[GIP-24] GoodDollar V4 - Celo Reserve and Protocol Enhancements

Governance Proposals
1

GIP: [GIP-24] GoodDollar V4 - Celo Reserve and Protocol Enhancements
Title: GoodDollar V4 - Celo Reserve and Protocol Enhancements
Author : Good Labs Foundation
Status:: Stage III
Track: Protocol
Created: 10/03/2025
Edit: 13/03/2025

TLDR:
GoodDollar V4 reactivates G$ minting by deploying a new Reserve on Celo, improving security, sustainability, and accessibility in partnership with Mento Labs.

Key:

  • New Celo Reserve – Replaces the paused Ethereum Reserve.
  • Reserve Model – Uses cUSD with 40K cUSD weekly and 80K cUSD monthly outflow limits.
  • Bridging Upgrades – Makes Celo the primary source of G$ and reverses bridge direction for seamless transfers across Ethereum, Celo, and Fuse.
  • Economic Adjustments – 10% exit fee (gradually reducing*), 1 G$ = $0.0001.
  • Snapshot vote required; on-chain execution by GoodDollar Guardians.

*If the reserve experiences a net outflow of less than 20% over a two-month period, the guardians will reduce the fee by 1% incrementally until it reaches a minimum of 5%.

Description of desired Protocol policy change

Background

GoodDollar protocol mission is to provide a sustainable, decentralized model to distribute Universal Basic Income in an open model. As mentioned in the white paper, “the GoodDollar protocol presents a community-driven, distributed framework designed to generate, fund and distribute global basic income via the GoodDollar token (G$).

Since its launch, the G$ token has been designed to function in a multi-chain paradigm. The core smart contracts that govern the monetary policy of the GoodDollar protocol operate on Ethereum mainnet, including the minting of G$ tokens to be distributed as UBI. G$ UBI distribution has occurred on Layer 2 solutions and side-chains, which are better suited for high volume, low-value transactions.

Why GoodDollar V4

  • Following the GoodDollar Reserve exploit suffered in the past December (details on this post) the GoodDollar Reserve was drained and a new opportunity to upgrade the protocol was presented.

    • The GoodDollar Reserve contract has been paused
    • No more new G$ have been minted. Minting of new G$ has been disabled due to the Reserve’s lack of funds.
    • G$ liquidity on side-chains has remained low.

  • Feedback from the community that they valued the Reserve model
    Community feedback has consistently highlighted the value of the Reserve model, as it provides stability and security for the GoodDollar ecosystem. The Reserve ensures the sustainability of the Universal Basic Income (UBI) distribution, offering users confidence in the consistent value of GoodDollar (G$) despite market fluctuations. This backing strengthens trust in the project, supports economic inclusion, and empowers the community to engage with the system confidently.

  • Feedback from the community that they wanted the Reserve to be easier to interact with. Interacting with the Reserve was challenging due to issues with the mainnet, including high transaction fees, slow transaction times, and a complex user interface. These factors created barriers for users, making it difficult to engage with the Reserve efficiently and accessibly. Additionally, the technical setup was not user-friendly, especially for those without advanced knowledge.

GoodDollar V4 in partnership with Mento Protocol

The new reserve contracts were developed in collaboration with Mento Labs. These contracts have undergone the necessary audit to ensure security and reliability.

Mento Labs is a leading team specializing in decentralized financial infrastructure, providing innovative solutions to enhance blockchain protocols. They focus on developing secure, scalable systems for DeFi, with a strong emphasis on creating sustainable financial ecosystems. Their expertise has been instrumental in the development of the new reserve contracts, helping ensure both security and reliability for the protocol. You can learn more about their work at mentolabs.xyz.

Further collaborations with the Mento Labs team are being explored and may be announced in the near future, depending on progress and developments.

Key Features of GoodDollar V4

The aim of this proposal is to approve the upgrades for GoodDollar Protocol V4, which involves deploying a new GoodDollar Reserve on the Celo Blockchain in collaboration with Mento Labs. Following this upgrade, all mint and burn of original G$ issuance will occur on the Celo Blockchain. As part of this upgrade, the GoodDollar protocol contracts on Ethereum will be disabled, effectively transitioning GoodDollar Protocol into a native protocol on Celo. However, it’s important to note that the G$ token will continue to be deployed on Ethereum, Celo and Fuse, with G$ UBI distribution still occurring on Celo.

The G$ distribution on Fuse will still take place, but the new Celo Reserve will not allocate G$ to it. Currently, Fuse has a mechanism where a portion of the rewards from Fuse staking is sold for G$ and then used for UBI distribution.

All proposed changes are designed to:

  • Enhance and activate the core GoodDollar protocol to reinstate the minting of G$ UBI in accordance with the original protocol model.
  • Enhance accessibility of the GoodDollar Reserve by migrating the from Ethereum to Celo, an L2 solution where G$ UBI is distributed.
  • Update the protocol model to enable a new, more sustainable, and potentially scalable yield source to fund the GoodDollar Reserve.

Proposed Protocol Changes

GoodDollar V3 GoodDollar V4
Core protocol contracts Ethereum Celo
Mint / Burn G$ Ethereum Celo
Yield Source 3rd party staking protocols on Mainnet such as Compound and Aave Options for yield will be evaluated and approved by the DAO in the future.
Reserve Currency cDAI cUSD
Bridging Infrastructure Locked tokens on Ethereum Locked tokens on Celo
Exit Fee 3% with exception to GDX holders 10% no exception (to be gradually decreased to 5%)
1G$ initial price Paused .0001$

Mint / Burn G$: Celo will become the blockchain for minting and burning G$ tokens via a GoodDollar Celo based Reserve (herein referred to as the “GoodDollar Celo Reserve”). The protocol will maintain its original structure of the issuance and burning of G$ based on the Bancor formula. The new Celo-native Reserve smart contracts will be based on contracts developed by the Mento Labs team.

Reserve Currency:

  • The new USD stablecoin in the GoodDollar Celo Reserve will be cUSD
  • The Celo Reserve will be funded with 200k cUSD
  • The G$ token will be launched with its initial launch price: 1 G$ = 0.0001$
  • Trading Limits: To protect the Reserve from depletion, a 40K cUSD net outflow per week and 80K cUSD net outflow per month limit will be enforced

Bridging Infrastructure: Updating GoodDollar Bridging Infrastructure

The GoodDollar bridging infrastructure needs to be upgraded to make Celo the primary source of G$ tokens and circulating supply. Since the Celo Blockchain will now be the source for all new G$ minting, the direction of the bridges needs to be reversed. The following changes are designed to easily and effectively move G$ across Ethereum, Celo, and Fuse.

Technical Description Of Proposed Contract Updates & Changes

The following is a description of the technical changes that will need to be ratified by the GoodDollar Guardians as part of this proposed change:

  • Give G$ minting rights to mento broker

    • MentoBroker is the contract that works with the reserve and allows to buy/sell G$s. When buying G$s new G$s are created that’s why it needs the minting permissions.

  • Give G$ minting rights to mento expansion controller

    • Mento Expansion Controller is the contract that replaces the reserve UBI minting process.

  • Create the mento G$/CUSD exchange

    • Contract: GoodDollarBancorExchange
      This is the core contract that replaces the reserve.
      Creating the exchange sets the initial virtual AMM parameters. G$ Supply, Reserve Supply (cusd),reserve ratio and exit contribution.

  • Set the expansion rate

    • Contract: MentoExpansionController
      Sets the expansion rate for creating UBI

  • Shut down Legacy Fuse<> Ethereum bridge operated by Fuse.

    • Required actions:
      1. Burn tokens locked on the Ethereum bridge
        1. Pause bridge contracts on both Ethereum and Fuse. Fuse contract: ForeignBridge, Ethereum Contract: HomeBridge

Note: Fuse has moved to a new Layer Zero based bridge architecture.

  • Upgrade native G$ Axelar/Layer Zero Bridge
    The bridge services from Axelar support Ethereum and Celo, while LayerZero supports Fuse, Celo, and Ethereum.

    • Required actions:

      1. Upgrade contracts to reverse lock/burn direction.

        1. Contract: MessagePassingBridge / Contract GoodDollarMintBurnWrapper
        2. Changes:
          1. Give minting/burn rights of G$ to the bridge on Ethereum instead of lock on Ethereum.
          2. Remove bridge minting rights on Celo
          3. Give minting/burn rights to the bridge on Fuse

      2. Burn locked tokens on Ethereum bridge side

        • Since the Ethereum bridge will transition to a burn/mint mechanism, G$ tokens currently locked in the current Ethereum bridge should be burned. Subsequently, G$ tokens should be minted on the Celo bridge to ensure sufficient exit liquidity for transfers from Ethereum and Fuse.

      3. Mint Current Ethereum and Fuse Supply (Minus Hacked Locked Funds) to the Celo Bridge:

        • Ensure the Celo bridge has sufficient exit liquidity. Mint the current supply from Ethereum and Fuse, excluding hacked locked funds, to the Celo bridge.
        • Since Celo is now the primary chain, all G$ tokens should be redeemable via the new GoodDollar Celo Reserve. The bridge should have sufficient exit liquidity on Celo, equal to the combined supply on Ethereum and Fuse, minus any locked funds (such as hacker funds and locked funds on the defunct Multichain Bridge).

  • Deploy CeloDistributionHelper
    To transfer G$ minted on the GoodDollar Celo Reserve to the UBI Pool on Celo or to the UBI pool on Fuse via the bridge.

  • Stopping and Upgrading Ethereum Mainnet Contracts

    • GoodDollar Reserve contract was paused by the Guardians after the exploit
    • Pause StakersDistribution contract, set GoodD rewards to 0.
      • This contract is responsible for calculating and distributing GOOD rewards for staking stablecoins in the staking contracts, which collect interest earned from AAVE/Compound staking. These contracts are now inactive due to the pausing of the GoodDollar Reserve and historically had very few participants.
        • GOOD will still be distributed to claimers and users who stake their G$ on Fuse Network.
    • Upgrade GoodFundManager contract
      • This contract is responsible for collecting interest earned from staking contracts and then initiating the UBI minting process by calling the GoodDollar Reserve.
      • This contract will no longer be used, as the GoodDollar Reserve and the minting process are being migrated to the Celo blockchain.
      • Even thought the contract will no longer be used, the contract is being upgraded to fix a vulnerability identified during the hack.

Proposed Ethereum Protocol Changes

Current Situation Proposal Contract Address
GoodDollar Reserve Paused Upgrade with fixes, Keep paused 0xa150a825d425B36329D8294eeF8bD0fE68f8F6E0
GoodMarketMaker Upgrade with fixes 0xDAC6A0c973Ba7cF3526dE456aFfA43AB421f659F
GoodFundManager Paused Upgrade with fixes, Keep paused 0x0c6c80d2061afa35e160f3799411d83bdeea0a5a
DistributionHelper Upgrade to deprecate old Fuse bridge 0xAcadA0C9795fdBb6921AE96c4D7Db2F8B8c52Fd0
GoodStaking Contracts (on Ethereum) Active Paused 0x7b7246c78e2f900d17646ff0cb2ec47d6ba10754, 0x3ff2d8eb2573819a9ef7167d2ba6fd6d31b17f4f
GOOD Staking Rewards Active Paused 0x5766cf4b2fdb09d986eb1783d276013c224e28c8
CompountVotingMachine Anyone with enough GOOD can submit proposal Upgrade so on-chain proposals require Guardians’ approval to not be malicious 0x57ee6ceff51cb30ecb1245934a882c500fbec1e9
ExchangeHelper Upgrade with fixes 0x98FA532Dd5C3a6b66fbf370813803192DE4e0abd
Accounts with hacked funds Not blacklisted Blacklist 0x76e76e10Ac308A1D54a00f9df27EdCE4801F288b
Fuse bridge (managed by Fuse) Active To Deprecate, Send locked G$ to DAO account 0xD5D11eE582c8931F336fbcd135e98CEE4DB8CCB0
MessagePassingBridge Lock/Unlock bridge Send locked G$ to DAO account, Upgrade to mint/burn bridge 0xa3247276DbCC76Dd7705273f766eB3E8a5ecF4a5
Burn locked bridges G$s G$s locked on bridges G$s burned by Avatar (DAO account) 0x1ecFD1afb601C406fF0e13c3485f2d75699b6817

Proposed Fuse Protocol Changes

Current situation Proposal Contract Address
CompountVotingMachine Anyone with enough GOOD can submit proposal Upgrade so on chain proposals require Guardians approval to not be mal 0x57ee6ceff51cb30ecb1245934a882c500fbec1e9
Fuse bridge (managed by fuse) Active To Deprecate 0xD39021DB018E2CAEadb4B2e6717D31550e7918D0

Proposed Celo Protocol Changes

Current Situation Proposal Contract Address
MessagePassingBridge Mint/Burn bridge Upgrade to Lock/Unlock bridge, Mint G$s to bridge with amount = Supply on Fuse + Ethereum 0xa3247276DbCC76Dd7705273f766eB3E8a5ecF4a5
CeloDistributionHelper Deploy & Initialize with: 90% to UBIPool, 10% to DAO treasury TBD
Mento GoodDollar Reserve Give minting rights TBD
Initialize Mento GoodDollar Reserve 10% exit fee, 10% expansion rate TBD

Audits

Code developed by Mento Labs: https://github.com/mento-protocol/mento-core/tree/develop/contracts/goodDollar

Next Steps

  • Protocol updates as part of this GIP will be voted on Snapshot and executed on-chain by the GoodDollar Guardians, per GIP 2 .

  • Protocol guardians can set trading limits in the Celo GoodDollar Reserve to protect it from depletion. These limits will follow recommendations from the Mento Labs team.

  • If the reserve experiences a net outflow of less than 20% over a two-month period, the guardians will reduce the fee by 1% incrementally until it reaches a minimum of 5%.

  • Governance will have to migrate to Celo, with a separate proposal required for review and approval through the governance process. A full review of the DAO’s governance structure is planned this year, with experts engaged to guide the process. Community participation will be included in later stages to ensure an inclusive and transparent design.

3 Likes
[GIP 23] Redeployment GoodDollar Ethereum Reserve
GoodDollar Governance Re-Vision: Stage 0
2

For me, it’s not good at all. What about us who have a lot of G$ and have been waiting for a whole year? It’s not fair. Please make it right. 10% fee it’s too big.

3 Likes
3

Thank you for a very solid proposal. Let’s get this going again!

4 Likes
4

Hi Letecia,
no offence, but this is a bit shortsighted. This proposal is very good for you. When this proposal goes through:

  1. the value of you G$ will probably be higher
  2. the value of your G$ will probably gradually grow like it did in 2022 and 2023.
  3. the 10% fee will gradually go down
  4. the 10% fee is needed to prevent too much a drain on the system, which would be bad for the value of your G$

So if you have a lot of G$ you should be really happy with this proposal. You need it to go through to keep the current value your G$. And in the long run it will probably appreciate the value of your G$.

Finally keep in mind that GoodDollar is not a crypto get-rich-quick scheme like so many others. It’s meant to provide Universal Basic Income to people who need it. So if you have a lot of G$ be glad you don’t need UBI to survive. And perhaps consider helping some people with UBI by donating it to a GoodCollective. That will make you feel Good!

6 Likes
5

I think this is well thought out and a clear case of learning to close past loop holes. I am happy with this proposal. LFG :rocket:

5 Likes
6

The December 2023 exploit disrupted GoodDollar’s core functionality. GIP-24 addresses these failures head-on, prioritizing security, stability, and accessibility. By approving this proposal, you directly safeguard your daily GD claims and reinforce GoodDollar’s role as a sustainable, decentralized UBI solution.

Vote FOR GIP-24: Secure the Future of Daily GoodDollar Claims

1. Restore Daily GoodDollar Distribution
The GoodDollar Reserve—the system that mints new tokens for daily claims—has been inactive since the December 2023 exploit. Without this upgrade, daily distributions cannot resume. Voting FOR GIP-24 reactivates the Reserve on Celo, ensuring you continue receiving your daily GoodDollar (GD).

2. Enhanced Security to Prevent Future Exploits
The December 2023 hack highlighted vulnerabilities in the original Reserve. GIP-24 replaces it with a new, audited Reserve built in partnership with Mento Labs, a leader in decentralized financial infrastructure. Three independent audits (linked in the proposal) validate its resilience, prioritizing long-term safety for user funds.

3. Stable Value Backed by Real Assets
The new Reserve is funded with cUSD, a stablecoin pegged to the US dollar. This ensures GD retains its value over time, making your daily claims more meaningful and reliable.

4. Ensure GoodDollar’s Survival as a Global UBI Project
This vote determines whether GoodDollar continues its mission of distributing universal basic income. Without approval, the protocol risks permanent stagnation. Voting FOR GIP-24 sustains the ecosystem, enabling it to grow and serve communities worldwide.

6 Likes
7

You summarize it really good. Well spoken, thank you!

5 Likes
8

Is there a clear criterion for reducing the exit fee, and who will make the final decision? Will it depend on the stability of the new reserve in Celo?

If Fuse no longer mints new G$, how will the staking of GOOD on Fuse be maintained? Will governance be migrated to Celo?

2 Likes
9

The idea is the guardian will reduce the fee every 2 months or so. We’ll add that to the proposal.
Yes governance will have to be migrated to Celo. There will probably be a duration where GOOD staking will be paused.
We are planning to re-evaluate the governance structure of the DAO this year. We are currently looking for experts in governance to help us do this process also including the community in later stages of the design.

9 Likes
10

Okay, perfect. Then, add the above to the proposal in detail. You have my support. Thank you.

6 Likes
11

Added the following to the proposal regarding the 10% exit contribution: If the reserve experiences a net outflow of less than 20% over a two-month period, the guardians will reduce the fee by 1% incrementally until it reaches a minimum of 5%.

5 Likes
12

Please also clarify the migration of governance in the proposal. Thank you.

3 Likes
13

Very good proposal. Hope it’s approved and run in shortly.

3 Likes
14

Yeah, the 10% exit fee sucks, but here’s the deal—without it, the whole system could collapse again . The fee stops the Reserve from getting drained, which means the “Claim” button stays alive for you, me, and folks worldwide.

It’s temporary (will drop over time) and only hits people cashing out GD. For the rest of us? Daily claims keep rolling, GD stays stable, and GoodDollar survives to fight another day.

Voting NO risks killing UBI entirely. Let’s fix this now so we don’t lose everything later.

2 Likes
15

Added the following to the proposal on next steps regarding this topic:

  • Governance will have to migrate to Celo, with a separate proposal required for review and approval through the governance process. A full review of the DAO’s governance structure is planned this year, with experts engaged to guide the process. Community participation will be included in later stages to ensure an inclusive and transparent design.
4 Likes
17

This proposal has been launched to voting: Snapshot

Start date Mar 20, 2025 · 6:02 PM (GMT+1)
End date Mar 27, 2025 · 6:02 PM (GMT+1)

4 Likes
18

Congratulations on passing this proposal unanimously!

3 Likes
19

That is a welcomeevelopment

1 Like