[Phase-3][Binding] HIP-22: Creation of the UBI DAO

HIP: 22
title: Creation of the UBI DAO
author: @santisiri @RustyTheGamer @clesaege @fraserdscott
status: Phase 3
created: 2021-07-01
conflicts with: None
languages: EN

Simple Summary

This HIP will split the governance of the UBI smart contract from the governance of the Proof of Humanity protocol by creating a new DAO specifically for the monetary policy and technical innovations required for the Universal Basic Income ERC20 smart contract (UBI).


As Proof of Humanity evolves, the protocol itself will maintain its 1 person 1 vote governance model using liquid democracy but it will only have influence over the Proof of Humanity protocol itself and no longer influence changes over the UBI token. The UBI token will have moving forward a specific DAO of its own, where holders of UBI will be able to vote with their stake and thus make decisions that will have influence over the UBI smart contract.


In order to increase the demand-side pressure, improving the utility of the UBI token by making it useful for governance decisions that influence its own smart contract shall have a positive impact in price over the long term and incentivize long term accumulation from investors and holders. Governance staking has proven to be an effective influence for long term holding across multiple DeFi projects and from a legitimacy perspective, it makes sense that those with “skin in the game” get to advance the interests of UBI token holders.

Also, taking into consideration that UBI gets airdropped evenly to every verified human on Proof of Humanity, we don’t consider this puts at risk the democratic ideals that we pursue as a community. On the contrary: this is aimed at increasing the value of UBI over the long term which shall ultimately benefit every Proof of Humanity member.



  1. UBI shall have a Snapshot page of its own where holders of UBI that are verified Proof of Humanity accounts will be able to vote with their holdings of UBI.

  2. A Kleros Governor shall be setup to enforce on-chain the off-chain votes expressed on the UBI DAO.

  3. The DAO shall implement a Quadratic Voting scheme where holders will be able to vote with their stake but whales will be mitigated from excessively influencing the outcome of votes since the votes will be computed using the following formula:

(voting power = sqrt(balance) * isHuman())
  1. From the treasury of the Proof of Humanity DAO that originally consisted of 4 million UBI, 50% will be sent to the UBI DAO (2 million UBI). This will not have impact over the ETH or any other assets currently under the custody of the Proof of Humanity DAO.


  • The UBIProxy.sol smart contract will be used to create the UBIVOTE token as a proxy for the Snapshot page of UBI since it follows the voting formula specified above.

  • A Snapshot Page for UBI DAO will be created using the UBIVOTE token.

  • A Kleros Governor will be created to enforce on chain decisions made on the UBI DAO — The UBI Governor.

  • The UBI token smart contract proxy will be managed by the new UBI Governor created for the UBI DAO.

  • 2 million UBI from the Proof of Humanity DAO treasury will be transfered to the UBI Governor.

Additional Notes

Large holders of UBI that are not verified as Proof of Humanity members won’t be able to participate in the DAO. This means that in order to engage with the DAO, UBI holdings must be used directly from a verified Proof of Humanity address. This will help understand the distribution of UBI across multiple accounts and measure the Gini coefficient of the community over the long term.

We Are United :muscle:

Last but not least, this is by no means a split of the Proof of Humanity & UBI projects. They both share the same community and must remain connected through the User Interfaces that connect their smart contracts together so current and future users will begin accruing UBI once they finalize their profile.


Curious to hear everyone’s thoughts about this proposal.

I think splitting between a UBI and POH DAO is a good idea.

I also think this proposal should go further in setting the UBI DAO as a quadratic voting by UBI burn DAO (not necessarily now, but as a goal when on a L2 where buning tokens for voting is practical).

I don’t really understand this part. Those are smart contracts which have no ways of voting anyways.

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Just wanted to make that explicit since those addresses are the largest holders… and as a way of keeping everyone calmed that there won’t be any attacks coming from there. :slight_smile:

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Got it.
In this case, it could be explained in the justification in order not to clutter the proposal texts with elements without effects.

Cool, good feedback.

Btw, I also like the idea of voting by burning UBI.

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Another idea (for the period where burn is not practical) could be to use quadratic voting by balance (voting power = sqrt(balance) * isHuman()).

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My doubt is: would it be required to develop a specific ad-hoc strategy for Snapshot? Or we shall setup something built by us?

It’s trivial to do (just make a proxy contract with this formula and use the classic token vote strategy), less than a day of devtime.


Thanks for compiling it all into a digestible format @santisiri.

I wonder if it is easier to separate out point #3 to be handled after the split by the newly formed UBI DAO? Or do you think it’s better packaged?

I agree with @Justin on this. Splitting is already a big decision, no need to bundle in voting systems in the decision.

What would be the consequeses for employees, which DAO would they be working for? Both?

It only makes sense to split the DAO if we are going for a different governance model, specifically one aimed at increasing value of UBI over the long term.

UBI is money. Proof of Humanity is identity. Each should have a governance model fit for the nature of its assets.

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I agree with this initiative: different problems to solve, different DAOs, different governance models.


I am not arguing against different governance models (although I don’t see the point of the Quadratic funding system).
But I am against bundling decisions that are complex and require independent discussion and specification.
There are good reasons to split the DAOs without changing the governance model.

  1. Future decisions in one will not affect the other.
  2. UBIDao will show others that we are serious about decentralization and encourage the formation of other DAOs based on PoH.

These points are independent of the precise voting system.

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I fundamentally care about UBI becoming valuable. We are already making a point about democracy with PoH but with UBI the point is about making a sustainable currency over the long term more than anything else.

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Draining the PoH DAO is completely unacceptable.

For those serious about this proposal, please set up the parallel infrastructure necessary and have a public test for the community for a month to see the actual decisions that result from a new process structure.

This proposal is inappropriate, and if it wasn’t, it would be premature.

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I agree to make this as a test proposal for a period of time to see how it impact then evaluate to make it permanent or see how to improve it if it could be…

Why? Those funds where agreed to be used for both, PoH and UBI. And the constituency remains the same, there is no change of constituency in the DAO. So, technically, funds aren’t really moving at all. Your argument is incredibly weak.

No test would be adequate to see if it would actually work - “Do, or do not - there is no try” :slight_smile:

On another note, I agree with @santisiri that it is completely appropriate to split the treasury and especially the $UBI treasury since those are the type of assets the DAO would be managing.


100% aligned with @Mads.

All I’m thinking about this proposal now is the implementation of an UBIVOTE contract that interfaces with the UBI contract to get balances and the PoH contract to implement sybil resistance, and use this on top of Snapshot.

I think this in itself could be a very novel model for the governance of many DAOs out there.

What else should we be considering for this contract @clesaege ?