The Concept of Universal Basic Income

Universal Basic Income (UBI) has become a hot topic, especially in uncertain economic climates. The idea is simple yet profound: a monthly stipend to help meet basic needs, ensuring that no one is left behind, regardless of wealth. This novel approach gained momentum in 2019, largely due to former presidential candidate Andrew Yang’s campaign that popularized UBI in the United States.

GoodDollar: A Crypto Solution

Diving into the depths of decentralized finance, GoodDollar has arrived. Launched by the trading platform eToro, this non-profit initiative seeks to provide a digital basic income through innovative crypto strategies. Yoni Assia, eToro’s founder, believes this initiative is a necessary renovation of current economic systems plagued by inequality and opacity.

Why UBI Needs Renovation

Assia is not just kicking tires. He emphasizes the widening gap between the rich and the poor as one of the banking system’s biggest failures. In his words:

“There are two reasons for that: one, is the level of inequality that is driven by how the system works…The second is the lack of transparency around how money is issued, used, and being moved.”

The Mechanics of GoodDollar

So how does GoodDollar plan to shake things up? By leveraging proven systems like yield farming. As Anna Stone, the head of Go-to-Market, elaborates, the G$ token is backed by a reserve that promises genuine monetary value from day one. This reserve grows through yield farming and other decentralized finance practices. Instead of merely benefitting the wealthy, this initiative focuses on creating a stable income source for everyone involved.

The Role of DAI and Compound

At the outset, GoodDollar will incorporate DAI as its first support asset. Tomer Bariach, head of product and token design at GoodDollar, highlights how DAI’s stable nature makes it an ideal reserve currency. Coupled with Compound, a protocol that has seen over $600 million in assets staked, GoodDollar strives for a robust economic foundation.

Inspiring Support for UBI

GoodDollar’s design was partly influenced by a University of Oxford study highlighting that 71% of Europeans favor UBI, especially after enduring a global pandemic. With growing support for this safety net, GoodDollar is poised to make a significant impact in the world of digital finance and economic equality.