Interesting development. This changes the nature of the project completely… I have some threaded questions, mostly related to the new “problem” of high initial donations that’s mismatched with a low initial pool of recipients:
So, are you looking to convert the entire initial value ($3M?) into GLO on day 1 and then give away slowly? If so...
How fast would you plan on donating it? What’s the limiting factor? How to ensure you’re not creating a dependency on UBI that then creates new problems once it is reduced or removed (supposedly after 5 years?)
Would all of the monies go towards UBI, or might some go to for example the cost of certifying new villages and recipients? If not, who bears that cost?
What is your strategy to handle yields going up and consequently the value of the treasuries go down? How would you ensure staying at 100% collateralisation?
Or… are you planning on instead only converting the resulting yield into GLO? And, if so..
Would the monies backing GLO be stored and managed separately from the original treasuries?
If so, a similar project already exist (GoodDollar.org), why not just join forces with us instead of reinventing the wheel? We already have a wallet, a two-token model, a DeFi marketplace, a classifieds marketplace, non-KYC verification of unique users, a very active community, a DAO, and 450,000 users already. We would love a partnership with you guys.
Will other external backers be asked to similarly stake their donation and donate yield? If so, can backers withdraw their stake, or is that considered a permanent donation? Or might you support both options (as GoodDollar does)?
Or if their donations are converted into GLO directly: Are they immediately distributed to users? If not, how would a buffer mechanism work?
Or would you treat all monies the same (yield is reinvested into the stake) and so just start with an insanely high over-collateralisation?
Back to the original question, would it not make sense to increase speed of GLO-distribution in this scenario?
If and when you get external backers donating
Are all their donations are converted into GLO, your collateralization ratio could go down fast. You’re willing to relinquish control of this ratio to random external backers?
Or if you’re only converting at whatever the current collateralisation ratio, then… in the beginning they would create a minimal amount of GLO, which would make it super hard for you to recruit any new backers at all. And once you approach 100% then any new large donations would create a supply shock. Back to the question of buffer mechanism?
Not critical, just curious.
I can also suggest you partner not only with GiveDirectly but also with ImpactMarket. They operate on a similar basis, qualifying villages and villagers. They are already crypto-native, and they support people with flip-phones, removing the need for expensive smart phones. Having more capacity to distribute initially could help you with kick-starting your new economy.
our initial donation is to fund the operations of the GLO foundation rather than the treasury, and the 3M number we discuss in the comments here is a hypothetical at the moment. When we’ve actually set up the treasury, we’ll provide an update on the specifics.
We’re not giving away GLO—the GLO is invested in T-bills, which create a regular yield (in dollars), which we give away. As to creating dependency past the receipt date, we don’t think there’s any evidence of this happening to date with GiveDirectly’s programs. If we did see evidence of it, we’d evaluate our options.
GiveDirectly’s Financials page provides more details on where your dollar goes. In 2020, 94.2% of every dollar donated went right to a recipient.
We intend to for the GLO stablecoin to be 100%-collateralized . If yields go down, we’ll consider other investments, or changing some other aspect of our implementation.
We’d be glad to discuss collaboration opportunities with GoodDollar! We love what y’all are doing. I’m seth at globalincomecoin dot com if you’d like to set up a call!
RE: “Or would you treat all monies the same (yield is reinvested into the stake) and so just start with an insanely high over-collateralisation?” I’m not sure I fully understand this, but our plan is not to re-invest yield, but rather to give it away.
Interesting development. This changes the nature of the project completely… I have some threaded questions, mostly related to the new “problem” of high initial donations that’s mismatched with a low initial pool of recipients:
So, are you looking to convert the entire initial value ($3M?) into GLO on day 1 and then give away slowly? If so...
How fast would you plan on donating it? What’s the limiting factor? How to ensure you’re not creating a dependency on UBI that then creates new problems once it is reduced or removed (supposedly after 5 years?)
Would all of the monies go towards UBI, or might some go to for example the cost of certifying new villages and recipients? If not, who bears that cost?
What is your strategy to handle yields going up and consequently the value of the treasuries go down? How would you ensure staying at 100% collateralisation?
Or… are you planning on instead only converting the resulting yield into GLO? And, if so..
Would the monies backing GLO be stored and managed separately from the original treasuries?
If so, a similar project already exist (GoodDollar.org), why not just join forces with us instead of reinventing the wheel? We already have a wallet, a two-token model, a DeFi marketplace, a classifieds marketplace, non-KYC verification of unique users, a very active community, a DAO, and 450,000 users already. We would love a partnership with you guys.
Will other external backers be asked to similarly stake their donation and donate yield? If so, can backers withdraw their stake, or is that considered a permanent donation? Or might you support both options (as GoodDollar does)?
Or if their donations are converted into GLO directly: Are they immediately distributed to users? If not, how would a buffer mechanism work?
Or would you treat all monies the same (yield is reinvested into the stake) and so just start with an insanely high over-collateralisation?
Back to the original question, would it not make sense to increase speed of GLO-distribution in this scenario?
If and when you get external backers donating
Are all their donations are converted into GLO, your collateralization ratio could go down fast. You’re willing to relinquish control of this ratio to random external backers?
Or if you’re only converting at whatever the current collateralisation ratio, then… in the beginning they would create a minimal amount of GLO, which would make it super hard for you to recruit any new backers at all. And once you approach 100% then any new large donations would create a supply shock. Back to the question of buffer mechanism?
Not critical, just curious.
I can also suggest you partner not only with GiveDirectly but also with ImpactMarket. They operate on a similar basis, qualifying villages and villagers. They are already crypto-native, and they support people with flip-phones, removing the need for expensive smart phones. Having more capacity to distribute initially could help you with kick-starting your new economy.
Hi Noak, thanks for the thoughtful questions!
our initial donation is to fund the operations of the GLO foundation rather than the treasury, and the 3M number we discuss in the comments here is a hypothetical at the moment. When we’ve actually set up the treasury, we’ll provide an update on the specifics.
We’re not giving away GLO—the GLO is invested in T-bills, which create a regular yield (in dollars), which we give away. As to creating dependency past the receipt date, we don’t think there’s any evidence of this happening to date with GiveDirectly’s programs. If we did see evidence of it, we’d evaluate our options.
GiveDirectly’s Financials page provides more details on where your dollar goes. In 2020, 94.2% of every dollar donated went right to a recipient.
We intend to for the GLO stablecoin to be 100%-collateralized . If yields go down, we’ll consider other investments, or changing some other aspect of our implementation.
We’d be glad to discuss collaboration opportunities with GoodDollar! We love what y’all are doing. I’m seth at globalincomecoin dot com if you’d like to set up a call!
RE: “Or would you treat all monies the same (yield is reinvested into the stake) and so just start with an insanely high over-collateralisation?” I’m not sure I fully understand this, but our plan is not to re-invest yield, but rather to give it away.
Hope that helps!