. As a reward for their commitment, stakers have the option of receiving a sum of newly minted G$ tokens. They can either withdraw these tokens, at which point they will be minted, or opt not to, which will serve to support G$ generation.

The Fund Manager

The Fund Manager is a smart contract responsible for several critical processes in the GoodDollar protocol. These include:

• The activation of UBI generation.

• The transfer of interest from the GoodDollar Trust to the GoodDollar Reserve.

• The transfer of funds to the Bridge and onward to the DisCo for distribution to UBI Claimers via the Fuse blockchain.

As with all smart contracts, processes handled by the Fund Manager must be triggered manually. The task of triggering these processes falls to a group of volunteers called “Keepers”. In exchange for instructing the Fund Manager to execute tasks, these users earn rewards as well as compensation for transaction fees incurred during the process. Keepers can also earn G$ rewards for converting the status of verified users who have not made a claim in the past 14 days from “active” to “inactive”. This function is called “fishing”.

The Distribution Contract

The Distribution Contract (or “DisCo”), is a smart contract that handles the distribution of G$ to all addresses verified as belonging to real and unique people in the GoodDollar ecosystem housed in the Identity Contract. The DisCo is responsible for accepting G$ from elsewhere in the system and distributing this to all verified active users who have clicked “claim” in the GoodDollar Wallet app within the preceding 24 hours.

The GoodDao

This smart contract receives the G$ that is minted from the GoodDollar Reserve. It allocates the G$ coins back to supporters, and allocates G$ coins to be given out as basic income. All the monetary tools discussed above (such as the ability to change the expansion rate), along with any that will exist in the future, are controlled by the GoodDAO smart contract. This is where voting by way of the GoodDAO to adjust these monetary tools will occur.

Helper Contracts

Helper contracts are smart contracts that connect the GoodDollar Reserve to other liquidity networks in order to allow liquidity to flow from G$ to any other token that has an automated market maker (AMM). For example, if a user wants to convert token X to G$, the helper contract will first convert token X to DAI using Uniswap, and then convert DAI to CDAI using Compound. Finally, it will convert the CDAI to G$ using the GoodDollar Reserve. Future versions of the protocol may extend this functionality to additional protocols, such as Bancor and Aave.

Key Components

Third-Party Protocols

These are smart contract-based value-generation mechanisms operated by third-party corporations in the field of decentralized finance, unrelated to GoodDollar. By leveraging the open smart contract infrastructure, the GoodStaking smart contract connects to a third-party protocol and executes the staking functions as outlined above.

While the GoodDollar Trust only wraps Compound and Aave currently, it has the capacity to connect to other such protocols, subject to the will of the GoodDAO. Users who choose to deposit capital in support of the GoodDollar mission can select the third-party protocol with which they wish to stake, subject to the terms of that protocol.

Reserve Ratio (r)

The Reserve Ratio (r) is the ratio between the value of the supported currency in the GoodDollar Reserve (R) and the value of the total G$ in circulation (market capitalization)().

Minting of G$

The GoodDollar Reserve mints G$ in two ways: the first is based on new deposits into the reserve, and the second on the designated expansion rate. Every time interest is moved into the reserve, a certain quantity of G$ is printed to keep the price stable (). Minting from the expansion rate is designed to stabilize the price according to the change in reserve ratio and is governed by the annual expansion rate ().

Official G$ Price

This is the price of one G$ in supported currency. G$ is a reserve-based token and the GoodDollar Reserve functions as an automated market maker (AMM) according to an adapted version of the (). The GoodDollar Reserve uses this price to calculate the amount of G$ allocated to stakers as interest, and adjusts the price when supported currency is bought from or sold to the GoodDollar Reserve. The formula has the properties of raising the G$ price when G$ is being bought from the reserve, and lowering it when G$ is being sold back to the reserve.

Social Rewards (social annual percentage yield)

Because staking is critical to GoodDollar’s ability to generate and distribute crypto UBI, it is important to offer a range of incentives to those willing to put up capital to assist the UBI mission. One of those incentives is a unique GoodDollar offering we call Social APY. To show users the power of their contribution, we set out for each user how much G$ will be distributed to the GoodDollar community each year as a result of his/her stake.

Sending/Receiving

G$ coins can be sent to and received from wallets across the Ethereum network. This feature enables the G$ coins to be used as a means of payment and therefore creates more use cases, and hence utility, for G$ coins.

Buying/Selling

A user can send his or her G$ to the GoodDollar Reserve smart contract and receive a supported currency in exchange. Alternatively, he or she can send supported currency to the GoodDollar Reserve smart contract and receive G$ in exchange.

Those who sell G$ to the reserve receive supported cryptocurrency minus a small penalty called an “exit contribution”. Those who buy G$ from the reserve receive a specialized token called G$X, which can be used to reduce any exit contributions faced on future transactions.

Confronting Potential System Abuse

The question of secure and unique identity is critical to whether the GoodDollar system succeeds or suffers abuse by malicious actors. Fraudulent activity is more than an irritant. It jeopardizes the economy’s integrity. Since GoodDollar distributes free G$, it is crucial to verify that each user can sign up only once. Secure digital identification has been considered key to achieving financial inclusion [38]. The simple option is to use government identification or a traditional “know your customer” process, but this is simply not practical if we are trying to reach the 1.7 billion people living “unbanked”, or with no or insufficient access to traditional financial services

To overcome this challenge and to accelerate adoption, GoodDollar has equipped the GoodDollar Wallet – the initial destination for users to sign up and claim G$ coins – with a built-in identity verification process. The app utilizes ’s Zoom 3D to conduct facial verification and video capturing in order to ensure that each person is unique and alive. We believe that in the near future there will be multiple access and endpoints through which users can claim G$ coins. These will all be equipped with embedded identity solutions.

[37], November 2019 [38]White, O., Madgavkar, A., Manyika, J., Mahajan, D., Bughin, J., McCarthy, M., Sperling, O., , January 2019

Growing Clamour For Basic Income

Digital technology has empowered billions of people in the 21st century with vastly expanded access to knowledge and dramatically improved modes of communication. Yet, despite this information revolution and explosion of digital banking and commerce, a large portion of the world’s population remains financially excluded. In 2018, The World Bank calculated that 1.7 billion adults had no access to a traditional bank, even though one billion of these have a mobile phone and nearly 500 million have an internet connection [5].

Meanwhile, wealth inequality continues to grow. The richest 1% of people are on course to control as much as two-thirds of the world’s wealth by 2030 [6]. We are also facing mass unemployment resulting from automation. The McKinsey Global Institute projects that by 2030, developments in robotics and artificial intelligence will have pushed some 800 million people – or one-fifth of the global workforce – out of their jobs by 2030. [7]

Why Basic Income Is Increasingly Relevant

In simple terms, universal basic income is a model for providing every person with an unconditional sum of money, regardless of their employment status, income or resources. It is designed to enable a baseline standard of living and narrow the gap between rich and poor. The concept of basic income is not new; it has been theorized about, in one form or another, for at least five centuries, since it was introduced by London-born Renaissance humanist Sir Thomas More in his 1516 masterpiece Utopia.

The idea of a basic income has risen on the economic agenda in the past few decades, amid growing concerns about inequity in the global financial system. In 1969, the economist Milton Friedman coined the term “helicopter money”, suggesting this as a possible means for increasing aggregate demand [8]. Friedman proposed that central banks could make direct transfers to the private sector without the involvement of fiscal authorities to put more money in the hands of people, a solution former Federal Reserve Chairman Ben Bernanke famously advocated in 2002 as a preventative for deflation, when he was on the central bank’s board of governors [9]. In the wake of the 2008 financial crisis, Martin Wolf suggested that central banks make cash transfers directly to households financed with base money [10], while a growing number of economists and policy-makers have since 2012 made calls for “quantitative easing for the people”, arguing that conventional quantitative easing was adversely affecting wealth distribution.

Proposals such as these no longer seem radical. In recent years, indeed, they have entered mainstream political consciousness. Jeremy Corbyn, when leader of the United Kingdom’s Labour Party, promoted people’s quantitative easing as part of his 2015 manifesto [11]. Three years later, Corbyn’s Labour Party adopted a policy promoting basic income [12]. In the United States, 2020 Democratic presidential candidate Andrew Yang gained a small cult following running on a signature policy of US$1,000 for every American. Since dropping out of the presidential race, Yang has become a high-profile advocate of basic income, and his non-profit to support pilots and political candidates who promote basic income platforms has attracted media attention and millions of dollars in funding [13]. At the height of the pandemic, Spain became the first country to launch a nationwide basic income initiative that will stay in place when COVID-19 restrictions subside [14]. Many others – including Australia, Japan, New Zealand, Germany, Scotland and Brazil – have talked about deploying similar schemes. Basic income’s appeal has never been greater; a May 2020 survey by the University of Oxford revealed that 71% of Europeans now support the concept [15].

Basic Income in Practice

There have been approximately 30 basic income pilots in recent decades. Results from these demonstrate that, across impoverished and wealthy populations alike, basic income increases well-being and happiness, without resulting in reduced commitment to labour and income-producing work [16]. (For more information about the history of UBI and recent pilot projects, please consult our 2018 UBI positioning paper [17].)

Since governments and local authorities have funded most basic income pilots to date, affordability has been regarded as another of the main barriers to implementation. Estimates for the cost of a national basic income vary widely, ranging between 5-35% of a nation’s GDP [18]. However, among basic income advocates, cost is not seen as the primary inhibitor. To these groups, the greater barrier to a government-supported and implemented basic income program is political will, particularly given that any scheme would compete financially with existing social services and cash-transfer programs.

As to other concerns, pilots have so far shown that worries about basic income disincentivizing work are misplaced, while work related to economic measures such as the Gini Coefficient indicate that inequality is reduced even when wealthy people also receive a basic income [19].

There are additional challenges to using traditional organizations and structures to distribute a global basic income to all. These include:

1. How to determine an appropriate amount for global basic income, given differing economic levels and social norms between countries

2. How to develop a new payment mechanism that can reach all participating users directly

3. How to fairly manage and establish an entity that can act as a fund pool and entrusted to collect, store, and distribute basic income.

Perhaps most critically, no international governance or political-economic structures exist at the moment capable of delivering a worldwide basic income initiative.

Distributed digital asset technologies, however, allow us to envision a way forward.

Blockchain Advances Basic Income On a Global Scale

While national authorities grapple with the logistics of deploying basic income to their citizens, the emerging DeFi ecosystem offers a faster, more efficient route. The GoodDollar model for a distributed, people-powered global basic income complements government work while reaching beyond national boundaries. Our vision is to leverage nascent blockchain and decentralized technologies to forge a sustainable infrastructure, according to three core principles:

1. People-Powered Governance: Individuals and/or organizations can participate and collaborate in a distributive, decentralized governing body (the GoodDAO) that manages monetary tools controlling the GoodDollar economy through transparent token ownership.

2. Value Creation and Distribution: Smart contracts enable transparent value creation and transfer, powering a unified system that allows people to generate and receive basic income from various endpoints.

3. Open Innovation: The tools and protocols that already exist today in the emerging DeFi ecosystem mean there is no need to wait for governments to launch a sustainable framework for global basic income.

Ultimately, and with adequate support, we believe that the GoodDollar protocol can become the industry-standard basic income infrastructure. It is worth noting that while we promote a distributed framework for GoodDollar that leverages new tools across the decentralized finance ecosystem, we firmly believe that centralized and decentralized financial systems can co-exist and assist one another. We believe in working with any financial and technology partners that similarly strive to boost financial access and reduce inequality. Through GoodDollar, any individual or organization who believes in the power of basic income can contribute to the cause.

[5] , April 2018 [6] , April 2018 [7] , November 2017 [8] Friedman, M., , 1969 [9] , April 2016 [10] , December 2008 [11] , July 2015 [12] , July 2018 [13] , ongoing [14] , April 2020 [15] , May 2020 [16] , February 2019 [17] Assia, Y., Ross, O., , November 2018 [18] Widerquist, K., , December 2017 [19] , Ongoing

Usability and Distribution: The GoodDollar Wallet

To increase adoption, demand and trust in the system, GoodDollar has built a simple digital wallet that can be accessed anywhere in the world with internet connection.

Accessibility and ease of use is critical to market adoption for GoodDollar. By distributing G$ globally and through an accessible process and interface, we increase the odds that the basic income economy is widely adopted and useful, and strengthen the case for G$ to become a preferred complementary currency.

The user experience focuses on the key action of claiming G$ coins as basic income and on the conduct of peer-to-peer transactions. Users can also earn rewards for inviting other contacts to GoodDollar, send and receive G$, review account transactions, and take part in other economic activities within the GoodDollar ecosystem.