Which Blockchain To Use To Deliver Basic Income To Millions Of Users?
GoodDollar Is Striving To Deliver Universal Basic Income At scale – So Determining Which Blockchain To Use Is Critical. We Have Chosen Fuse For High-Volume, Low-Cost Transactions
Over the past few years, one of the main talking points relating to blockchain improving financial inclusion has been focused on efficiency and a reduction in transaction costs. But which blockchain to use to deliver universal basic income? Anyone who has ever tried to execute an “on-chain” transaction on a public blockchain quickly faces the reality: on-chain transactions have costs.
Oftentimes, these costs are equivalent to or greater than the transaction costs in well-known peer-to-peer money transfer solutions such as PayPal, Venmo, M-Pesa, not to mention while lacking the convenience of those centralized services. On the Ethereum network, gas prices continue to rise, with transaction costs currently hovering (but not limited to) approximately 40 to 50 cents a transaction, and at many times during the past year, transactions on mainnet have cost more than $1.
The GoodDollar protocol proposes a basic income economy that pays out small amounts of daily basic income to millions of people a day. Initially, the value of income delivered per day per person may range from cents on the dollar to a few dollars. Clearly, paying $1 in transaction fees to distribute 25 cents of basic income to millions of users does not make sense.
The solution to this challenge has come in the form of side-chains, networks that enable interoperability and “speak the same language” as a public blockchain such as Ethereum, without asking the same requirements of users to interact with the blockchain. These side-chains are solutions that are designed to solve problems inherent to working on Mainnet (transaction fees), while still enabling projects such as GoodDollar and their users to access the many benefits of the Ethereum network’s widely adopted public network.
Which Blockchain To Use?
In GoodDollar’s case, the challenge was finding a technical infrastructure that could manage a high volume, high-frequency transactions with a working costs structure, while also providing access to liquidity, fiat on/off-ramps, security confidence, and service providers that have grown alongside Ethereum. There are several options for Ethereum side-chains, with Fuse Network and POA Network being among some of the most well known. But which blockchain to use?
In determining what side-chain to build atop, the choice was GoodDollar for Fuse was self-evident because of Fuse and GoodDollar’s shared mission to develop products that appeal to mass-market, non-technical users. In order to onboard mass users, we must be able to provide a simple user experience that doesn’t suffer from the same usability hurdles that constitute the experience of using most crypto applications: the need to pay gas, understand verification times, public addresses and securely maintain private keys.
Offering a decentralized basic income architecture is key to our mission, and until very recently imagining a system like that would have been impossible (unless, of course, we were to resort to using a centralized user-wallet system and compromise the non-custodial nature of crypto).
But today, fortunately, we don’t have to face this trade-off. Thanks to the wide adoption of token standards such as ERC-20, new service providers have emerged throughout the Ethereum ecosystem that addresses every part of the software stack. This, in turn, allows projects like ours much greater agility, flexibility and options in deciding how to develop and build their offerings.
This is why, when answering the question about which blockchain to use, we chose to build on Fuse:
- Fuse is built for non-technical end-users: it obfuscates the experience of working on a public blockchain.
- Fuse enables user accounts to have real blockchain wallets that have public addresses without having to manage private keys.
- End-users never pay transaction fees.
- Transactions are completed in a simple way, making it an ideal use case for payments and send/receive functions, key to how we see the GoodDollar economy will grow.
- Fuse is able to communicate and interact with the Ethereum public blockchain as the G$ coin operates on both the Ethereum and Fuse blockchain simultaneously. It does this through its Mainnet bridge. G$ coin running on both Mainnet and Fuse is what enables the creation of value for G$ coin, while enabling it to reach end-users (Claimers).
- Because of Fuse’s bridge to the Ethereum mainnet, users are able to interact with the wide range of liquidity and services that exist on Ethereum, such as on-and-off ramps, decentralized finance applications, other applications, and more.
After selecting the Fuse Network as our partner, we decided to participate as a validator of the Fuse Network, joining the group of participants that are committed to the network running steadily, safely and securely. As we race towards the launch of G$ coin, we couldn’t be more excited to be one of the first live working use-cases of the Fuse Network, and thank the Fuse team for all of their commitment and partnership in being a key part to bringing us so far.Back to Blog
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