From RFI to UBI: A Tale of Decentralized Finance

If you’ve been following along on my journey lately, you’ll know I’ve been working on a financial technology called Reflect.Finance, which is represented by a cryptocurrency called RFI.

The RFI token has a deceptively simple proposition: Charge a modest 1% fee on all transactions of the RFI token and redistribute that fee instantly and proportionately to all token holders.

Most of the top 25 cryptocurrencies (as of 2/20/21) have more than $1 BILLION dollars in trade volume per day. Bitcoin has over $77B trade volume per day. If Bitcoin included RFI’s fee share mechanism there would be $770 MILLION dollars redistributed to holders of the currency today.

This alone is a revolutionary economic innovation.

What most people haven’t seen yet, though, is how the RFI token can be used for much bigger decentralized financial engineering.

In a future article, someone from the Reflect Foundation will talk about the opportunity we’re pursuing to create “risk free” bonds.

[Note: depending on data source, the bond market is currently worth between $80-$120 TRILLION]

Thanks to RFI’s passive yield function it’s the only cryptocurrency (I’m aware of) that is inherently capable of addressing the global bond market. That’s an incredible opportunity, especially for those who understand the inner workings of global finance.

But I don’t, and neither do most people who will end up reading this article.

Today I want to talk about something most of us have heard about in the last few years: Universal Basic Income.

Investopedia defines Universal Basic Income (UBI) as “a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.”

There are a growing number of UBI experiments from sovereign agencies around the world, but it’s not limited to governments. There are also a few blockchain projects popping up attempting to address UBI in a decentralized fashion.

As the wealth gap continues to widen, and the pandemic continues decimating global and local economies alike, UBI has naturally become a hot topic. It may be one of the few ways we can address the desperate need of millions of people around the world for a lifeline through the pandemic and a cushion even in stable times.

One US presidential candidate in the 2020 election cycle — Andrew Yang — even made this the cornerstone of his campaign.

Think of the millions of minimum wage workers in the US who can’t afford rent on their own in any state in the union. Or all the unpaid labor coming from our stay at home moms (and dads) when a single income can no longer afford to care for an American family. The millions of us drowning in student loan debt from degrees that no longer guarantee us a decent wage.

And that’s just in the States (where I’m from).

This brings me back to Reflect.Finance. We’ve been talking about the opportunity people have to invest in RFI for a chance to achieve Real Financial Independence via sustainable, passive yield. With significant daily transaction volume even a modest amount of RFI should earn the average person a basic income.

But there’s a much bigger opportunity here for institutions — sovereign, independent, and/or decentralized— that can afford to leverage larger holdings. They have the ability to create UNIVERSAL basic income programs locally or regionally by holding larger stakes in RFI on behalf of their community and delegating portions of the fee share income to everybody.

There’s a “treasury” smart contract launching very soon via RFI’s sister token Elevate(ELE) that will make it possible to “stake” either RFI or ELE (both of which earn passive income) and keep the principle locked in while pushing the income out to predetermined wallets.

It’s my belief that models like this provide the basis for sustainable, non-inflationary, Universal Basic Income as well as the necessary infrastructure for social finance (read: global decentralized crowdfunding).

Many of us in the Reflect community are excited to experiment with these models. It’s all so new it’s anyone’s guess what will work and what won’t in designing equitable economic systems (that’s what crypto is really all about, right?).

We hope others will join us on this journey and discover new ways of creating a global financial system that works for us all.

If you’d like to learn more about Reflect.Finance, read up on the Reflect Foundation’s medium publication, follow us on Twitter @ReflectFndtn and join us on telegram at t.me/reflect_finance.