Actually Banking the Unbanked on Interest Only

Actually Banking the Unbanked on Interest Only

One of the most compelling potentials in the Web3 world is the capacity to “bank the unbanked.”

To some degree, this is happening, but intuitively the barriers are pretty obvious. Wallets, exchanges, gas fees, DAOs, and even the understanding that these “fake monies” can translate into anything of real value are still fairly technical and exotic concepts that don’t easily make themselves accessible to most people.

To bridge the gap, there’s three degrees of freedom to explore, and they are all being explored:

  1. Make the interfaces easier to use
  2. Improve the educational ecosystem around Web3 stuff
  3. Increase the financial incentives for people to get over the understanding and usage barriers

As internet technology matures, we observe most of that energy goes into 1, typically. So as long as there’s competition to create great products in this space, we can take the progressive discovery of better interfaces for granted.

Accomplishing 2 happens somewhat passively from activity on social media, but more can be done here actively.

Accomplishing 3 is the most novel item on the list, and there’s some ideas around it that I’m interested in.

For the rest of this, I’m going to focus on 3, and then talk about how expand that into 2.

Proof of Humanity’s UBI Token

What really got me thinking about this problem set is Proof of Humanity’s UBI token. Basically the deal is, the you go to, you sign up, someone vouches for you, and then you start drawing UBI tokens at a rate of 1/hr.

In practical usage, this system has some very appealing characteristics. At the time of this writing, UBI tokens are trading ~90 cents, which means any member of this network makes about 650 dollars per month. This is pretty cool if you live in the United States, but there’s lots of places you could be from where this is absolutely incredible.

At present, there’s a number of challenges to making this concept accessible to the people who would need it most. Just off the top of my head, those are:

  1. The marketing problem — people actually being aware this thing exists
  2. The education problems — knowing about cryptocurrency, Uniswap, cryptocurrency wallets, decentralized identity concepts, and fiat on and off ramps
  3. The financial problem — fees cost money, so everything from the PoH registration fee, to the exchange and transmission fees are pretty painful for those who would actually benefit the most
  4. Other practical problems — having the requisite devices and internet connection to use any of this stuff at all

How to Solve: Interest Only Philanthropy

I had an idea related to this which keeps paying dividends… no pun intended? Nah, pun intended. It’s fine.

Reasoning about the logical extremes of half baked ideas is kind of my thing.

So what this led me to is realizing that locking up money — in reasonable but kind of large amounts — and generating interest could go a long way to help bank the unbanked. Thus, I coherently get us back to the title of this thing.

Basically, I think what could be done, is to make a Yearn vault that discloses its humanitarian goals, and donates most, if not all, of its interest earnings to the Proof of Humanity DAO. It could then be used to solve a few key problems.

  1. It could pay the L1 registration fees so people could register for free
  2. It could pay to market the platform so the message is perfected and more people hear about it
  3. It could be used to pay representatives of the network to physically host events around the world, go into communities to educate people about the requisite concepts, and get them registered so that they can start drawing a UBI

That’s the idea. I thought it was cool. All feedback welcome.

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