UBI as a public good - or unleashing human creativity

Why should we care about UBI

I believe the question of why UBI is a meaningful and critical for the world at large needs no explanation: it provides a certain level of financial stability and therefore guarantees of a quality of life that every human being deserves.

Altruistic and humanitarian grounds aside for a moment, I would argue that introducing UBI makes economic sense for Nation3 and other (cloud) nations.

Providing a basic financial starting point allows citizens to have their essential needs covered, unleashing their mind space for creative purposes, and most importantly, opening doors for them to enter into economic activity.

Some of the best examples of returns on investment into human capital comes from Singapore. When Singapore broke free from Malaysia in 1965, it was a small, unimportant on international scale nation with a largely illiterate population facing an overwhelming levels of poverty, unemployment, and a housing crisis. Singapore’s GDP per capita was just ~$500.

Fast forward a few decades, and as of 2021 its GPP per capita is ~$73,000 (!146x increase!). Arguably, some of the most important decisions and reforms that led to this were the educational reforms and major investment into local talent; housing reforms making sure >90% of the population became property owners (up from 29% in 1970!); and competitive compensation structures (first government ever to compensate public workers akin to private executives, with milestone-based approach linked to the nation’s economic performance). These are of course only some of the examples, but the emphasis on cultivating internal human capital is clear: if you elevate your citizens from illiteracy and poverty, they can become active participants in the economy and drive it forward. (1) (2)

I think UBI would be a worthwhile experiment for Nation3, and would add attractiveness to Nation3 citizenship.

Overtime, I would like to see UBI as the kind of national ‘Thiel-Fellowship-as-a-public-good’. ****Grants like that of Peter Thiel are typically designed to allow extraordinary individuals to pursue their passions and creativity, with a hope that it would lead to viable businesses, inventions, and be valuable contributions to solving the world’s problems. The majority of people feel pressured into the industrialised system (school —> university —> stable job as an employee) instead of taking risks and pursuing what they love or what could be meaningful for society, because of the risks of financial instability. You can’t afford creative experiments when whether or not you will have a roof above your head and food on the table depends on your income that month.

I therefore view UBI as a way to ensure that basic necessities are covered for all individuals equally, allowing them the luxury of undertaking risks, unleashing creativity, and focus on building things that make the world better.

UBI for Nation3 Citizens

I’ve been thinking about ways we could implement UBI for Nation3 citizens, as I think financial security is one of the most fundamental services a nation state can provide.

There are two major problems when thinking about UBI:

  1. Sybil resistance, or in other words how to make sure an attacker cannot create thousands of accounts to drain UBI funds.

  2. How to create a sustainable pot from which UBI can be distributed.

Sybil Resistance

For almost any use-case in Web3, you have to achieve some level of sybil resistance, and have a way to link the user address to one physical person. For UBI it’s particularly crucial since otherwise you would essentially be offering free money ‘up for grabs’ for any attacker to cumulate at the expense of people who actually need the UBI.

Some of the most common ways to achieve sybil resistance include:

  • The (much-hated) KYC that requires people to submit trad-states-issued identity documents and proof of physical address. This method is obviously the least desirable when it comes to cloud nations as you are relying on old-fashioned institutions to prove to you that you’re dealing with unique individual.
  • Proof-of-stake, or locking up capital as a requirement for participation. This is probably the most common in current state of Web3, but when it comes to UBI it’s problematic, since it defeats the purpose: those who are most likely to need UBI are unlikely to have capital to stake in the first place.
  • Web of Trust mechanisms and social vouching, combined with reverse Turing tests, like in the case of Proof of Humanity. In short, this requires individuals to register and dox themselves by providing photos and videos of themselves speaking, and existing community members need to vouch for them. If anyone doubts authenticity of a profile, it can be disputed using a Kleros court.

While I think it’s a fascinating way to build a human registry, it takes away the individual’s right for anonymity, and essentially makes it the price to pay for UBI access. But it is probably the best model so far when it comes to UBI, and might well be the most viable when it comes to creating sybil-proof lists of humans on the planet.

When it comes to sybil-proofing citizens of your nation, however, there might be a better way.

Within Nation3, we’ve already been using SourceCred as a way to incentivise and reward involved citizens. SourceCred currently tracks user activity across GitHub, Discord, and Discourse. But what does that activity mean, if not proof that an individual in question cares about the ecosystem they are in?

To me, the below defines an involved citizen:

  • participation in Forum discussions (already tracked by SourceCred)
  • reactions and comments to news, proposals and announcements on Discord (already tracked by SourceCred)
  • community involvement on Discord or joining social hangouts on Gather (partly tracked by SourceCred)
  • active contributions on Github (already tracked by SourceCred)
  • voting on things that matter to them on Snapshot (not yet tracked by SourceCred)

With the addition of a few more parameters, as per the above, and a thoughtfully-set threshold, this SourceCred-based proof-of-involvement might actually be enough to achieve the level of sybil resistance we need for UBI when it comes to citizens within a defined nation.

Sustainable UBI source

Now that there is a way to account for involved citizens, the next question is: where will the UBI come from?

This will likely require issuing a stablecoin backed in part by $NATION. Aside from UBI, this can come in handy for a number of usecases:

  1. using it for payments within the ecosystem, eg to pay contributors. This will allow us to effectively use the treasury capitalisation without having to sell $NATION.
  2. using it as a stake for entering Agreements in the upcoming Court (initially $NATION will be used as collateral for Agreements, but given price volatility, a stablecoin would do a much better job).

The ‘sustainability’ logic comes from the way the Nation3 treasury accrues value: the stablecoin reserves would be linked with the growth of the Nation3 citizen base, and the scope of economic activity:

  • as more and more citizens join, more $NATION will be taken out of circulation, capitalising the treasury.
  • the more citizens enter into Agreements with each other and use the court (and in the future other services), the more $NATION gets locked, also capitalising the treasury.
  • the higher the value of $NATION, the more of a $NATION-backed stablecoin can be taken out, without having to sell $NATION.

Important to note that his is not by any means a proposal to issue a stablecoin - much more research and thought is needed, and Luis, 0xGallego and I are exploring routes for this - to be discussed in a separate post.

Conclusion

I think financial security is a fundamental service a nation state can provide, and one that can unleash creativity and boost economic activity, truly cultivating human capital.

Using the Source-Cred involved citizen model, and a stablecoin for UBI payouts feels like a good combination of maximum efficiency, minimum complexity, to achieve the outcome we want.

I would love to encourage a discussion on this, before making this a governance proposal and and forming a project around implementing this.

  1. “An Economic History of Singapore: 1965-2065” - Keynote Address by Mr Ravi Menon, 2015
  2. The Singapore success story: public-private alliance for investment attraction, innovation and export development, Sree Kumar & Sharon Siddique, 2010
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This is a great idea. More than just a collection of services, Nation3 needs a well-articulable vision and a galvanising purpose for being. UBI is something people can buy into and will attract like-minded people who are already working on the problem. Everything in due time, but we do need to attract other non-code contributors to our community. Not necessarily quantity, but some high-quality minds to work on our shared goals. This is something that can galvanise high-quality individuals outside of our core community

Without diving into the rabbit hole in this thread, I am 100% in favour of a stablecoin for many reasons, but to sum it up, we will not be a true nation without a currency in the traditional sense of the word. $NATION the token is not that, I see $NATION as an investment in the success of our project. Investments are to be saved, money is to be spent.

Some thoughts. In my opinion, we should focus on building a real stream of income. Relying solely on the price appreciation of $NATION IMHO is itself not sustainable. for sure, taking tokens out of circulation and finding sinks for the token will have some effect, but it’s not something we can truly control. Ultimately, income has to be generated to be distributed. I am 100% for 0 taxations, but we can generate income directly translates from an increase in the adoption of our services without it being predatory or taxing (which is the same thing)

For example, court services can and should be free at the point of use, but losing a case means by definition, the losing party was at fault and will have to pay some costs. Some of the bond can be directed at the UBI. This is not a tax as you would only pay if you broke an agreement that you signed up to. This is just one idea but building in fee capture mechanisms that do not incur costs on citizens that play by our shared rules but at the same time generate income for our nation will be key to how effective we are

One other thought. As it stands it costs ~$2000 to be a citizen. The people most in need of UBI cannot afford that, I know there are thoughts about how people can ‘earn’ citizenship, but I think this is something that needs to be thought of as a whole.

in summary, this is an excellent idea. we have a small community right now but the quality of the thought makes me super excited for what we can achieve

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I will have no more hunger, love and peace in our country on the clouds

It’s well described and great idea!
I think it’s also good to prove the “humanity” based on the Sourcecred contribution.

Two things I thought were

  1. Can be expensive to get citizenship

As AbuUsama also mentioned, it costs ~$2000 to be a citizen, that can be expensive for people who need UBI more.

It might be great if we can have “guest” or “prospect” role who can contribute to Nation3 without $NATION and they can earn $NATION to become a citizen instead of buying them.

  1. Is there any need/way to earn from outside nation, even if we create our own stable coin?

I just saw this message on Discord and those are great ideas to generate a steady stream of income to be sustainable

UBI is an excellent idea.

Herb Stephens here … co-founder of Democracy.Earth and co-creator of ProofOfHumanity.ID. I am PoH ID #1. :slight_smile:

Happy to help! (We spent years on these topics!)

Yes … utilizing a stablecoin was (and is) our approach … and ‘correct’ … but, yes, value must be perceived and created. We have some key insights … and happy to share/collaborate. (But I am super busy traveling (mostly off grid) next 10 days … so will have to circle back and maybe arrange a chat…or more time to elaborate).

LMK if interested.

Rooting for Nation3!!

Herb

4 Likes

That would be really fantastic @herbstephens! Would love to discuss / brainstorm this with you whenever you can - I can imagine there’s a lot we can learn from your experience.

Pinged you on Discord to coordinate :slight_smile:

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Some of the common resistance to UBI (along political lines) is because it is perceived as a freebie instead of something that is earned. The sybil-proofing methods you mentioned to identify involved citizens (who are participating in forums, Git, governance etc) makes the Nation3 UBI more like an earned incentive which is great.

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Hey @AbuUsama and @yukiw - thanks for the comments! Definitely very valid points.

My omission to not have included this here, but of course the UBI proposal would be, if approved, implemented after two of these things are in place (already discussed elsewhere):

  1. ordinary (not Genesis) passports issued with much much lower cost
  2. a way for individuals to get vouched for and ‘earn their way’ to get a passport - meaning that if community members are willing to vouch for them, they’d be able to apply for a passport, with it be able to participate in the internal economy (earn $NATION, enter into Agreements for work, etc), and then gradually be able to make the ‘loaned’ passport their own, with their own $NATION.

Regarding revenue generation - this for sure is a given, and there’s multiple ways it can be achieved. Eg when it comes to the use of the court, it could be that it’s free for Citizens (i.e. those that stake $NATION) because they already contribute to treasury capitalisation that way, but there’s a fee for its usage for Residents (i.e. non-Citizens who would like to use Nation3 services, like the Court and Agreements).

But yes, indeed revenue generation with multiple approaches (direct through fees and indirect through token demand) will be crucial!

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The UBI is definitely a great initiative and has a lot of advantages. In addition to the discussion on sustainability and revenue generation. @anastasiya mentioned something about a Nation3 VC in a previous forum post which I took some time to think about how it can be a great way to contribute to sustainability and revenue generation.
my thoughts are;

  1. Aside from policy implementations that are put in place to ensure the growth and sustainability of a Nation, Economies are centered around Commerce/trade of commodities it is now an issue of how a Nation3 can tap into the business world and grow its treasury well enough to sustain initiatives such as the UBI initiatives, relying on the citizens joining and the increase in value of nation3 is definitely a great step in the right direction and I believe other alternatives should also be explored.

  2. I believe the nation3 VC can explore investment opportunities in businesses dealing with commodities by targeting key sectors such as e-commerce, agriculture, and digital solutions with a focus on supply. The idea is to create businesses that generate revenue while the Nation3 treasury acts as a National reserve where a percentage of profit from these businesses can contribute to its growth.

  3. Incentives can be put in place for distributors and wholesalers for said business ventures to create a demand for the $Nation this will aid in the increment of the value of the $Nation whilst backing it up by real value. For Example wholesalers or distributors who pay in $Nation get x% discount on their purchases, this can sip down to the retail if distributors also offer incentives for retailers who purchase products in $Nation.

  4. Collaborating with exchanges to provide liquidity can also be a great way of generating passive income for the treasury.
    This is a great system for generating revenue and a use

Nation3 a happy big family, ubi takes talent should be rewarded

I’m wondering if we need to go faster, and a lot of people in the community want to go faster