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Can Universal Basic Income (UBI) built on blockchain through Dapp Pocket be realized?

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Can Universal Basic Income (UBI) built on blockchain through Dapp Pocket be realized?

Dear DeFi enthusiasts,

This week, CirclesUBI has launched a new decentralized universal basic income (UBI) system, aiming to achieve the positive concept of UBI through blockchain technology. In this week's newsletter, we will discuss this system.

Other headlines for this week include: the launch of the investment dollar stablecoin and the first stop of DeFi developed by the Taiwanese team Cappuu; Andre Cronje issuing the token LBI to eliminate arbitrage losses and generate transaction fees; and Synthetix initiating the second phase of Optimistic L2 scaling solution testing.

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This week, the elders have selected opinions from Hayden of Unuswap expressing his concerns about CirclesUBI; Kain from Synthetix addressing the community's worries about Synthetix's autonomy; and RSA from Bankless calling out blockchain projects claiming to be Ethereum killers: you've got the competition wrong!

1. Our View

Can Universal Basic Income on Blockchain be Achieved?

Universal Basic Income (UBI)

Universal Basic Income (UBI) has been a topic of discussion, particularly during the U.S. presidential campaign where Democratic candidate Andrew Yang, who is of Taiwanese descent, advocated for it. The concept involves the government providing a regular, unconditional income to all citizens, allowing individuals with talent and the ability to create value to pursue further education and develop their strengths without the worry of basic sustenance like working in restaurants. The main opposition comes from concerns about where the government will source the necessary budget.

UBI on Blockchain - CirclesUBI

Now, a new project by Gnosis founder Martin Köppelmann called CirclesUBI is bringing this progressive policy back into focus using blockchain technology. CirclesUBI allows individuals to issue their own currency called Personal Coin, which gains value through mutual trust among community members. As a UBI system, upon joining, each member continuously mints their Personal Coin and receives a 7% annual inflation rate. People who know each other can agree to set a fixed exchange rate of 1:1 between their coins, signifying mutual recognition of each other's existence.

For example, if Carol and Alice agree to exchange their Carol Coin and Alice Coin, and Alice can also trade with another member, Bob, then Carol and Bob's Personal Coins can also be exchanged at a 1:1 rate through Alice as the bridge.

The Power of Community

In addition to decentralization and distribution controlled by smart contracts, CirclesUBI has designed several highlights to realize the UBI concept. Firstly, it addresses the issue of government budget allocation, as blockchain airdrop mechanisms can create currency without additional expenses, and CirclesUBI does not require asset collateral. Secondly, CirclesUBI aims to be inclusive, allowing anyone to participate with just an email address to create an account, without requiring extensive blockchain knowledge. Most importantly is the mutual recognition system: if CirclesUBI were to airdrop the same currency to everyone, the community might struggle to understand its value; instead, each member is certified by the community, ensuring that the Personal Coin in circulation is recognized and valued.

Brain Coin

If I were to join CirclesUBI today, according to the system's rules, I would first need to find three members willing to certify me. Assuming I find these three people from my social circle, upon successful entry, I create my own Brain Coin through CirclesUBI. If I wish to use these coins to purchase goods from a stranger, I have a few options:

  • If the person is not a CirclesUBI user, I introduce the system to them and convince two others to certify this user to activate their account, after which I can transact with them using Brain Coin.

  • If the person is already a CirclesUBI user but we do not have a mutual connection, we cannot transact unless we mutually recognize each other.

  • If the person is a CirclesUBI user and we both have recognized a few common friends, we can transact directly.

Concerns with CirclesUBI

While the concept is idealistic, CirclesUBI still faces concerns, primarily regarding what happens if someone creates a thousand fake accounts. To address potential fake account attacks, CirclesUBI has proposed a solution. As others who have only recognized the main account cannot accept coins from smaller accounts, an individual with multiple small accounts can only trade within their own accounts and can only transfer out what the main account balance allows.

Other concerns include the difficulty of finding certifiers for new users, which currently relies on the official Telegram group, and issues with user interface clarity and inadequate private key security.

Conclusion: A Unique Social Experiment

It is challenging to draw parallels between CirclesUBI and past projects, as the community-certification model is already rare, let alone combined with the UBI concept. While there are some similarities with the once-popular Pi Network in terms of community faith driving its listing on exchanges, CirclesUBI's goal is more akin to Bitcoin's "community self-recognition, social contract token." Therefore, its potential for success remains uncertain. Nevertheless, a decentralized, unregulated UBI is highly anticipated.

2. Highlights of the Week

✨ Top Headlines of the Week

Cappuu: The First Stop for Investing in USD Stablecoins and DeFi

Cappuu is a DeFi investment aggregator designed for the general public. Through a partnership with Circle, users can directly purchase USDC using a credit card, making it convenient for everyone to buy USD stablecoins. It also allows easy investment in curated DeFi platforms like Idle and Yearn to earn interest without complex operations, ensuring asset security.

Gnosis Founder Announces New Universal Basic Income Project CirclesUBI

Prediction platform Gnosis founder Martin Köppelmann announced a new project, CirclesUBI, described as "universal basic income on the blockchain" or "better money": a voluntary basic income plan without government intervention; completely decentralized money that is fair in value exchange over time and space; a mutual credit system with default credit limits allowing for interchangeable credit, and more.

Andre Cronje Introduces Token LBI to Eliminate Arbitrage Losses and Generate Trading Fees

Founder of yearn.finance, Andre Cronje, designed a new token model and launched the liquidity token LBI to eliminate arbitrage losses through liquidity governance. Cronje states that the project aims to generate as many trading fees as possible while minimizing arbitrage losses. The project is currently in the experimental phase, and Cronje notes that these contracts are for research purposes only and not for other uses.

Synthetix Launches Second Phase of L2 Scaling Solution Optimistic Testnet

Synthetic asset platform Synthetix announced the launch of the second phase of the Ethereum layer-two scaling solution, Optimistic Ethereum testnet. In this stage, Synthetix and Optimistic are attempting to migrate from L1 to L2 and expand the number of users who can participate. Synthetix DAO will continue to provide 50,000 SNX weekly as staking rewards for participating in the Optimistic Ethereum testnet.

🚀 DeFi Protocols

🛠 Liquidity Mining

💵 Stablecoins

🏛 Regulation

👻 NFT

💰 Funding

3. Insights from Industry Leaders

Uniswap Founder Hayden: The concept of CirclesUBI is cool, but...

Synthetix Founder Kain: Synthetix community governance does not mean we will stop innovating

Bankless advocate Ryan:

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