Universal Basic Savings with DeFi
“Earning money is hard, saving is a lot harder”.
This is the fundamental premise the traditional banking infrastructure is built upon. It remains more important than ever, considering most banks are trying to extract as much wealth from their customers as possible. The concept of Universal Basic Income (UBI) is nothing new, dating back to the inception of Sir Thomas Moore’s 16th-century novel, Utopia. A global pandemic drastically changed the job economy landscape, an increasing financial gap between the working and elite class and increasing inflation seen across many countries throughout the world, the topic of UBI has never been more relevant as companies’ technological capacities continue to grow within all business sectors, rendering many jobs obsolete. Many wonder if their jobs will still be available in the future. That is, if their employers are even able to rehire them after the conclusion of pandemic restrictions that have crippled or destroyed many businesses.
Many of the world’s top minds and most successful have called for the eventuality of UBI, with the world’s richest man, Elon Musk, once stating, “I think there is a pretty good chance we end up with Universal Basic Income… due to automation. I am not sure what else one would do. People will have time for more interesting, more complex things. We have to figure how to integrate in the future with advanced A.I., that’s going to be one of the toughest challenges”. Until a UBI based system is figured out by major governments, it is up to entrepreneurs and innovators to create the next new-age systems that can help lift those who are most in need out of a dire situation.
Can Blockchain and UBI Be Combined?
Permissionless blockchain offers many use cases primed to help bank the unbanked and help those systemically exploited or underserved. As a financially inclusive technology, especially with the rapid rise of DeFi applications, new ideas are being implemented that may one day change the world fundamentally. We had already seen an Unconditional Basic Income launch by Circle UBI last year. Governments are still grappling with UBI implementation's basic idea, which gives a broken nature of the traditional system's execution capabilities versus what blockchain can do at scale.
We at BlockSwap Network are currently working on enabling Universal Basic Savings (UBS), a DeFi solution with many similar properties to UBI, but with a mission that empowers the end-user.
UBS allows for creating $avers accounts for its users FIAT money (native currency), with a high yield, USD based universal savings accounts that perpetually guarantee minimum yield for its owners. Meant to be as inclusive as possible, putting the power back into the users' hands, $avers accounts are 100 percent on-chain, have no KYC (know your customer) regulations, are fully self custodial, and accessible to anyone, anywhere in the world with an internet connection.
Enabling anyone to have a savings account from their smartphone.
The current banking system is a massive trust-based network of people and entities who are really hard to trust, as we’ve seen in the past. However, having our money safe is still a basic human need, so how do we know the banking system will be transformed from this trust layer to a technology layer?
Banks are ultimately in the relationship business, they have a relationship with you, and you put your money in the bank, and you trust them, and then there are all kinds of things we tape on top of them to make you trust them like lenders of the last resort and things like the FDIC and so forth.
There are 3 billion people who aren’t in the regular banking system who have online access; the cost per customer is too high relative to the lifetime value per customer, so they’re incompatible with the existing banking system. Still, they demand to be banked and be easily digitized to participate in the modern economy. A population of financial DNA is built from the heart of mobile banking. Sending funds over Venmo, Monzo, Wechat, and Whatsapp, many are familiar with digitalization but constantly trying to find a way to handle their money more transparently. At the end of the day, users want a service that can give them absolute control over their wealth and earnings.
To bring this to reality, we have to have digital money that can’t be seized quickly like cash or censored on a permissionless blockchain. These attributes are perfect for crypto enabled depository accounts, making the technology a natural fit. This is one very particular case of how Blockswap Network is planning to revolutionize the cash set of things, the identity set of things, and the banking set of ideas, concepts that are all interconnected to each other.
So, what does the creation of a perpetual high yield USD based saving account that is accessible anywhere from around the world mean for a global society? It means that soon, anyone with an internet connection will be able to start a life-changing savings account that can never be shut down by a third party or government. It means citizens faced with an inflationary FIAT currency can opt into a crypto-backed system to hold their wealth in USD based savings accounts with an exceptionally high yield safely, almost guaranteeing higher wealth preservation than holding the local currency. This service used only to be accessible to extremely high net worth individuals or influences with connections in more stable foreign countries, but with the implementation of UBS on $avers, anyone can start on their journey to financial emancipation with little less than a dollar - a piggybank for your dreams.
$aver USD account will be fully collateralized and protected without the need for a traditional oversight body like the FDIC, utilizing DeFi and smart contracts that are changing the way people view the powers of blockchain. With the inherent composability and self-enforcement nature of DeFi, it has never been easier in human history for the average, working-class person worldwide to safely preserve their wealth. Blockswap Network hopes to bring as much value as possible to users everywhere with this new, potentially life-changing platform.
More to follow in the coming days on UBS!
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Disclaimer: The above content is published for informational purposes and should not be construed as an investment thesis.
