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GoodDollar’s graduation from Proof of Concept to fully-fledged protocol in the span of just a few months may seem swift. In reality, though, it has taken many years and some major technological advances to turn an idea first conceived in 2008 into what GoodDollar has become: a truly decentralized impact-first economy that can sustainably deliver crypto basic income.
Now that the GoodDollar protocol has shown it is possible to use the dynamism of decentralized finance (DeFi) to generate and distribute digital wealth to people around the world, it is time to take the next step toward maturity.
It is time to hand control of GoodDollar to our community.
In November 2008, eToro founder Yoni Assia sowed the seeds for GoodDollar with a blog post entitled “Good Dollar — The Visible Hand”. Ten years and several blockchain-related breakthroughs later, he charged the GoodDollar Foundation, a UK-based non-governmental organization, with developing an economic framework that could sustainably generate digital currency for claimants all over the planet.
After three years of developing and testing technologies and prototypes, the team launched an alpha version of the GoodDollar protocol in September 2020.
In the months since, the GoodDollar protocol distributed roughly $18,000 (137 million G$) in direct digital basic income payments and, more importantly, built an engaged and enthusiastic community of more than a quarter of a million members living in nearly every country in the world.
The project, which has always focused on empowering people, deserves a public and democratic system of decision-making and governance. The GoodDAO, GoodDollar’s community-controlled governance structure, will launch as part of the V2 Protocol updates. This will allow any member of the GoodDollar ecosystem to impact the direction and strategy of the protocol, its growth, and vote on future changes to the system.
DAOs, or decentralized autonomous organizations, are an increasingly popular governance option in the crypto world, with a raft of high-profile projects choosing to shun traditional corporate hierarchies in favor of distributed stewardship.
GoodDollar members are already making a real difference in the ecosystem: by creating online marketplaces; signing up as GoodDollar Ambassadors to help promote our mission in their communities; and by finding unique ways to use G$ to help those in need. Through the GoodDAO, they’ll have the chance to play an even more critical role–it is they who will be responsible for shaping GoodDollar’s destiny as it seeks to open the digital economy to everyone.
So how is a DAO different from an old-school corporation?
First off, DAOs are governed by the community, for the community. Everything a DAO does is overseen by members, not by a secretive group of C-suite executives who plot strategic direction behind closed doors. GoodDAO members, are, well, members of the GoodDollar community. Members will have the power to vote on all proposed changes, and those with the requisite number of governance tokens (more on that below) can make their own proposals as well.
Secondly, DAOs are inextricably linked to blockchain technology. This doesn’t just mean they work to embody the principles of anonymity, transparency, democracy, and freedom from gatekeepers (although most do). DAOs are actually constructed on blockchains and controlled via smart contracts.
Each DAO’s bylaws—including those that govern spending—are out there for everyone to see, embedded in the code of the smart contract that founded it.
Proposals can address anything linked to the protocol or the DAO. Everything, up to and including spending plans, reward parameters, minting volumes, GoodDollar’s underlying code and the governance model itself, can be altered by a proposal that wins approval.
So how does a DAO member’s idea go from proposal to reality?
That’s where GOOD, our new governance token, comes in. GOOD will have two unique attributes that make it perfect for GoodDollar: Each GOOD token will only ever carry one vote. And your GOOD belongs to you alone. And because it cannot be transferred, it will have a market value of zero.
The reason for this is simple: We want to ensure that those with the power to influence GoodDollar’s future are those who care about the project and its mission, not about financial gain.
Without this safeguard, there is a risk that power will become concentrated in the hands of the few, which would run contrary to everything GoodDollar stands for and perpetuate a pattern all too common in both traditional finance and even in certain crypto projects.
Beyond the initial and ongoing annual distributions of the token, there are only a limited number of ways to earn more GOOD. One is by staking G$ claimed through the app to the GoodDollar Trust. The other is by staking to the protocol (currently, in DAI), which will earn rewards in both G$ and GOOD.
Any GoodDollar community member who controls more than 0.25% GOOD, either directly or through delegation, is entitled to make a proposal related to the project. There is, however, no minimum requirement for voting. Holders of any amount of GOOD can vote on proposals as they arise.
Each proposal stays open for 14 days and is subject to a 3% quorum. This means that if more than 3% of total GOOD tokens are voted in favor and less than 3% voted against, the proposal will be enacted. If support runs below 3%, it will be overruled.
Should the proposal garner 3% yea votes and 3% nay votes, it will then be subject to a relative voting mechanism—i.e. the majority rules. Proposals that gain more than 51% approval will be automatically moved to the countdown period (see below).
Once a proposal passes the quorum stage (or gains 51% support), it moves to a two-day countdown phase, during which voting continues. If there is a dramatic shift in the votes during the last 24 hours of the countdown, another day is added for vote accumulation.
There are two types of GoodDollar community members, both of whom are vital to the fulfilment of our mission: Claimers and supporters.
There are also two key components of the GoodDollar ecosystem that underpin our ability to sustainably generate a crypto token with stability and value: The GoodDollar Staking Trust and the GoodDollar Reserve.
The Staking Trust is an inaccessible vault where staked–or deposited–assets are held, generating interest payments that ensure the protocol can sustainably mint G$. The Reserve is a reservoir of assets that function as an automated market maker to trigger the minting or burning of G$. The Reserve provides essential liquidity to minimize volatility in G$.
During the PoC, the Trust was closed to outside stakers. All the interest-bearing capital it held came from a single seed donation from eToro.
With the launch of GoodDollar V2, the upgrade will open the Trust to anyone who wants to stake assets to support the minting of more G$. Once that happens, eToro will go from being our sole supporter to one of what we hope and believe will be many thousands.
Since GoodDollar is a decentralized impact economy rather than a charity, supporters will earn interest on their deposited assets via such popular protocols as Compound. Should they want to use their earnings to help us increase the amount of G$ we can mint each day, they will also have the option of donating these interest payments directly to the Reserve (where they will be added to the pool of GoodDollars distributed as UBI).
The second important group is the GoodDollar claimers: those tens of thousands of members who signed up for free crypto, and stayed when they saw they’d found an economy that serves them, rather than an economy they must serve. This group has been a wellspring of enthusiasm and innovation, and we can’t wait to hear their ideas for helping the GoodDollar economy work for them.
Since both segments of our community are equally essential to GoodDollar’s success, we plan to distribute GOOD tokens accordingly: 50% for claimers, and 50% for supporters. This will be true for the initial distribution as well as for those that come after.
Initially, there will be an initial distribution of 96 million GOOD tokens as follows (calculations will be based on a snapshot taken at a predetermined point):
· 50% to claimers (individual G$ claims/total number of G$ claims)
· 25% to GoodDollar Trust Stakers (individual G$ claimed/total staked)
· 25% to G$ Holders (individual G$ holders/total G$ supply)
Following this initial distribution, the governance roadmap includes plans to mint an additional 96 million GOOD annually, distributed along the same lines. Why? Again, to make sure that those who care most about GoodDollar’s goals have the greatest sway over its future.
Because active participants will be allocated new GOOD in subsequent issues, and inactive ones will not, those who turn away from the community will find their voting power halved each year, no matter how much GOOD they had at the outset.
Here’s how each annual GOOD allocation will work:
· 50% will go to claimers (according to the calculation set out above)
· 25% will go to GoodDollar Trust stakers (size of stake, including donated interest/total amount staked to the Trust).
· 25% to stakers who lock and stake their G$ to the mission.
Although users cannot transfer their voting rights, they will have the ability to delegate a trusted community member to represent their interests in the GoodDAO. At least initially, delegation will be limited to a single layer, which means delegates cannot themselves delegate the power entrusted to them to a different community member.
As an added safeguard against those who do not have the project’s best interests at heart is the GoodDollar Foundation veto.
Even after the GoodDAO takes over the tiller, the GoodDollar Foundation will retain veto rights over a limited subset of proposals, to protect against misuse. These include any proposal that would give a user access to the money in the GoodDollar Reserve, or significantly alter the amount or distribution of G$ minted by the protocol.
This veto power will remain with the Foundation until January 1, 2023, when the DAO will have the option to transfer it to a new guardian.
Outside of this veto, the Foundation will have limited say over the protocol. It will no longer control GoodDollar’s encryption keys and, importantly, it will have no access to the Reserve. And while it will be able to vote down proposals it genuinely believes are against GoodDollar’s interests, it will have no power to propose initiatives itself.
The initial governance model is designed to distribute control to the GoodDAO early enough in the protocol’s lifecycle to enable members to be part of GoodDollar’s growth and continued formation of the protocol. We will make further changes to this preliminary model in the months to come, to ensure it is as seamless and straightforward as possible. The Foundation will also work closely with the far-flung claimer community following the transition to help them work together to put forward and promote the proposals they believe will shape the GoodDollar economy in ways that work for them.
GoodDollar’s roadmap includes the future addition of functionality that will allow cross-chain voting, so claimers can vote on Fuse as well as Ethereum. This will keep transaction costs low, to ensure the widest possible pool of members are able to take part in GoodDAO governance.
Beyond this, the future of GoodDollar, and its potential to do good in the world, will now lie in the hands of our large and vibrant community. We have seen ample evidence through the PoC that our membership is brimming with excellent and innovative ideas for how to use G$ to improve lives and help others. We can’t wait to see where they will take GoodDollar in the future.
To find out more about GoodDollar’s governance model and future plans, please:
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