UBI-via-DeFi with Rewards: Karma Finance’s New DeFi Protocol

UBI Plus
3 min readNov 28, 2020


Per the result of a vote last month on whether or not Karma Finance should integrate elements of Universal Basic Income (UBI) with our DeFi solution, we are happy to formally announce that it will be pursued.

In doing this, we want to provide a model for how UBI can be achieved with private funds.

Get Rewarded for Helping Others

We’re primarily interested in value creation, not just ‘giving’ for the sake of giving. We want as many people around the world as possible to be productive members of their respective societies to help improve the overall state of the world.

The new Karma Finance model incorporates some core functionality of Consensus Finance and will work towards this goal. It will allow you to obtain the KARBS token automatically by sending ETH to its smart contract. From there, you have two choices:

  1. Do nothing, and receive a small amount of ETH every period. (This is the UBI option.)
  2. Forgo #1 and seek out bigger rewards by getting your wallet address validated with KARBS. The more KARBS that are sent to your address during a period compared with other users, the greater the weight of your reward. Any KARBS sent to your address will be reverted back to the smart contract’s token supply and count as a vote towards your address. (This is the ‘consensus reward’ option.)

50% of funds received by the contract during a period (where users obtained tokens) will be used for payments and rewards during that period, with the remaining 50% to be distributed in future periods to holders. 100% of funds received by the KARBS contract will be used for this purpose.

Of this, ~2% would be reserved for UBI participants, while ~98% would be reserved for consensus rewards participants. The more users there are opting for UBI as a percentage of total users, the less each would receive.

For example:

The tricky part will be in determining what those percentages would be for the UBI and CR pools. It is possible, however, to make this a dynamic calculation in the contract logic.

Consensus Rewards Validation

Users that want to participate in the more bountiful consensus rewards will need to get validated with KARBS. Any KARBS sent to a wallet address will count as a vote for that address to receive a greater weight of rewards for that period.

The KarmaFi mobile app will allow users an easy way to create social media content and have others validate them. This could be someone sharing their opinions, making entertaining videos, talking about what they’ve done, showing their daily work, or anything they can imagine. Anyone can then vote for them for any reason. (And users will also be able to vote for themselves.)

Users will, of course, also be able to put their wallet addresses on their YouTube channels, blogs and websites, etc., for others to vote for them with KARBS, increasing the weight of their potential consensus rewards.

The Big Picture

Around the world, the state of technological development is out-pacing society’s ability to adapt. As the means of production become more digitized, we need to ensure that everyday people not only continue to make use of tools to create value but are incentivized to produce it in the first place. With the development of this new hybrid protocol we can respond to the future head-on in a way that is consistent with existing, successful economic models.

Official Links

Website | https://karma.finance
Telegram | https://t.me/karmafinance
Official announcements | https://t.me/karmafi
Twitter | https://twitter.com/Karma_Fi
Blog | https://karma-finance.medium.com

Securities disclaimer



UBI Plus

A blockchain-based mechanism that provides incentives to private individuals acting in their own best interests to fund a decentralized UBI scheme.