eToro is spending $1 million to start GoodDollar, a blockchain-based UBI experiment…?

Try to wrap your heads around this one: The eToro cryptocurrency exchange is spending $1 million to launch something called GoodDollar, an open-source blockchain project that — the company hopes — will create some form of globalized universal basic income. To me, at first glance, it reads more like a blockchain-based charity.

You can sign up for GoodDollar right now and start receiving GoodDollar tokens in your GoodDollar wallet. GoodDollar’s website says that $180,000 of reserve-backed tokens have already been distributed. Anyone signed up will receive some amount of GoodDollar tokens every day, but the amount varies depending on a lot of complicated factors.

Where does the money come from? If you’ve been following DeFi at all, you know all about yield farming — basically staking coins in various blockchain protocols to earn maximum returns at all times. (You’re staking to earn interest in return for providing liquidity to a lending market in most cases.)

Well, with GoodDollar, some people are just volunteering their assets to be staked via GoodDollar’s system, which returns some of that resulting interest to you while setting aside the rest in the GoodDollar’s reserve, which is then used to back the coins that GoodDollar distributes. This isn’t a perfect system to be clear: If you’re a staker, it’s almost certain you could earn more elsewhere.

And that’s why this feels more like a charity to me. Sure, it’s possible that blockchain technology will empower some future universal basic income system, but you’d think that system would have to depend on much more than just generous cryptocurrency bag holders who are happy to redistribute their own wealth solely for the common good or to support this eToro project.

(via CoinDesk)