Glo Dollar ($USDGLO) is a fiat-backed stablecoin created to lift people out of extreme poverty. Like other fiat-backed stablecoins, USDGLO is minted when (and only when) an equivalent amount of USD is deposited into the reserve. USDGLO reserves are held 100% as US dollar deposits, US treasuries and cash equivalents that earn interest. Glo Dollar’s differentiator is that its creator, Glo Foundation, donates all of its earnings from the reserve to GiveDirectly, an NGO that makes basic income payments in developing countries. More about why we chose GiveDirectly here: Why Glo Foundation chose to donate to GiveDirectly
Through the adoption of a stablecoin, we seek to create a sustainable funding mechanism that can substantially scale up GiveDirectly’s basic income program for people in extreme poverty. At a $15M market cap and assuming a 4.5% yield, we conservatively expect to receive about $21k per month in revenue from the reserves of Glo Dollar, or $252k annualized, to donate. This would lift 525 people out of extreme poverty. If we capture 15% of the stablecoin market, ~1M people will be lifted out of extreme poverty. The basic math is that it costs $40/month to provide basic income to one person of $34/month (Basic Income for Liberia | GiveDirectly ). GIveDirectly finds that transfers of this size enable people to invest in assets, like livestock or a metal roof or a small business, that enable them to lift themselves out of poverty. More here: https://www.glodollar.org/articles/how-glo-works
Go Dollar is issued by Brale.xyz. Here’s more on why we chose Brale and what they do for us: https://www.glodollar.org/articles/brale-and-the-glo-foundation
Why it’s classified as a public good:
Glo Dollar provides four kinds of public goods (in the ‘non-rival’ and ‘non-exclusionary’ sense of the concept).
First, stablecoins are essential infrastructure for DeFi, and right now, an absurd percentage of the total stablecoin market cap is dominated by USDC and USDT. This creates singular points of failure, especially because the leading stablecoin is so transparently shaky on legal and financial grounds. The more we can introduce stability through diversification to the stablecoin ecosystem, the more the community benefits.
Second, reducing extreme poverty is a public good because it unlocks human capital by allowing people who are currently languishing in poverty to pursue their dreams. The more people we can empower to join the global economy, the more likely we are to solve our biggest collective problems.
Third, Glo Dollar generates positive reputational spillovers for crypto as a whole. We have a clear, easy-to-explain financial model that turns holding or using a stablecoin into an anti-poverty initiative. In general, we think there’s space for crypto projects that clearly benefit people who are not, themselves, hooked into web3, and we aim to fill that niche.
Fourth, we’re building open source tools that others in the ecosystem are free to use and remix. Our smart contract is available at Glo Dollar / usdglo · GitLab and the Glo app source code is available at GitHub - Glo-Foundation/glo-wallet.
What we have built (Social Credibility/development progress:)
Glo Dollar’s smart contracts are currently live on Ethereum, Polygon and Celo: The official Glo dollar (USDGLO) smart contract addresses
We explored different paths and vetted many vendors before selecting Brale.xyz to issue Glo Dollar.
Glo Dollar became available on Uniswap in August.
Glo Dollar has since grown to a $1.4M market cap (as of 9/13/23)
- $880k USDGLO on Ethereum: $1.00 | Glo Dollar (USDGLO) Token Tracker | Etherscan
- $508k USDGLO on Polygon: $1.00 | Glo Dollar (USDGLO) Token Tracker | PolygonScan
- $61k USDGLO on Celo: Glo Dollar (USDGLO) Token Tracker | CeloScan
You can view current market cap on the issuer’s website here: https://brale.xyz/stablecoins/USDGLO
To Date Project Funding Sources
Our project was seeded with a generous donation from the Sijbrandji Foundation for the purpose of launching USDGLO. Now that USDGLO is live, we are seeking donors to fund our team in their partnerships, business development, and marketing initiatives.
Donations are essential to our model. Our estimate is that a stablecoin in the $200M+ range can operate on about 1% of assets under management (i.e. about $2M), but generate sustainable revenue 3-5x that every year (i.e. $6-$10 million). Because we donate all the revenue we receive from the Glo Dollar to charity, once we reach that point, a donation to Glo Foundation will be a no-brainer – it will be a giving multiplier for one of the most effective basic income cash transfer programs to lift people out of extreme poverty. In other words, a dollar spent helping the Glo Foundation keep the lights on will generate $3-$5 of donations for GiveDirectly.
We’re asking for donations now, at this pre-scale stage, to help us get there.
The Sijbrandij Foundation will match all new donations received.
What’s next if we receive funding:
The Glo Foundation is a going concern and any funds received will go directly towards our operating expenses. We have a small team of paid employees working cross functionally on partnerships, business development, marketing and fundraising initiatives.
On the partnerships front, we’re focused on finding ecosystem partners that will integrate USDGLO alongside current stablecoin offerings in their products and services. This means getting USDGLO supported by crypto on/off ramp platforms and eventually, centralized exchanges.
- Holyheld debit card example here: https://twitter.com/glodollar/status/1691817987794448653
On the business development front, we’re identifying and speaking to organizations that believe in our mission and are willing to hold some of their funds in USDGLO or accept payments in USDGLO.
- DAO example: https://twitter.com/glodollar/status/1696849246723428508
- Business example: https://twitter.com/afterdark_labs/status/1696920457251897558
On the marketing front, we’re raising awareness about USDGLO to a global audience to help drive adoption of USDGLO. The more we grow market cap, the more we’re able to donate to lift people out of extreme poverty.
Team Information, including backgrounds and roles:
Jeff Milewski, Co-founder & CEO, is an economist based in San Francisco. Prior to Glo, he was a research director and instructor of fintech at Creighton University. He also co-founded Funnel House, a consultancy that helps startups identify growth opportunities and necessary milestones to achieve success. Jeff holds an MSc from the London School of Economics.
Garm Lucassen, Co-founder & CTO, formerly worked as lead product manager of Secfi, a San Francisco-based fintech company. He co-founded CardanoSpace, the first NFT-powered dApp on the Cardano Blockchain, and TURF, a cartographic art NFT project that has had over 1300 pieces sold through payments processed by the VISA, Mastercard and Cardano networks. Garm holds a PhD in product management from the University of Utrecht.
Jasper Driessens, Co-founder & CMO, previously worked in marketing at Secfi, a San Fransisco-based fintech company, as well as founding ASIF Ventures, a pre-seed fund that has invested in 15 student startups, and CardanoSpace, the first NFT-powered dApp on the Cardano Blockchain. Jasper graduated cum laude from the University of Amsterdam with a master’s degree in Artificial Intelligence.
Marcia Blacken, Head of Operations, leads business development, partnerships and fundraising efforts as well as supports the incorporation of legal and compliance matters into marketing operations. Marcia has 10 years of experience working in the financial services industry, most recently overseeing client experience, custody and brokerage operations at Anchorage Digital, the first federally chartered digital asset bank. Her experience includes managing operations, investments, and client service and sales teams within highly regulated firms, including a broker-dealer, a registered investment advisor, and Bank of America.
We’re rounded out by 7 additional contributors that support marketing, community, finance, legal, and research initiatives.
Links and Resources:
- Website: https://www.glodollar.org/
- Why Glo Dollar: Take the Glo pill: 9 reasons to be excited about Glo Dollar
- Twitter: https://twitter.com/glodollar
- Discord: Glo, the antipoverty dollar
Some questions we received (or expect) from the Octant Community
- How does Glo Dollar compare to the other leading stablecoins?
Circle issues USDC under the cover of the same Money Transmitter Licenses (MTLs) as Brale.xyz issues USDGLO. Both issuers back their stablecoins with cash and short duration US Treasuries and cash equivalents (think money market funds holding short term treasuries).
Tether isn’t issuing in the United States and therefore isn’t subject to the same regulatory oversight companies that have been granted MTLs are subject to. It has broad discretion over what it can invest the reserves in.
- How is Glo Dollar different from Good Dollar?
GoodDollar is a great project and we’re happy to see them in the current Octant round. There are two main differences between our projects. First, GoodDollar is a free-floating currency (rather than a stablecoin) whose market value is based on demand for the token. Glo Dollar, by contrast, will always be worth $1 by construction. Second, GoodDollar distributes basic income payments in its own cryptocurrency, while Glo Dollar generates money for GiveDirectly, who in turn send people money in recipients’ native fiat currency. This is an important philosophical difference. Our mission is to end extreme poverty, which means helping people live on less than $2.15/day. The vast majority of people living in extreme poverty don’t have regular internet access, and transacting in crypto is going to be very challenging for them for the foreseeable future (though Good Dollar is paving the way for those in developing countries to learn how to use crypto using $G as an incentive). That’s why we work with GiveDirectly to actually make the payments — they use pre-existing mobile money technology to make transfers and have already built up a robust distribution network for the poorest people on earth. (For more on how this work in practice, see FAQ | GiveDirectly (“How exactly is the transfer made?“).
- Why did you go with a third-party issuer rather than issuing it yourself, and how did you select your issuance partner?
USDGLO is issued in the United States by Brale.xyz. The ability to issue stablecoins is dependent on the issuer obtaining Money Transmitter Licenses (MTL) from each state it issues/redeems and each state has prescribed “permissible investments,” which are generally highly liquid investments. In this case Brale.xyz holds and will continue to hold reserves as cash, short duration US Treasuries and cash equivalents (think money market funds holding short term treasuries). On average, the reserve is split into 20% cash and 80% investments in yield-earning instruments.
Brale is compensated for its role as issuer of the Glo Dollar through a revenue share on the earnings from the reserve. They earn 100% of the revenue from the reserve up to $2M. Beyond $2M, we start to take an increasing share of the earnings to donate. We currently have a $1.4M market cap so are not yet donating but our organization’s focus on partnerships, biz dev, and marketing is generating positive leads which gives us comfort in confidently projecting that we’ll reach $15M market cap by the end of Q1, where we would be realizing the earnings conservatively estimated in our project description that will flow to GiveDirectly.
- It seems like Brale, a for profit entity, will be compensated handsomely for your efforts. How do you justify this?
Assuming we have at least a $2M market cap, 80% of that is invested in treasuries and earns 4.5% annualized then they are making $6k a month. This is far less than other potential issuers quoted us and with those issuers, we would actually have to pay out of our operating budget in addition to offering some nominal revenue share with the reserves.
The cost of directly running of stablecoin issuing business far exceeds what we could do on our own as a donor funded organization so we leverage Brale to serve as issuer and maintain the regulatory and compliance functions and scrutiny while we focus on growing market cap so that we can make substantial contributions to ending extreme poverty.
The more we grow, the more regulatory scrutiny Brale will be subject to and therefore, they get compensated for the risk they’re taking.
- Are you a part of GiveDirectly?
No, we’re not under the GiveDirectly organizational umbrella but are affiliated with them by way of a Memorandum of Understanding where GiveDirectly has granted us license to state that GiveDirectly is the beneficiary of our reserve earnings provided that we actually distribute our earnings from the reserve once it starts coming in. At that point, we’ll formalize our relationship through a Commercial Co-Venture Agreement or Cause Marketing Relationship. USDGLO only became available to the public via Uniswap in August and so far has accumulated a $1.4M market cap.
- Do you have a commitment to open-source (i.e. every open-source license accepted by the Open-Source Initiative) technology and sharing results publicly?
- Have you provided transparency about how exactly funding will be used?
- Are you advancing values of freedom and privacy (no surveillance and handling of personal data)?
- Are you supporting decentralization in various fields (for example building Web3 projects)?
- Have you provided social media channels to the extent that we can confirm social proof of your project?