Learning Through Doing — GoodDollar’s 4th Anniversary of Crypto Universal Basic Income
Published in
7 min readSep 25, 2024
The GoodDollar protocol launched in September 2020, and over the past four years, it has grown into the largest on-chain Universal Basic Income (UBI) project with over 800,000 unique users, more than 73 million G$ UBI claims, and 3.8 billion G$ distributed (see real-time data). Reaching milestones like this provides a moment to reflect on how far we’ve come — the wins and elation, the tears and heads knocked on walls, the many times coffee has been spilled on keyboards all around the world. In celebration of GoodDollar reaching another turn around the sun — here are three things we did well, three we could have done better, and three things that surprised me over these last four years.
Three Things We Did Well
- Prioritizing User Experience Over Decentralization Dogma
From the start, we chose to prioritize ease-of-use over the rigid adherence to decentralized technologies. When we launched, many Web3 builders were dogmatic about building fully decentralized systems, but developer tooling for decentralized apps (dApps) was still primitive, and decentralized identity solutions were too complicated. To onboard as many users as possible, we made a conscious decision to integrate centralized technologies for sybil-resistance and onboarding. This was simply practical design decision and driven by the user experience we wanted to deliver — this allowed anyone with a smartphone to self-verify their identity and join the platform. Despite some criticism from more purist projects, this decision enabled us to onboard over 800,000 live, unique individuals. Special thanks to the design chops of Tal Oron, Hadar Rottenberg, and our partners FaceTec and Web3Auth for supporting this approach. - Building a Social Flywheel for Peer-to-Peer Growth
GoodDollar was always designed to thrive on peer-to-peer growth. We understood that the utility of G$ was social, and peer-to-peer referrals would be key to distribution. To support this, we built an invite link feature that made it easy for users to share the protocol with friends and family via SMS or social media. This simple mechanism powered our growth, allowing us to onboard thousands of users without spending on marketing. For example, using the invite feature, we onboarded 27,000 users at a cost of just $0.0004 USD per user. Similarly, a campaign sponsored by Celo onboarded 82,000 members with an acquisition cost of $0.16 USD per user, all through peer-to-peer referrals. As a benchmark, cost of user acquisition for fintech apps in emerging markets such as Nigeria, India, Indonesia all range from $7 to $15 per user. What’s best is that all funds spent on these campaigns were delivered in the form of income to the users that onboarded — low-cost, user onboarding is an area where we have excelled. - Purpose-Driven Community
GoodDollar’s mission to use blockchain for expanding economic opportunity drew a community that believed in its values. The project aimed to tackle wealth inequality — a multidimensional problem which attracted a diverse, mission-driven global community. Unlike the often cutthroat “zero-sum” culture in crypto, GoodDollar fostered an ethos of generosity and mutual support: the original WAGMI. This community-based spirit was most visible in the way members helped each other, often donating funds to cover medical, education, or funeral expenses for fellow members they had never met. The members of GoodDollar have true conviction in using their crypto basic income to do good for others — even when living in conditions of relative scarcity themselves. For me — this was crypto’s dream use case in action — individuals around the world were able to easily donate to support others. Steven, a university student in Nigeria, was a pioneer in this area, using GoodDollar to raise funds for student scholarships and other varied needs — all money and mechanics made possible by blockchain. There are countless other examples of changemakers and NGO operators integrating GoodDollar into their efforts to improve the world — shout-out to Yoni Ben Ami, running Pesia’s Soup Kitchen in Israel, and Karen Jooste’s Rightful Share initiative to support microentrepreneurs in South Africa. GoodDollar’s community-driven culture has been central to its long-term success and community stickiness.
Things We Could Have Done Better
- Protocol Security
One of the challenges we faced was an attack on the GoodDollar reserve, which impacted the protocol’s liquidity. The Foundation and community are now working with strategic partners and sponsors to create a more robust reserve model, including implementing multi-reserve strategies and improving security processes. Thanks to our community’s patience and collaboration, we’re confident we can build a more secure and resilient protocol. - Driving Sustainable Demand for G$
While we succeeded in distributing G$, driving consistent demand for the token has been more difficult. G$ was designed to be useful for commerce, but building new markets and economies takes significant effort, especially for a small team with a global mission. There have been successful on-the-ground use cases that drove demand — such as using G$ to buy airtime in Ghana and Nigeria — but scaling demand for G$ across a wider range of use cases remains a challenge we’re working to address. - More dApps for G$
We expected that more decentralized applications (dApps) would emerge where users could spend their G$. While there were high levels of engagement in dApps that integrated G$, such as NFT marketplaces or savings products like Halofi, there simply haven’t been enough dApps built on top of the GoodDollar infrastructure. A key strategic focus moving forward is to encourage developers to build small dApps for our growing global community of G$ token holders, particularly in the areas of social and gaming.
Three Surprises
- The Hypothesis of Letting Cheap Money Flow Worked
One of the core questions we sought to answer was whether people in need would use G$, even if it had a low USD value. The answer has been a resounding “yes.” As both a long-time builder and aspiring economist, this success never ceases to amaze me. GoodDollar adoption has been strongest in emerging and hyperinflationary economies, where the need for economic alternatives is greatest. In fact, 72% of our community comes from such economies, with 62% of users living in households that earn less than $200 per week. In some cases, G$ has been used as a community currency, as seen in the Neduc community in Coradinho, Brazil led by Professor Christiane Mendes, where it supports local micro-entrepreneurs. This was core to the original mission — the role of the “free money as a public good” was to provide the financial and technical infrastructure what real people could build on top of and use to generate economic activity. - Volatility Is a Feature, Not a Bug
Although G$ was designed to be relatively stable and with low price volatility, we found that for many of our users, the volatility was seen as an opportunity. In regions where access to traditional capital markets is limited, G$ was seen as a way to gain exposure to global capital markets, particularly as a proxy for Bitcoin and other cryptocurrencies. The community embraced this volatility as a way to potentially benefit from price movements, viewing it as an asset that could generate upside, even if it fluctuated in value. - The Core Community Stuck with Us and Grew Alongside the Project
Perhaps the most gratifying surprise has been the growth of our community members alongside the project. Many early adopters have become key contributors and leaders within the GoodDollar ecosystem. One standout example is Andres from Colombia, who started his crypto journey with GoodDollar, became one of the first community moderators elected by the GoodDAO and pursuing a career in development. His story is just one of many where GoodDollar has had a profound personal and professional impact on members of our community.
Looking Ahead
As we celebrate GoodDollar’s fourth birthday, we’re translating these lessons into the next phase of the project. We’re focused on improving our ability to deliver funds to those who need them, enhancing our open-source infrastructure, and driving demand for G$ by scaling community currencies and mutual credit systems. There’s still much to be done, but we’re excited to see what the future holds.
Happy 4th Birthday, GoodDollar!
A heartfelt thank you to everyone who has contributed to the project’s success, from the community members to our core sponsor, Yoni and eToro. Onward in the experiment!
