Glo is a non-profit stablecoin that generates basic income for people in extreme poverty. It's pegged to the US dollar and fully backed by a fiat reserve. We invest the reserve in US treasuries, and donate the interest to GiveDirectly, who distribute it as basic income.
There is virtually no limit to how many people Glo can help. It depends only on adoption. If we come together with enough people and businesses, we should be able to generate enough money to eradicate extreme poverty around the world.
But Glo changes lives at any rate of adoption—planetary scale is not required. To get a sense of what's achievable, here are some scenarios at various levels of success.
To estimate our impact, we'll make some assumptions which we discuss at the end of this article:
Based on these assumptions, we can make some rough estimates:
Here's what that means in practice:
This is a rough estimate, but:
We'll round that 7.64% up and say that...
While ambitious, this is not impossible:
If enough people come together, we can actually do this. Here's how you can help.
The uncertainty comes from:
The 3-month T-bill yield is the most uncertain factor. At the time of writing, it's 4.22%. Historically, it's been 3.37% on average. But that's, indeed, average—it has ranged anywhere between 0% and 15%.
Then there's the fact that we will never actually hold 100% of the Glo reserve in T-bills. Since holders of Glo should be able to redeem their Glo for US dollars whenever they want, a portion of the Glo reserve needs to be actual cash. The percentage of cash will depend. To get an idea, we can look at Circle (USDC), one of our for-profit competitors. They currently hold 20% of their reserve as cash.
A reserve consisting for 80% of 3-month T-bills would, going by the historical average of 3.37%, yield 2.7% per year in total.
Things will look very different when Glo reaches planetary scale. if Glo reaches trillions of dollars of market cap, we’re most likely operating in a world where we issue multiple stablecoins in different currencies. Each reserve would then be backed by government bonds denominated in each stablecoin’s currency. Still, for simplicity, we'll be conservative and assume a Glo reserve consisting almost completely of 3-month T-bills. Again, these yield 3.37% historically. We'll round this down to 3%.
Lastly, we estimate that providing basic income for one person living in extreme poverty costs $40/month. This matches GiveDirectly's estimate that it costs $40 to provide basic income in Liberia and Kenya. It's very likely that at much larger scales, when we need to reach people in many more countries, these numbers don't hold up.