General & Tokenomics

The goal of GoodDollar is to function as an effective medium of exchange; this means that price volatility needs to be managed and minimized. Reducing the speed of leverage is a necessary and responsible change in terms of creating a more sustainable, balancing circulating supply of G$.

There is no pre-mint to G$; G$ are minted as new CDAI assets are added to the Reserve; the rate of G$ issuance for the protocol is defined as the Reserve Ratio. The reserve ratio currently is set to automatically reduce by 20% every year. This means that if on Year 0, every $1 dollar added to the reserve —> 100 G$ minted; then Year 1, every $1 dollar added to the reserve —> 120 G$ minted. This proposal slows the reduce by G$ Reserve Rate to 15% a year, rather than 20%.

The goal of this change is to slow the rate of annual issuance of GoodDollar relative to assets held in the Reserve, to encourage sustainable growth with minimal price volatility.

The proposed changes mean that fewer G$ will be minted on a daily basis, because the rate of minting G$ will be decreased. The most immediate impact of this on claimers is that the daily distribution of G$ will decrease.

However, these changes are in service of creating a more sustainable economic policy for GoodDollar long-term future. In order for G$ to serve practically as a coin for commerce in countries all over the world, it must function with relative predictability, which leads to this improvement to slow the rate of issuance.

The price of G$ should not be immediately impacted by these changes.

The value of a currency is derived from two sources: a reserve of another asset that serves to collateralize and provide a market for the currency and, secondly, through intrinsic value as a medium of exchange and store of value. G$ is a reserve-backed coin designed to gain usage and value trough user adoption. That’s why it’s important to control the volatility of the asset and to keep growing sustainable over time.

Mainnet stakers who will mint out larger positions in G$ rewards will be encouraged to deploy their G$ to support the ecosystem, via liquidity campaigns yet to be launched in partnership with Volt and Fuse, and the forthcoming savings feature, where G$ held can be used to earn more G$.

On Ethereum network the GoodCompoundStaking (DAI) and GoodAaveStaking (USDC) contracts are going to be replaced by a new version. These new contracts will eliminate the G$ rewards for stakers, but will continue to deliver GOOD token rewards.

The yield generated by the stakes in third-party protocols (around 5% APY) will continue to fund UBI.