Supporting the GoodDollar Project: Step by Step Guide to Staking
In collaboration with the GoodDollar project, Universal Basic Income on blockchain.
Universal Basic Income (UBI) is, at its core, a simple concept. There’s enough wealth in the world to provide unconditional basic income to everyone who needs it, no matter their background or geographic location. In some sense, UBI is the human response to the disruptive changes to our way of life caused by rapidly evolving technologies, like artificial intelligence and machine learning.
While UBI faces plenty of political and economic challenges in the real world, blockchain technology allows us to create digital UBI experiments. GoodDollar is one such experiment. In simple terms, it uses the power of crypto lending protocols to generate interest income on deposits. That income is then distributed to claimers. Anyone can claim their UBI through the GoodDollar wallet, no strings attached.
The success of the project depends on many factors, not least of them attracting enough capital to generate a meaningful amount of universal basic income. In the Gooddollar ecosystem, people who supply capital are called stakers. Staking, for our purposes, is equivalent to a deposit, similar to depositing money into your bank account.
In traditional finance, banks use our deposits to make loans and generate investment returns. They share a small portion of those returns with us, which is where the interest on your savings account comes from.
In the crypto sphere, the underlying process is very similar. However, instead of banks, we have decentralised platforms where rates are set automatically, based on demand and supply for a specific token. Because there are no intermediaries, the interest generated on crypto-assets is significantly higher than what’s on offer in the traditional financial system.
Even though crypto lending has been around for a couple of years, it’s still a novel concept for most people. To show everyone that it’s not as complicated as it might sound, I wanted to share this how-to guide for staking capital with GoodDollar. I hope that it makes it easy for anyone to support the vision of the universal basic income and answers some of the common questions about staking.
Your step-by-step guide to staking with GoodDollar
Now, depositing funds into the GoodDollar protocol can currently be done in only 1 cryptocurrency, Dai. Dai is a USD-pegged stablecoin, and its value should always equal 1 USD. As with a bank account, stakers have full control over their deposit and can withdraw it at any time. Moreover, the dollar value of the deposit should remain stable as it’s denominated in Dai.
Step 1
First, you need to get your hands on some Dai. There are a couple of ways to do so. One is through a crypto exchange like Binance, Kraken or Coinbase, for example. You can fund your account with a bank transfer, usually at no cost. Most exchanges are regulated entities so you will have to verify your identity.
Another option is to use a mobile app like Dharma or Argent, or even a web-based application like Zerion. They offer a more seamless and user-friendly experience but might come with higher costs.
It’s worth mentioning that Revolut, CashApp and PayPal have recently began supporting cryptocurrency purchases. The functionality of these apps is quite limited, however, and none of them actually support Dai
Once you fund your exchange account, you can go ahead and purchase some Dai. Because Dai is a stablecoin, its value should be as close to $1 as possible. Some deviations from $1 do happen, however, based on supply and demand for the coin. If you are using a credit or debit card to buy your crypto, be mindful of the fees. Exchange fees are often below 0.5% for a transaction, while purchasing crypto with a credit card can cost more than 4%.
Step 2
Step 3
Now that you have some Dai in your wallet, you can deposit it with GoodDollar, helping power a global UBI ecosystem!
While the staking user interface is currently under development, there are still two ways to interact directly with the GoodDollar staking contract. One is by using GoodStake, a tool built by a member of the GoodDollar community, @Bert0x. Here’s a brief user guide. Withdrawal functionality has recently been added as well although partial withdrawals are not supported. At the moment, GoodStake is testable on the Ropsten Ethereum testnet and is also live on the Ethereum mainnet.
Second option is to interact directly with the GoodDollar smart contract through Etherscan.
I would suggest reaching out to the team on Telegram, if you are considering staking, and they’ll happily walk you through the latest developments.
Once you have sent your Dai to the GoodDollar deposit contract, your job as the #Goodperson is done! At the moment, all of the interest generated on your deposit goes into the UBI pool. In the future, however, 50% will be delivered to your GoodDollar wallet in the form of G$.
Step 4
Step 5
It’s also worth noting that you can donate Dai and ETH to the GoodDollar project. Your support would certainly be appreciated and the team is working hard on the user interface to enable easy donations, deposits and withdrawals.
I hope this guide answers some of your questions about staking. If you have any other requests or suggestions, don’t hesitate to get in touch with myself or the awesome GoodDollar team.