Introducing GloDollar a fully backed and insured stablecoin issued by Brale that directs 100% of its interest income to basic income programmes

Ecosystem
1

image
image1329×720 30.9 KB

As part of the work creating alternative financing structures for bootstrapping grass-roots networks in the ecosystem we have been looking for an alternative to both USDT (Tether) and USDC (Circle) that can offer greater trust, transparency and room for innovation.

We’re excited to introduce the GloDollar team and issuer Brale to the ecosystem.

Founded in late 2021 and funded by Sid Sijbrandij the founder of Gitlab, Glo’s key differentiator is its commitment to providing 100% of its interest income to basic income programmes.

Initially, Glo’s partner organisation for these disbursements is GiveDirectly, which was chosen for its low cost of operations and high level of transparency and accountability.

The aim is to bring integration to Assethub enabling initially Glo issuance and sufficiency then the development of additional branded stablecoins issued by Brale natively within the Polkadot ecosystem - a feature that promises to unlock many new possibilities especially in relation to collectives.

Why stablecoins matter

In three years, the treasuries of Kusama and Polkadot have spent over $50m+ on ecosystem development.

Right now teams only have the option of receiving $KSM or $DOT, highly volatile assets that make managing funds hard.

There is no stablecoin alternative nor opportunity to hedge risk for those wishing to still receive funding in the native asset.

This adds to the pressures of an already complex, chaotic and stressful environment, especially for those operating outside the structures of Parity/W3F who generally lack business support, but are essential to the vitality and evolution of the ecosystem.

These network native businesses require transparency, regulatory clarity and long term sustainability - precursors to fostering innovation in the next phase of crypto’s evolution.

With interest rates rising around the world, the business model of fully backed stablecoins may not be sexy, but it can provide consistent returns that scale in line with adoption.

Novel financing instruments such as structured offerings by ABO Digital that enable networks to access a draw-down facility rather than more dilutive venture financing also have a requirement for stablecoins which was what led us to the team at Glo.

Next steps

We are working with GloDollar and Brale on upcoming proposals to Kusama and Polkadot treasuries so there will be ample time to ask questions, give feedback and get to know the people involved via AAG etc.

We will also need to work with @joepetrowski and the system parachains team on some aspects of the integrations since we’re operating external to the processes that onboarded USDT and USDC and then of course there will be the governance process itself including making assets sufficient in Kusama and Polkadot.

Final thoughts

Balancing order and chaos at the core of the ecosystem is a priority.

Right now this is not an easy place to build a business - but that is to be expected at this early stage, improving these conditions for contributing teams will be a key to unlocking growth.

Unlike Tether and Circle, GloDollar and Brale are at an early stage and therefore motivated to innovate alongside Polkadot - it is this alignment of interests that can allow us to create conditions to play more positive sum games within the unique governance architecture of Polkadot.

With AssetConversion Pallet and forthcoming UIs there is then a path to leverage Kusama and Polkadot treasuries as LPs (alongside holders) within liquidity pools, driving fee revenues in stablecoins back to the treasuries in the process and ensuring more sustainable growth whilst also generating positive impact.

When matched to other ongoing work, we then have a foundation for bootstrapping a new kind of community owned and operated parachain structure that can provide balance to the tensions evident between system and for profit varieties per The state of DotSama, unlocking more radical innovation in the process.

In turn, this can lead to more effective and concentrated impact as we look forward to the arrival of AgileCoretime and the blockspace markets that follow.

2 Likes
2

I think we should give GloDollar a very warm welcome!

I do see promising synergies with Encointer and I even think that the impact of GloDollar could be multiplied by using Encointer communities to funnel basic income to individuals compared to pure cash transfer and even enhance the decentralization of the yield distribution process.

I do sympathize with the project’s ambition. However, we should not miss to understand how yield-donation projects like GloDollar and GoodDollar work: In the end they are based entirely on donations. Even if the donation can be described as opportunity cost (which feels less like a loss to donor), the investment risk stays with the provider of capital. The basic income that comes from those projects comes entirely from returns on investment. If these returns shrink, so does the basic income. Still, I’m certainly pro redistributing capital returns to reduce poverty and generally reduce inequality. So, if there are yield donors, let’s distribute those yields!

3

That would be great.

I’ve been thinking a lot about how we combine Encointer’s “rituals” with already engaged fan communities and if we see the path that Glo and Brale are on as a long tail of branded stables that are easy to understand for groups / collectives / movements and where the yield can be directed to those in the most need.

This educated allocation is then where the collective intelligence can shine through and where we can leverage viral feedback loops to incentivise economic growth where it is relevant.

You’re right about needing to keep things growing, that’s the challenge but I think we have a chance given we’re not just circulating the same ideas but are also unlocking new innovations, products and services.

4

Related

5

I am still of the opinion that stablecoins should be based on the price of gold, energy and / or real world services provided. Giving money away whilst simultaneously trying to actually uphold that same money as being, having value seems at odds, not long term feasible.

1 Like
6

I absolutely agree, just selling down KSM or DOT into fiat does nothing for the value accrual to the tokens but there is a path to this happening.

  • for KSM/DOT there needs to be demand for the security service the networks provide via coretime revenues
  • the networks that create this demand can have simple and focused value accrual models of a manner you describe, with some “hard asset” at the centre of their treasury functions that also offers some direct revenues in the same manner as the coretime revenue.
  • if these surrounding coretime projects create and capture value in a manner uncorrelated to that of their parent then we begin to build a sustainable and cooperative network of uncorrelated, revenue producing assets.

Then there is indeed a path to lowering the reliance on fiat based stables but we need them for a while as part of a balanced ecosystem.

I don’t believe gold is the right route tbh, I think it will be more novel stores of value that we create.

There is more coming on this.

1 Like