[ARCHIVED] Embedding philanthropy into Mantle’s treasury

[Curated Archive] Mantle Organization
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Title

Embedding philanthropy into Mantle’s treasury

Authors

This proposal is authored by Bram Voets, Growth at the Glo Foundation, in collaboration with Garm Lucassen, CTO at the Glo Foundation.

Background

We propose that Mantle swaps $1M of its treasury (0.45% of its current stablecoin holdings, and 0.06% of its total treasury) for Glo Dollar, a stablecoin that generates basic income for people living in extreme poverty.

Doing so has the following benefits:

  1. Mantle would embed philanthropy into its treasury, and we expect that eventually, this $1M in Glo Dollar would be enough to lift 50 people out of extreme poverty at no cost to Mantle.

  2. By adding USDGLO alongside its USDC and USDT holdings, Mantle would further diversify its holdings in stablecoins.

  3. Mantle would support the development of an alternative regulated stablecoin that benefits the public and the broader crypto ecosystem, instead of a few shareholders.

It would be the first time for Mantle to embed philanthropy into the very core of its treasury.

The case for Glo Dollar

Glo Dollar is a fully backed stablecoin that enables holders to help end extreme poverty, without donating anything.

Glo Dollar is US regulated and 1:1 backed by a reserve of cash and US Treasuries. When the Glo Foundation receives revenue from the reserve, they donate it to GiveDirectly’s basic income programs that lift people out of extreme poverty. (See this article for why we donate to GiveDirectly.)

At scale, we expect every $20,000 of Glo Dollar market cap to lift 1 person out of extreme poverty. At Tether’s current market cap, that corresponds to lifting four million people out of extreme poverty. Even at smaller caps, this amounts to millions of dollars of money generated for GiveDirectly.

By choosing to put some of its treasury into Glo Dollar, Mantle can embed philanthropy into its everyday operations and leverage Mantle’s treasury as a force for social good.

Mantle, pioneering a vision in shaping a collaborative decentralized economy, can lead by example by integrating Glo Dollars into its treasury. This step demonstrates that this economy can also uplift the world’s most underprivileged.

Though not digital, a global basic income for anyone who falls below the extreme poverty line can be considered an important public good. Glo Dollar is a donation-independent funding mechanism that can support such a basic income perpetually and at scale. Anyone holding Glo Dollars contributes to this funding mechanism at no cost. Affecting 700 million people, extreme poverty is a highly costly problem in terms of human potential and wellbeing, but it is solvable through unconditional cash transfers. The bottleneck for these programs is funding.

As a final consideration: the incumbent stablecoins already function as a public good, yet are managed by for-profit entities incentivized to choose the benefit of shareholders over the benefit of the ecosystem. Even if you do not hold USDC or USDT yourself, most of DeFi runs on them under the hood.

Check out the Glo Dollar website for more information on everything you might want to know about Glo Dollar, such as how Glo Dollar works and how we issue Glo Dollars in a regulatory compliant manner by partnering with Brale.

Further diversifying Mantle’s stablecoin holdings

At the time of writing, Mantle holds 13.76% of its treasury in stablecoins; 9.74% (or $154.7M) in USDC, and 4.02% (or $63.91M) in USDT.

While USDC is a low-risk and well-run stablecoin, the market’s response to Silicon Valley Bank’s collapse and the subsequent depegging of USDC emphasize the importance of mitigating exposure to a single stablecoin. By diversifying its stablecoin holdings, Mantle can enhance its resilience and ensure continued operations.

Beyond individual treasuries, the broader crypto ecosystem stands to benefit from increased stablecoin diversification. Stablecoins are critical crypto infrastructure, facilitating liquidity, trading, and financial operations in the entire crypto space.

The over-reliance of the ecosystem on the USDC / USDT duopoly creates a dangerous dynamic in which any disruptions or regulatory actions targeting a specific stablecoin can have far-reaching consequences. The USDC depeg had endless downstream effects, and Vitalik says the duopoly has too much power over Ethereum.

Proposal

We propose that Mantle exchanges $1,000,000 from its current stablecoin holdings for Glo Dollar and commits to holding the Glo Dollars.

To execute, we propose the following steps:

  1. Appoint a DAO coordinator who collaborates with the Glo Dollar team on this proposal.

  2. Swap USDC/USDT for Glo Dollar using Uniswap or an OTC desk.

  3. Transfer exchanged Glo Dollar to Mantle’s treasury.

  4. Co-market the completion of diversification efforts with Mantle and Glo Dollar communities as well as the broader world.

Glo Dollars are always exchangeable 1:1 for USDC with our issuing partner Brale, should the need arise to revert this position for any given cause.

Draft vote

Swap $1,000,000 of Mantle’s current stablecoin holdings for $1,000,000 Glo Dollars, do not swap, or do swap after making specific changes to the proposal.

  1. Yes to swap $1,000,000 of Mantle’s current stablecoin holdings for Glo Dollars.

  2. No do not swap current stablecoin holdings for Glo Dollars.

  3. To swap $1,000,000 of Mantle’s current stablecoin holdings for $1,000,000 if changes to the proposal were made.

Our objective is for everyone to prosper through this proposal: Mantle, Glo Dollar, and, most significantly, the 700 million individuals living in extreme poverty.

Supporting Information

Risks and cons

  1. Smaller market cap = less liquidity. While we’re working our way through the cold-start problem of growing a stablecoin’s market cap, our market cap is only ~$1.5M at the time of writing. Worth noting that Glo Dollars Glo Dollars are always exchangeable 1:1 for USDC with our issuing partner Brale.

  2. The Glo Foundation has not yet donated to GiveDirectly. As soon as we reach a market cap of $2M, Glo Dollar will initiate donations to GiveDirectly (see more info about revenue sharing scheme with Brale). Progressing from $1.5M to $2.5M would immediately pave the way for donations to GiveDirectly. With Mantle, we can begin to start lifting people out of extreme poverty.

  3. Glo Dollar is not a yield-bearing asset. Adopting Glo Dollars would be a choice made in light of the three benefits shared under ‘Background’.

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Hello guys! First of all, I want to congratulate the initiative, philanthropy is something I admire when it`s part of a person’s character or an organization’s values. I did a brief search on the GLO website but I couldn’t find some things that I think are important when a company supports charitable causes. I wanted to know which regions are supported, which partner companies distribute or manage this money for people in a state of extreme poverty, proof that the action is being carried out, among other things, I only saw some investors. For this reason, my vote is no until there is more clarity on the GLO’s intentions.

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Hi DTravel, thanks for your enthusiasm.

Glo Foundation directs every penny it earns from the reserves backing the Glo Dollar straight to GiveDirectly. They do the actual work of providing basic income. GiveDirectly identifies recipients living in extreme poverty (less than $2.15 per day) and sends them money on a monthly basis. Their largest basic income programs are in Sub-Saharan Africa (e.g., Kenya, Togo, Liberia). An increase in our market cap = more funds to GiveDirectly = more people out of extreme poverty.

By channeling all our earnings to GiveDirectly, we enable our team to concentrate entirely on marketing, partnerships, and boosting the Glo Dollar’s market cap. We see the advantage of permissionless innovation, especially when building upon a reliable model like GiveDirectly’s. Here’s why:

1. GiveDirectly has a proven track record in administering basic income initiatives, distributing over $700 million directly to the hands of 1.5 million individuals across three continents.
2. A lot of research on GiveDirectly’s work has been carried out, and they consistently get top scores from charity evaluators, such as Charity Navigator and GiveWell.
3. They’re exceptionally transparent about finances and impact, and 90% of each dollar donated to GiveDirectly is delivered to someone living in extreme poverty, after costs.

The only challenge we see for GiveDirectly is that they’ve only been able to reach a small percentage of their technical capacity (they’ve delivered over $700M, but have the operational capacity to deliver in excess of $5B each year). With the antipoverty stablecoin, we are unlocking new sources of money to provide more funding = more people out of poverty.

We’re projecting that, at scale, every $20,000 of Glo Dollar adoption will lift one person out of extreme poverty. This is true when 80% of Glo Dollar’s backing assets are invested, an annual yield of 4% is made on these investments, and 75% of the yield goes to us, the Glo Foundation. Under these metrics, we’d earn and donate $480 to GiveDirectly. Enough to lift one person out of extreme poverty.

Based on your comment, I’ll share some other content you may enjoy reading:

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The delegates’ primary mandate is to be responsible for the health of Mantle Treasury and benefits of the Mantle community.

Be that as it may that USDGLO is able to help some people (a claim itself will require third party corroboration), a delegate cannot stay within their mandate by recommending to have Mantle Treasury hold a position that is more than 500 times larger than the daily trading volume (which serves to gauge its liquidity) of USDGLO, which stands at $1,900.89 in the last 24 hours according to CoinGecko.

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Hi Igneus,

Thanks for your reply.

Trading is low on the DEX because of how USDGLO is being used at the moment: as a buy-and-hold (we’ve been growing early market cap by pitching DAOs to hold USDGLO in their treasuries). While daily trading volume is usually a good gauge of liquidity, it’s less relevant with Glo Dollar: Glo can always be minted and redeemed 1:1 for USDC and USD (with no fees). Many buyers prefer this route over DEX swaps.

This means that practically speaking, Mantle will have access to ‘infinite liquidity’ - any USDGLO holding can always be 100% liquidated for USDC.

If you’re curious about where one would exercise that liquidity:

  • US based organizations with legal entities can mint/burn directly with the issuer Brale.
  • Off-shore based organizations with legal entities can buy/sell with 1Konto.
  • Unincorporated DAOs (no legal entity) can buy/sell with Skyline Digital.
  • If Mantle decides to diversify into Glo, we’re happy to help find the right path.

The Gitcoin DAO, for instance, voted 83% yes on diversifying 10% of the stablecoin holdings in their matching pool to Glo Dollars and they’re now in the process of swapping that through 1Konto. Gitcoin recognized that diversifying their assets across more stablecoins means relying less on just USDC/USDT, while contributing to lifting people out of extreme poverty.

Of course Glo Dollar is still a nascent stablecoin, but more and more builders are integrating Glo Dollar into their platforms, providing equivalent support for USDGLO as they do for USDT, USDC, DAI. Our Glo Consortium now features several on/off ramps, payments, credits cards and we’ll soon be welcoming AR/AP platforms and HR Admin and Payroll providers. See here a full picture of the Glo Dollar ecosystem and how we expect to grow it. There may be platforms you recognize and if you have some suggestions for platforms we should pursue support from so that Mantle has more utility for their Glo Dollars, please let us know.

With regards to the earnings to lift people out of extreme poverty, we start distributions once we reach a $2M market cap. You’ll see these as on-chain donations to GiveDirectly, so they will be transparent. In the meantime, the fact that GitLab CEO Sid Sijbrandij funded this project should provide you with some trust we’ll follow through on our promises. We’re currently at ~$1.5M, so should this proposal be supported by the Mantle community, we’d reach $2.5M and will start lifting people out of extreme poverty.

As we scale up, the economics quickly turn highly beneficial. We expect to be able to keep 1 person out of extreme poverty per $20,000 market cap, meaning:

  • At a 5% market share ($6.2B), Glo Dollar would lift 310,000 people out of extreme poverty
  • If we grow as large as USDC ($24B), Glo Dollar would lift 1.2 million people out of extreme poverty
  • If we grow as large as USDT ($89B), Glo Dollar would lift 4.45 million people out of extreme poverty

As an early adopter, Mantle would help unlock this future and contribute to stablecoin diversity; ending extreme poverty; and uplifting the public’s perception of crypto through concrete, real-world impact.

With Mantle as a first mover, we strongly believe we can build on the momentum to get more organizations with large crypto treasuries to diversify into USDGLO.

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Hi everyone,

We just announced Gitcoin swapping the $100,000 from USDC into USDGLO more widely with our community. I think it’s relevant to share here as it offers valuable context on our impact + stablecoin diversification.

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Adding a response here from the Mantle’s #governance channel on Discord to round out the information and to add the relevant links

Question, from @Pierrexp

Hey @Marcia | Glo Dollar, thanks for the update. As community member, and DAO member, i still ask myself questions…where are the people who benefit from that system? Who choose them? it s seems strange that with that less, you can achieve that…but i wish you success!
And my other concern is that creating a stablecoin cost many fees, and managing it, the legal entity, the people working on it, …so we need to be sure that at the end, every $ is backed, and can be redeem.
So can you achieve all of that? I mean you ll answer yes, but i guess people ask themself that question.

Reply, from Marcia (Operations @ Glo)

This article explains why we chose GiveDirectly as the organization to which we’ll donate our earnings. You can check out their website learn more about the beneficiaries living in extreme poverty.

With regards to ensuring proper backing and redeemability… Brale is our issuer and they operate under the same licensing framework that Circle does to issue USDC in the United States. Brale is a FinCEN registered Money Services Business and has obtained Money Transmitter Licenses (MTLs) or exemptions to conduct business in 35 states and counting. Their NMLS ID is #2376957 and you can verify them as a financial services provider in the NMLS database. The MTLs require Brale to have recurring audits from third party firms which are reviewed by state regulators. This includes the reserve backing of issued stablecoins. It also includes Brale’s own financial condition, compliance audit, penetration testing, SOC2 audit, and smart contract audit.

I’ll have my colleague add this response including the links I wanted to share to the proposal so everyone can benefit from seeing your question.

Appreciate your reviewing our submission and asking these questions. This dialogue should benefit everyone. Thanks again.

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In light of @DTravel’s question centering around trust, we have something exciting to share…

We’re now receiving independent attestations of Glo Dollar, asserting that the value of assets in reserve equals the number of Glo Dollar issued.

The first report (for October) can be downloaded here.

Beyond the monthly independent attestations, our issuance partner Brale also daily self-reports outstanding supply and reserves for additional transparency.

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@Bramvts In keeping with the guidelines of the forum, this discussion will be archived for the following reasons:

  • The discussion has not received a comment for over two weeks.
  • The post has not yet received significant support from delegates, large token holders, or core development teams.
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