“To give away money is an easy matter and in any man’s power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man’s power nor an easy matter.” — Aristotle
The following brief is a continuation of “Tokenizing Access to Social Services Pt. 1,” and emphasizes the new utility gained from tokenizing social service assets on-chain. Outside of the the economic gains in liquidity, there are also some new cryptoeconomic attributes to the model that (1) make it easier to fund social services in an accountable way, and (2) make it easier to distribute social services on an automated and on-going basis.
Peer-to-Peer Social Service Philanthropy
RFST models also open new funding methods to help support and sustain social services. Instead program’s being completely reliant on the due diligence and consensus of the federal government’s funding, philanthropists could donate funds to the RSFT smart contract, and, in doing so, mint tokens for waiting list candidates to use. In fact, this is exactly how the Bancor model’s Smart Tokens operate — new tokens are minted via the sale of the connecting liquidity token (that which backs the smart token).
As more liquidity is pumped into the system, the system has a greater ability to support the disbursement of services. Philanthropist contributions can be directly traced to the person they’ve helped, and these donors can be rewarded via tax credits for their charity.
The funding model introduces the capability for public services to leverage peer-to-peer funding to offset the sometimes inadequate funding provided by the federal government. Here’s what the donation process could look like:
Web and or mobile application exists to take in donations to support a more generalized, cross-jurisdictional housing assistance fund that backs the minting of housing voucher tokens
Philanthropist can choose which jurisdiction they’d like to contribute toward
Philanthropist’s donation (most likely made in fiat currency) is converted to stablecoin (1:1) or tokenized fiat backing the housing voucher tokens.
Ecosystem fractionally mints housing voucher tokens based on the salary and reported rent of next recipient in the waiting list of that jurisdiction’s housing authority (donation to housing voucher token minting ratio automatically calculated)
New housing voucher tokens disbursed to recipient (once at least 12 months of housing assistance funding is secured from donations, i.e. 12 housing voucher tokens). All transactions are on-chain, making donations easily traceable, even when they are converted to housing voucher tokens
Airdropping for Social Impact
Another unique feature of a tokenized housing voucher model is the ability for housing authorities to disburse assistance to waitlisted recipients as soon as funding is availble using airdrop.
An airdrop for a cryptocurrency is a procedure of distributing tokens by awarding them to existing holders of a particular blockchain currency, such as Bitcoin or Ethereum. There are two ways creators distribute their tokens: selecting random wallets or publishing the event in airdrop lists.
Airdroping assistance can be automated for pre-approved, waitlisted recipients when funding mints new housing voucher tokens, saving the operational expenses and fighting recipient waitlist backlog.
Better User Experience: Abstracting Out the Blockchain
Of course, one major factor to develop a token model like this is to completely abstract out any mention of the blockchain from the user’s experience. Even the traditional representation of ERC20 wallets must be greatly simplified so that consumers can transact if they are sending each other credits or using Venmo.
For the development of this model, a lengthy and in-depth research and design spring is required to ensure that the user experience is one that is as beneficial and simple as the model’s backend operational benefits. A few UX obstacles to overcome are the following:
Easy flowing donations from fiat to stablecoin using debit and credit cards
Ensuring users never need to set gas for their transactions, and never have to pay transaction fees while transacting on the network
Private key management and wallet security to maintain their housing voucher tokens
Simple interface so that voucher recipients and landlords can easily transact (send & receive)
Simple accounting interface that summarizes statistics/analysis of network’s transactions for housing authorities
Building Sanboxable Use Cases
Of course, this is all great in theory, but the major issue with implementing models like this, particularly in western countries, is the government’s inability to exempt the public use of token models in local sandboxes. Doing so could generate a great amount of insight of how models like this can operate in a federally sponsored ecosystem, creating new policy for the cryptoeconomic world — and new assets for the social service world at large. If we can muster the research and concentration as a community to try these models out, we may develop cryptoeconomic models that further enable humanity’s ability to ensure everyone is fed, housed, and actively able to enhance the quality of their own lives.