Thread by @alpha_padfoot

1- I'm still trying to wrap my head around @CirclesUBI and how it can positively affect the livelihood of #crypto citizens.

⚠️ WARNING: This is yet-another-thread that I think out loud on financial systems and how can help disrupt. (cc. @koeppelmann for potential collab)

2- Let's start with my _shallow understanding_ of the idea of the Universal Basic Income (UBI):

UBI provides a routine payment to every member in the economy so they don't struggle to keep up with the cost of living. Its goal is similar to welfare, but with a different method.

3- Ideally, this will make sure everyone lives above the poverty line, and thus they'd make better decisions to maximize for long-term well-being instead of making ends meet on the daily basis.

🤞 My interpretation: this will create an economy with a better wealth distribution.

4- In order to (naively) implement UBI in traditional economy would be to:

1) Calculate cost of living and tax money required for paying out the UBI
2) Collect $$$ from wealthy citizens w/ progressive tax brackets + (optionally) print more money
3) Distribute it to everyone

5- There are few effects to this design:

For the poors:
✅ They meet ends needs
🤞 They will produce more output to the economy (resulting from better productivity)

For the riches:
🚫 They pay more $$$ in tax
✅ They benefits from better economy & higher GDP

6- UBI is supposedly bringing a _net-positive outcome_ to everyone.

Now let's discuss @CirclesUBI's idea of the Universal Basic Income.

7- @koeppelmann I'll need your help here to see if my understanding is correct.

@CirclesUBI lets everyone earn a _fixed rate_ universal basic income. The eventual goal is to have such income being valued by the market. They're using "personal token" as the mean to get there.

8- Anyone can start minting their own personal token at globally-predefined rate. Each person in the economy has their own set of trusted payees, whom they choose to believe that the tokens paid are "fungible" with their own tokens -- and thus hold the value as medium of payment

9- To my understanding, Circles' UBI design concerns less about the "intrinsic value" of the money (personal tokens) distributed but more about how people can earn that money is a "fair" manner.

[Ref] 👉 handbook.joincircles.net/about/whitepap…

10- If such money is being distributed fairly, people in @CirclesUBI economy will, some time in the future, come to a conclusion of how much their earnings are worth.

With such "belief", they'll be able to spend the Universal Basic Income received to each other.

11- Such economic design is _very new_ to crypto where we all focus on "intrinsic value" of money first, and fair distribution later.

In most cryptoeconomics, someone've got to pay something to generate value, which will be captured into a token -- then such token has value.

12- IMHO, key question to figure out in order for @CirclesUBI to achieve its goal as UBI is:

❓Given a lack of intrinsic value of personal tokens, there has to be some "market" that the tokens act as a medium of exchange, which will allow price discovery. What are those markets?

13- Once personal token has value -- people should already be using the tokens to exchange goods and services within @CirclesUBI economy.

If people outside of the economy starts wanting to buy products & services, it will increase "demand" for personal tokens & drive more value.

14- Let me try to answer my own question:

From what I see, there are two ways to create a market for personal tokens:
🔵 A) From traditional economy
🟢 B) From within #crypto community

15- Personally I think option A) would be difficult to champion in short-term. Crypto is still far away from getting mainstream adoption, both in the UX and regulatory standpoints.

So I'd focus my frame of thoughts more toward option B)

16- So what could potentially be the products in #crypto space that need a medium of exchange w/ new currency distributed via UBI?

Let's explore some of the options:

17- Since I'm working primarily for , my focus here would be toward #DeFi.

🔥IDEA #1) @CirclesUBI can be used to subsidize gas cost, the crypto-specific-cost most equivalent to the cost of living in real-world.

18- (cont.) Personally I'd put up some -- say $1000 every week for subsidizing any users for their gas cost of interacting with homora.alphafinance.io.

They'd _bid_ their personal tokens to get as gas cost refund. Now personal tokens have tangible values.

19- (cont.) Now I'm chosing to _believe_ that the personal tokens will be spendable in other products, now or in the future.

It's quite a bet, but I'm willing to risk for the network effect that @CirclesUBI can bring to .

20- 🔥IDEA #2) Personal tokens can be seen as a form of "reputation". If a user holds a lot of trusted personal tokens, I'd trust that they're someone who brings a lot of value to the network. As such I'll be more willing to "unlock" some advance features for them.

21- (cont.) Some example of the features we can enable, taking #AlphaHomora as example:
✅ More leverage
✅ More pools to yield farm

By doing so, it incentivizes people to offer products and services more to their peers, and thus generate more value flow in @CirclesUBI economy.

22- These are a couple of ideas that I think @AlphaFinanceLab and @CirclesUBI have room to work together.

To successfully create a UBI, I believe some _external_ values have to be created and offered to those receiving the basic income -- otherwise they'd hold no value.

23- Although @CirclesUBI's offering differs quite a bit from a UBI implementation in real-world economy, it's still very interesting design that I believe can bring a lot of value to #crypto ecosystem.

Let me know if we could work together @koeppelmann. Happy to bounce more.

24- Btw I still need someone to verify my profile.

👉 circles.garden/profile/0x663C…

Much appreciated!