Universal Basic Income may soon become possible through an initiative powered by Proof of Humanity. Users who register on the PoH identity network will accrue 720 UBI each month.
The UBI (@proofofhumanity) auction is live!
0.5 M UBI for WETH, with a minimum bid price of 4541.326 UBI per WETH
The auction will end in 7 days and 22 hours.
Place your limit order while it’s hot. 🔥🔥https://t.co/gcQ1oVVwG6
— Gnosis Auction (@GnosisAuction) May 3, 2021
How Proof of Humanity Works
Proof of Humanity is building an identity network on top of the Ethereum blockchain. To register on the network, users must submit a video proof of their Ethereum address, certifying that they are real humans and that they are not already registered. Their registration must be vouched for by at least one verified person already in the network.
Verified users are incentivized to report addresses that are suspected to manipulate the network. Any manipulation reports are then resolved by a Kleros court, making the network Sybil-resistant. Once verified, users will start to accrue UBI tokens, which can be unlocked anytime on request.
The initial supply is 10 million UBI, of which four million are allocated to the UBI DAO treasury and four million to liquidity mining. Two million UBI are allocated to users who migrated Democracy Earth’s HOUR tokens, which were the precursor of UBI, to the new platform. The treasury also seeks to sell 0.5 million UBI on the recently launched platform Gnosis Auction, at a minimum bid of 4541 UBI per WETH.
Can a Universal Basic Income be Possible?
Enabling each person on earth a universal basic income without taxation or other means of forceful wealth redistribution is one of the hardest problems crypto economists are trying to solve. The problem is that most approaches towards a crypto-enabled UBI rely on the endless inflation of the token supply and Proof of Humanity’s UBI token is no different.
Luckily, the inflation rate is capped and algorithmically predictable, like for most other inflationary token models, such as Bitcoin and most crypto assets based on a Proof of Stake blockchain, albeit at a very high level. The initiative by Proof of Humanity mints one UBI per hour for each registered and verified person, which transfers to a universal basic income of roughly 525 USD at the current market rate and auction price.
With a world population of 8 billion people, this would amount to 5.76 quadrillions UBI minted each month, which vastly outnumbers the initial supply of 10 million UBI. This casts serious doubts that the token can keep its value once it hits mainstream adoption. On the flip side, the minting is restricted to users who register their identity on the Proof of Humanity platform, so the inflation rate is linked to adoption, allowing the supply to grow somewhat organically.
Ultimately, once the goal of a worldwide universal basic income is met, the inflation rate will actually start to decrease, as the circulating supply keeps increasing while the amount of minted token will remain nearly constant. In theory, it is therefore very much possible to create a universal basic income through token supply inflation. In practice, the free market will determine a fair price for the UBI token.