FAQ [GIP-11] GoodDollar V3 - Protocol Enhancements

The purpose of this post is to answer some common questions about [GIP-11] GoodDollar V· - Protocol Enhancements.

General & Tokenomics

  • When will the GoodDollar V3 update will be implemented?
    These are the next steps for V3:

    • Step 1: The community debates the proposal on Discourse.
    • Step 2: The community votes on Snapshot to decide to approve or refuse the proposal.
    • Step 3: If the community passes the proposal on Snapshot, this proposal will require an on-chain voting. Since the required UI for on-chain voting hasn’t been developed yet, the GoodDollar Guardians will execute the code honoring the Snapshot results.
    • Step 4: Deployment. The proposed changes will be developed, activated, and implemented over the period of November 2022 through Q1 2023, as per the larger GoodDollar V3 roadmap.
  • Why is important to slow down the rate of GoodDollar minting?

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.

  • Why is the number of G$ minted going to decrease? Why is that good for the GoodDollar Economy?

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.

  • Is the price of G$ going to be impacted by these changes?

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$.

  • How are the staking contracts going to be modified?

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.

  • What effect will removing staking have on the GoodDollar ecosystem?

First of all, staking is not going to be removed. Staking rewards in G$ will be removed.

On Ethereum network, people can continue to stake to receive GOOD tokens and donate their interest. The biggest donor to date, eToro, has been donating their interest since day one and will continue to stake $1 million in DAI.

As the data shows, staking stablecoins doesn’t generate the highest value for the G$ ecosystem. People with high degrees of G$ holdings are critical to the ecosystem success, as liquidity providers.

Rather than continue to allocate GoodDollar rewards as yield for stablecoin staking, G$ holders will be able to stake their G$ to receive G$ rewards to fortify the ecosystem and the community through Savings feature.

The protocol will be releasing a range of liquidity provider campaigns over the next 2 Q’s where people can support the ecosystem, earn rewards, and do good all at the same time.

  • How can I get more G$ to stake in the savings feature and get more G$ rewards?

First thing, don’t forget to claim everyday!

More details on the Savings feature and where and how members can access it will be released at a later date. The savings feature will be launched on sidechains, to encourage members to easily and affordably access that feature.

  • How much are G$ savings rewards estimated to be?

GoodDollar savers will be rewarded a fixed 5% APY from the rewards pool, on annual basis.

  • Can G$ rewards generated be directly donated?

That’s a lovely idea! Unfortunately, when the G$ rewards are launched in January donating your G$ rewards directly will not be possible (yet!)

As you know, the GoodDollar team is a small team and developing new features can take a long time. The team will love to see the community developing this contract to make this feature a reality. Drop it on the Dework.

  • What else is on the GoodDollar V3 development roadmap?

For 2023, GoodDollar will be focusing on building utility and the sustainable usage of G$ as a medium of exchange. The V3 protocol upgrades are a set of initiatives that move us in that direction. In addition to this proposal, the team and extended community are focusing on improving the GoodSwap interface and developing integrations between partners and the protocol.

Check out the Roadmap and stayed tuned for more updates!

What does it mean for me?

Claimers and G$

  • How much is the estimate claiming amount going to decrease?

Due to the reduction of the rate of the Reserve Ratio, fewer G$ are going to be minted on a daily basis relative to new deposits to the Reserve. The most immediate impact of this is that the daily distribution of G$ will decrease. Of course, the daily amount of G$ each individual receives will depend on the number of active claimers.

However, thanks to the Savings feature, G$ holders that stake their G$ will be rewarded a fixed 5% APY on annual basis.


  • When are the staking contracts going to be modified?

The staking contracts are going to be modified and activated after the ratification of the voting by the Protocol Community Guardians. Likely at the end of November, beginning of December.

  • I’m an Ethereum staker. What can I do with my G$? What should I do with all the G$ i have?

You are a hero of the system! Large G$ holders are critical to the ecosystem success. You are encouraged to deploy your G$ to support the ecosystem, via liquidity campaigns yet to be launched in partnership with Volt and Fuse, and the forthcoming savings feature.

For those who want to support the ecosystem and are able to do so, staking stablecoins on Ethereum to receive GOOD rewards and donate your yield to fund UBI, is an very meaningful way to support earn your governance seat.

  • Stakers on Ethereum would be donating their APY generated by Aave and Compound staking contracts. Is there a deadline for them to “un-stake” before losing their rewards?

You will not lose the rewards that have been generated with your stablecoin staking. However, you should unstake your stablecoins from the deprecated contract and move it to the new staking contract to continue receiving GOOD tokens.

When you withdraw your stablecoin stake from the deprecated contracts reward collection for both GOOD and G$ rewards minting is triggered. You can claim your rewards anytime through your portfolio on GoodSwap.


  • If there are fewer stakers, how is that going to affect the distribution of GOOD on Ethereum?

At the end of every month 25% of GOOD minted is distributed among Ethereum stakers. If there’s less stakers on Ethereum, the amount that they received will be bigger. However, GOOD token allocations to stakers are subject to further changes.

It’s important to clarify that the strategy here is to grow the number of stakeholders and corporate businesses, NGO’s, partners, etc. in the GoodDollar ecosystem and enabling them to contribute in the GoodDollar ecosystem but not financially benefit from it (since their yield will be donated).

What’s Next

  • When will G$ savings rewards be live?

The savings feature is expected to be released by January. Stay tuned for all the exciting news and improvements coming up!

  • How is the GoodDAO going to use the community/DAO fund?

This proposal aims to allocate a 10% of the daily G$ minted as UBI and allocate those funds to a community/DAO fund.

These funds will be automatically diverted into a smart contract and later on transferred to a multisig of trusted community guardians.

The intended purpose of the GoodDollar DAO funds is to encourage community-driven GoodDollar adoption and its usage as a medium of exchange. The scope of activities that the community could develop will be chosen by the GoodDAO (see GIP0 for further information) depending on the treasury and capabilities of the DAO itself. Some examples of intended usage of the G$ funds: GoodDAO Grants, GoodDAO jobs…

  • How to donate to the DAO Community Fund?

The smart contract that unlocks donations to the DAO Community Fund doesn’t exist yet. This will be developed after the approval of the V3 proposal. Keep an eye to the GoodDollar’s Roadmap.