I’ve seen a lot of questions arising about addressing the complexities of those in genuine need withdrawing UBI, the impact it has on UBI liquidity, and passively ensuring users wish to remain committed to the network. Below is my suggestion. This is from my fully formatted document with headings & subheadings which you may find easier to navigate over on my Google Drive @ Proof of Humanity - Expansion Concepts & Improvements
Successfully utilized by a (previously closed invite) P2P network AudioNews for over a decade. Users with a seeding/leeching ratio of 1 : >0.99 are unable to download new content until their leeching value is below the threshold in relation to the total & historical seeding value.
Proof of Humanity can utilize this system to ensure that users in financial need are able to withdraw their $UBI without guilt or judgement, whilst maintaining overall user dedication to upholding the network, and the stabilization of DAO/ETH liquidity
Action taken (Numbers are placeholder only):
Apply a balance/withdraw ratio limit of 1 : 0.75
Ratio is a calculation of: Balance total (including UBI drop/liquidity provision history) that remains displayed to users as a static value of " 1 " / Withdrawal total (including withdrawal history) that also changes in relation to the balance value of " 1 "
- Challenges to the system can go to Kleros court when required
User 1 has a simplified ratio of = 1:0 (User has 100,000 UBI. User has made no withdrawals since registering to PoH)
User 1 has 100,000 $UBI
User 1 withdraws 50,000 $UBI
User 1 balance is now 50,000 $UBI
User’s ratio becomes 1 : 0.5
Balance to withdrawal ratio does not exceed 1 : 0.75
No challenge required - Automated withdrawal successful
User 2 has a simplified ratio = 1 : 0.25 (User has 75,000 $UBI. User has historically withdrawn 25,000 UBI) (They have used 25% of their current " 1 " ratio)
User 2 has 75,000 $UBI remaining
User 2 requests to withdraw an additional 50,000 $UBI
1 : 0.25 ratio would become 1 : 0.75
Withdrawal successful* - No additional withdrawals can be made until ratio is 1 : <0.75
User 3 has a simplified ratio = 1 : 0.6 (User has 40,000 $UBI. User has historically withdrawn 60,000 $UBI) (They have used 60% of their current " 1 " balance ratio)
User 3 has 40,000 $UBI remaining
User 3 requests to withdraw 20,000 $UBI
1 : 0.6 ratio would become 1 : 0.8
Withdrawal unsuccessful - Withdrawal amount to be adjusted by the user so resulting ratio is 1: <0.75, OR, the case is taken to Kleros court for an appeal to withdraw full amount. User chooses action:
User 3 Choice 1A:
- Adjusted amount taken = No action needed so long as 1 : <0.75 ratio is achieved, withdrawal successful!
User 3 Choice 1B:
Withdrawal exceeding a 1 : 0.75 ratio is requested
Taken to Kleros courts for approval with supporting evidence
Evidence of commitment to $UBI through staking liquidity / history of community support / activity in the PoH network (vouching, etc) taken into consideration
Consensus reached by community jurors
Appropriate penalty* to account issued, IF required
- Example possible penalties*:
- No penalty given (User is an active, proven benefit to the PoH community)
- No more withdrawals for 45 days
- No more withdrawals until ratio 1 : <0.5
- If user is found to be consistently unsupportive of PoH network, user may withdraw their funds and have registration revoked for specified or unspecified length of time.
- Example possible penalties*:
- User 4 has a simplified ratio = 1 : 0.5 (User has 100,000 $UBI. User has historically withdrawn 100,000 $UBI) (They have used 50% of their balance " 1 " ratio)
User 4 has 100,000 $UBI remaining
User 4 deposits an additional 50,000 $UBI
User 4 “balance” becomes 150,000 (Total historical balance is: 250,000 $UBI)
1 : 0.5 ratio would become 1 : 0.4
Backend view: The actual total value of “1” has increased, as it now represents a life-time total value of 250,000 $UBI. Total liquidity to be locked has increased, but ratio remains static (At 25% of 250,000 this would be 62,000 $UBI)
User 4 deposits another 350,000 $UBI
User balance becomes 500,000 $UBI (Total historical balance is: 600,000 $UBI)
1 : 0.4 ratio becomes 1 : 0.166
NOTE: The ratio is always calculated based on the total historical $UBI balance against withdrawals, NOT the currently displayed $UBI balance
Provides additional incentive for users to remain committed to supporting the PoH network and their fellow humans
Allows users undergoing financial difficulty the ability to withdraw their $UBI in a responsible and pre-approved manner
Allows users wishing to exit the network to do so in calculable way to the PoH network.
Ensures a certain level of liquidity is available at all times for PoH users ~ Helps maintain $ value of the $UBI token.
Provides a simple value for PoH users to understand their withdraw history.
Facilitates additional Kleros Court use-cases in automated finance
Users must have a % of their $UBI locked at all times
Users may equate the ratio system as a centralized method of controlling their finances
Users may interpret the ratio system as utilizing fear to ensure dedication to the PoH network
Users may attempt to intentionally straddle the 1 : 0.75 ratio in perpetuity
Withdrawal requests taken to Kleros court may need to take into consideration the user’s main language ~ will need to align with a language understood by the jurors & vice-versa. (For further reading, see Section 5: Disabled Support & Widening Participation on the aforementioned Google Doc)
Solutions to disadvantages:
Users straddling the 1 : 0.75 ratio for a long period of time could be flagged for additional information or account review as per the usual PoH process
Kleros court judgements will allow for exceptions to be made, whilst illustrating Kleros court efficiency & success in a financial dispute setting.
Add a hard withdrawal cap, E.G: No more than 100,000 $UBI withdrawn per period
1a) Key concern regarding withdrawal caps: Cost of living disparity between locales
Utilize “Proof of Competency” assessed PoH users to address potential language barriers in a Kleros court case when required. (See Section 1: Proof of Competency @ Proof of Humanity - Expansion Concepts & Improvements)
Two times per calendar month withdrawal limit of any $UBI amount providing 1 : 0.75 is NOT exceeded
- Can appeal to Kleros for additional withdrawals if ratio allows
- Users are allowed to exit the network with their full amount, but are likely to have their registration revoked or suspended (Theoretically, anyone interested in genuinely supporting the PoH network & global universal basic, would not wish to withdraw the full amount unless they have extenuating circumstances* requiring them to do so)
Example extenuating circumstances to consider:
- Medical bills
- Unexpected financial changes
- Untaxed charitable giving
- User has passed away
As everyone on the PoH network knows another individual, there should, theoretically, always be someone with knowledge or the capacity to discuss a hardship that might be impacting another PoH user who needs to withdraw more than the 1 : >0.75 ratio.
Naturally this will not always be the case and there will always be exceptions or cases requiring an additional level of sensitivity & understanding, and/or scrutiny.
- Clarified static nature of the balance ratio.
- Created 4th example illustrating deposits & withdrawals within the same account
- Corrected some mathematical errors