$UBI issuance rate

Hey Humans!

I’ve been thinking with @RoboTeddy and @Justin about UBI’s issuance rate and am creating a separate thread here so we don’t mix this discussion with other tokenomic-related ideas.

Ok, so clearly we have a problem:


[ $UBI price graph ]

Both from a security and organizational perspective, sustaining the price of UBI is critical for Proof of Humanity to achieve its ambitious goals.

Today, 1 UBI is valued at $0.05 USD, a result of an ongoing decay in price since the project was first launched. Our current issuance model mints 1 UBI per hour, per member of the registry. The math behind its valuation is simple: the value invested in UBI must be greater than the amount being cashed out by new and existing recipients, otherwise the price will continue to decrease.

Currently, all investments come from buys on the UBI/DAI & UBI/ETH liquidity pools. There’s an additional path to accruing value, through a yearn vault that buys and burns UBI with half of the yield it generates. However, as the community of recipients grows (as of now, we are the fastest growing personhood protocol ever launched), we need more robust mechanisms to constrain sales and also counterbalance them with increasing investments, thus sustaining the price. Below we have outlined a few guiding questions for us to consider, which can help frame this discussion; and a few possible approaches to addressing these questions:

Guiding Questions

  1. We know that there are dozens of potent use cases for Proof of Humanity, which will increase the utility of UBI. But building this thriving ecosystem will take time. How do we ensure that the price is sustained at this initial stage, before we get there?

  2. Can we create mechanisms that incentivize recipients to hold and/or re-invest their coins into either the pools or the yearn vault?

  3. Can we create financial incentives for new members to join as early as possible, helping bootstrap the network?

  4. How can we make UBI more attractive to investors?

Progressively decreasing inflation

There have been different proposals about how to address these questions, and all of them should be explored. That said, up until this point we have found that all of the models which effectively address the 4 questions above fall under the category of progressively decreasing inflation. Here’s our reasoning:

There will always be some number of recipients that immediately sell their UBI allocation. Especially those for whom the $ amount of it has a measurable impact on their lives, which is a significant number given most members are coming from Latin America. However, both "recipients who can hold” and “investors willing to take a risk” can be grouped under a speculative value. For these groups, the incentive to sell only exists if they believe UBI will be worth less tomorrow. Conversely, the incentive to buy or hold increases if they believe it will be worth more in the future.

Thus, a progressively decreasing inflation model seems to make most sense, as it makes speculation attractive. We should design a framework where both investors and recipients can look at the tokenomics of UBI and make a reasonable prediction that the value is going to increase.

Possible models

Here are some possible paths to address the Guiding Questions. These are meant to kickstart a conversation rather than suggest a fixed solution:

*** Decreasing inflation according to the number of registered members on Proof of Humanity:**

1-100k members 1 UBI per hour
100-500k members 1 UBI per day
501-1M members 1 UBI per week
>1M members 1 UBI per month

The table above suggests an arbitrary outline to exemplify the model, but there are probably more rigorous methods to determine these values, which a tokenomics expert could supply (perhaps estimating the value provided by a network of each of these sizes, using other cryptocurrencies as a reference).

  • Decreasing inflation over time
Year 1 1 UBI per hour
Year 2 1 UBI per hour
Year 3 1 UBI per day
Year 4 1 UBI per week
Year 5 1 UBI per month

This model increases predictability with clear deadlines, which might be reassuring for both investors and recipients willing to hodl. On the other hand, this approach assumes the growth of the network over a certain period of time, which makes it riskier than the first proposal.

  • Tying issuance to a fixed number, and splitting it between every registered human.

This is how DOGE works. E.g. Every minute 10,000 UBI gets split between every registered human. From a speculative perspective having the issuance fixed makes UBI appear like a more traditional token, meaning investors are more comfortable with the due diligence.

  • [ Complementary approach ] Giving out locked-in bonuses for early users:

This model can be implemented in addition to the models above, and would specifically target question 1.b “Can we create financial incentives for new members to join as early as possible, to help bootstrap the network?”.

Here, early users would get a locked-in bonus. E.g. the first 10k people get X locked coins, the next 20k people get P locked coins. After 3 years, they can spend them.

Issuance Rate Workshop

Next Tuesday, July 13 at 11am ET, we will host a workshop with Albert Wenger, Chris Burniske and other professionals who will help us think through these questions, analyze some of the pros and cons of different issuance models.

I’m capping it at 30 participants so we can all speak and listen to each other. If you would like to join it, please sign up here - spots are on a first come first served basis.

→ Finally, if you would like to reply to this thread, please take the following points into consideration:

  1. There are multiple ideas that can help sustain the price of UBI which do not directly involve the issuance rate (buying and burning systems, compelling challengers to reinvest their rewards, etc.). These are all valid and important but if you are going to submit them here, please make sure to mention explicitly how your ideas connect with the issuance rate, which is the lowest hanging fruit for us as a community.

  2. If you would like to propose a different model for issuance rate that has not been outlined above, that’s wonderful! Make sure that the idea is as simple as possible, because (i) smart contracts are tough, and even implementing the simplest idea will entail a lot of complexity; and (ii) ideally this should be simple enough that a wide variety of stakeholders can make sense of it. Furthermore, in order to clarify how your proposal can help us solve the urgent challenges we are dealing with presently, please include an explanation of how your proposed issuance rate model addresses each of the four Guiding Questions, or include an explanation of why it is not addressing the questions (it is totally fine if you think that these are not the right questions to ask, just explain why).

11 Likes

It’s a good post.

I’m not a fan of the decaying issuance models described though, because I like the idea that 1 UBI = 1 Hour for all, forever. This helps people value an “hourly basic wage.”

Instead, I would propose that the community consider a model where the Time to Vouch is increased/decreased, thereby slowing/speeding the number of people who are allowed in over time. This could be somewhat equivalent to a “difficulty” rate with other currencies.

3 Likes

It’s more about rewarding early adopters and giving incentive (for those that can) to hold. The hypothesis is this would increase the hourly rate for those cashing out. Decreasing issuance rate doesn’t mean less “basic hourly wage”. If you changed issuance to 1,000 per hour or .001 per hour it shouldn’t matter for the present (everyone still gets an equal slice of the new pie).

This would hurt PoH adoption. UBI is just one use case for PoH. Other projects (like Gitcoin) wouldn’t use the registry if people couldn’t freely register. It would be dooming PoH to only being UBI.

5 Likes

Doge issuance ftw.

Nicely stable, predictable, moderate and slowly decreasing (in %).

Definately one of the best issuance models, which is ironic since it gets criticized a lot for the entirely arbitrary block issuance of 10k

I think the issuance side is fine, but we need to find ways to burn.
We create “sactioned” apps/products that give a portion of the profits to the DAO. The DAO can then choose to burn if needed.
I interpreted the issuance as a mission statement, obviously it doesn’t work without burning, but it effectively shows people what we are trying to do. Now we have a medium-sized list, can we use it to create value?

4 Likes

Yeah, I don’t think issuance is the issue. The issue is giving value.
Decreasing the issuance would lead to the premine having a bigger impact (instead of being diluted) and will make the present easier at the cost of making the future harder:

  • If we decrease issuance in the future, it makes being in the registry now more interesting (as people will get more % if the total UBI).
  • But it also makes being in the registry later less interesting (new people will get a smaller % of the total UBI).

Decreasing the emission rate looks like a quick boost but which would compromise the future. We need to ask ourselves why UBI would be a widely used token in the future?

One of the answer is that it’d be the fairest:

  • Other coins like BTC gives a huge advantage to early adopter, this is good for the early days, but would hinder end tail adoption. Why would people adopt BTC while the supply was mostly distributed to other participants? It’s not interesting to newcomers.
  • On the other hand, people joining the UBI movement do not start at a disadvantage, they have some interest to use UBI as it’s a coin that they get a fair share of.

Note that there is still an interest to register early, as the amount of UBI one gets is proportional to the time one is registered. So there is already an advantage to early adopter, but this one is linear and fair to the newcomers.

Something like HIP-14 would enshrine the fair distribution of UBI.

4 Likes

I’m looking forward to this workshop. Currently, I support a fixed issuance rate (what some refer to as the DOGE model). For example, 100,000 UBI per hour that split between all registered humans. I believe this incorporates the spirit of all the other proposals in a simpler package. Keeping things simple is always a good path.

Fixed issuance would:

  • Incentivize people to join now (reward early adopters)

    • Fear of missing out on larger drip
  • Encourage recipients that can to save UBI

    • “My stash will be worth more in the future,” today the incentive is opposite
  • Allow investors to speculate on the adoption of PoH and the UBI economy

    • The pushback I consistently hear from potential investors is that today’s dilution negatively correlates to growth.
  • Create a novel tokenomic where new issuance is spread thinner over time.

    • Novel in crypto is exciting and attractive.
2 Likes

Good morning, I’m trying to plan objectives to be able to develop a project.
I think it would be fundamental to start outlining them.
What minimum basic income do we want?
How can we add value to the curated list?
can we develop an NFT platform to do something with the UBI drop?
do a UBI lottery?
These initiatives are the most used to burn tokens without stopping issuing.
I think that putting together a way forward is a more tempting way to get real investments.
also give value to the POH DAO that has strength in itself as a truly democratic platform, those for me are the mainstays of the project, where we should stand to see if we are capable of jointly and democratically developing this beautiful challenge.

regards

Our aim is that the ticker price of UBI becomes synonymous with a global consensus regarding how much is a human’s time worth being supported with Universal Basic Income ~ Introducing UBI

1 Human = 1 Hour = 1 UBI is a strong and simple narrative that differentiates $UBI from other speculative cryptocurrencies. It already incentives everyone to join as early as possible (as the younger you start joining the network, the more UBI you get).

I believe we should keep it as it is and find other means to reward early holders (such as the locked-in bonuses).

Why not have a token sale? Mint UBI and offer it at a deep discount to PoH users, lock it for a long time (3-5 years or more). Proceeds can be used for bootstrapping/grants, or locked inside the yearn vaults.

This is like what Pancake Swap did with its “gamification” mindset.
They are doing great.

Yes, exactly
They are ideas that work and and we should copy, there is also another ALPACA CITY platform that takes care of some alpacas and feeds them etc, we could do the same with our UBI droplets

Hi everyone! Me and David Feld have written a summary of our discussions at UBI’s issuance rate workshop last week. We hope this can help guide future discussions!

All the best,

Paula

7 Likes

If product & app development is the focus, then perhaps utilizing the 1-3% redistribution protocols that some other cryptos utilize, but rather than the current norm of taking 1-3% of the fees generated through transactions, a percentage of the profits made from applications & products is used to provide liquidity to the $UBI vaults instead?

This partially addresses a few aims:

  • Generate institutional interest with said apps & products

  • Increase the number of publicly involved partners, the bigger the better

  • Allows institutions to get involved with the network in both a charitable & automated fashion. (When UBI truly takes off, institutions get good rep for helping to address global income disparities)

  • Potentially improves the the price of the $UBI in the long-term through proven stability & usability of the network.

I think a good example to look at is Hedera Hashgraph or Klaytn in this instance. They both have an extremely impressive number of top-tier institutions on board, either in an advisory capacity, or with a direct invested interest - But their price is still less than $1. The basic theory is that the work they are putting into institutional adoption will provide a stable, long-term price increase, as a pose to short-term fix. PoH may wish to do the same.

As for late-stage potential industries PoH could be used in Travel, Retails & Hospitality, Automotive & eScooter, Medical

I also believe approaching leading political figures across the globe with a historical interest in Universal Basic would do wonders for expanding the project’s reach. When the time is right of course.

5 Likes

Some very cool ideas there. My personal belief is that the core driver of any stable value for UBI will rely on utility (as Vitalik says). Can we find a ‘must have’ application - apart from POH of course - which will compel people to invest in the UBI value in some way. Of course I’m not saying anything new, it’s what all coins search for, but the fact that UBI has a philanthropic element should make it easier to ‘sell’ to the citizens of the world. ?

Doge issuance ftw.

Nicely stable, predictable, moderate and slowly decreasing (in %).

Definately one of the best issuance models, which is ironic since it gets criticized a lot for the entirely arbitrary block issuance of 10k

feel like i need to elaborate on this, since Dogecoin got literally critized for the entirely arbitrary block issuance of 10k at EthCC…

Doge issuance is certainly not “insane”, the annual increase in supply is currently 4% per year and decreases constantly. Almost the same as in Bitcoin, except that they blew like 90% of their total supply in the first 10 years and now depend on ever increasing transaction fees to stay afloat.

The prevalence of basic unit bias in crypto is truly astonishing.

Posta is a microblogging social network for human beings only. To be released on mainnet this monday, it allows for users to “like” posts using UBI, burning half of the amount and the rest goes to treasury and the author.

Some other use cases are already being thought of for Posta, but as an example, I think a good entry point would be using UBI for digital goods, since they are the easiest to provide without much base cost.

3 Likes

I agree with this. I don’t think the UBI side of things should be altered. I think what needs to be altered is the taxation side of the equation, where there are ways of constantly burning UBI. Personally, I think every transaction should burn some % of the UBI being transacted.

2 Likes

Hey, kinda late to the party haha.
Saw a tw post and I thought to come here and share some thoughts.

  1. Is there any chance to adjust UBI issuance for each human? Since time differs for each individual, we can issue more UBI at the beggining of the relationship between a certain Human and the Protocol, and gradually lower it down.
    this could serve as a metric of “maturity” in the protocol.
    Timeframe could be days, months, or whatever.
    image

I thought about requiring wallet signatures every month, for example. After each signature, issuance rate would drop.
That could be like a “proof of life”, and it could even help to solve the forgotten wallets/deceased people receiving tokens problem.

Maybe im saying something dumb, because i know nothing about Contract interaction, Wallet signatures, etc. but Im sure @santisiri does.

lemme know what y’all think.

What is the motivation for tapering off?

Reducing issuance over time.
I think of it similar to social asistance: a person needs more at the beggining, and they eventually will move forward and stop needing the drip.
Maybe this could be a way to emulate this and solve the infinite supply problem.

An alternative could be to reduce issuance rate for the network as a whole, which was previously mentioned.