Swift Protocol White Paper (Draft)

The Swift Protocol is a DAO-based protocol that implements a Universal Basic Income (UBI)

https://www.swiftdemand.com/

Abstract

The Swift Protocol is an implementation of a Decentralized Autonomous Organization (DAO) that provides Universal Basic Income. The Swift currency is designed to be used as a transactional currency. It has been designed for low transaction latency, the ability to scale to thousands of transactions per second, low transaction fees, and dispute resolution for transactions. Income is distributed on a daily basis to all participants and represents a UBI. This paper is written to give a clear understanding of how the Swift Protocol works.

• Introduction
• Account Types
  • Swift Citizens
  • Swift Entities
  • Delegated Nodes
  • Identity Providers
• Income Distribution
  • Stage One
  • Stage Two
  • Referral System
• DAO based governance
  • Election of Delegated Nodes
  • Election Duration
  • Delegated Node Voting
• Transaction Capabilities
  • Transactions Per Second
  • Low Transaction Fees
  • Buyer / Seller Protections
  • Transaction Latency
• Compensation
  • Delegated Node Salary
  • Identity Provider Salary
• Reserved Funds
  • Funding Proposals
• Consensus Protocol
  • Selecting Forgers
  • Consensus
• Protections
  • Skip Attack 
  • Incubation Period
  • Sybil Attacks
  • Round Robin Order Attack
  • Deactivation of an Identity Provider
• Constitution
• Connection to SwiftDemand
  • SwiftDemand Features
• References

Introduction

Universal Basic Income is a critical societal movement that must exist for the world to continue to function as jobs continue to be replaced by automation^[1]. We live in a world with more abundant resources than ever before, yet there are still people who struggle to make ends meet. It is our duty as humans to ensure that every person has access to the core necessities of life. The Swift Protocol is a proposal that lays the framework for a DAO with the purpose of distributing Universal Basic Income. Worldwide adoption of the Swift Protocol will allow the dream of Universal Basic Income to become realized. The protocol has been designed with practical and proven solutions, with additional functionality to aid mass adoption.

Account Types

To create a transactional currency that provides basic income, some form of structure is required to ensure the following remain true:

1. A unique individual should only be allowed to have one account that receives basic income.
2. Accounts not tied to individual identities must be permitted to exist for business and privacy reasons.
3. The system must remain decentralized to avoid single points of failure.
4. Rules must be able to be modified over time to allow for the changing needs of an active economy.

To solve these issues the Swift Protocol proposes 4 different account types that together, fill these different responsibilities.

Swift Citizens

Swift Citizens are unique individuals that have been validated by an Identity Provider. Citizens have the ability to add claims to the blockchain once every day (days begin and end at midnight UTC). Swifts will be awarded based on the number of days passed--with a maximum of seven. For example, if the three days have passed and a user makes a claim with the current production rate at 100 Swifts, 300 Swifts will be awarded.

Swift Entities

Swift Entities are not connected to a personal real-world identity and therefore do not receive Basic Income. These accounts still must be approved by Identity Providers before being created. An Identity Provider must be linked to all Swift Entities, however Identity Providers are not allowed to make transactions on behalf of a Swift Account. Delegated Nodes and Identity Providers both inherit from the Swift Account type.

Delegated Nodes

Delegated Nodes are responsible for maintaining full nodes and creating new blocks. Each election cycle Swift Citizens will sign votes to help choose which Delegated Nodes they would like to represent them. This means that Delegated Nodes act as elected officials with the capability to vote on proposals to add/remove other Delegated Nodes and Identity Providers.

Identity Providers

Identity Providers are responsible for validating the identity of Swift Citizens and creating new citizens by generating a keypair for each new Swift Citizen and including the identity on the blockchain. Identity Providers have the added responsibility of protecting Swift Citizens whose keys they control with buyer and seller protections.

Identity Providers have the following capabilities:

• Add new Swift Citizens
• Freeze/Unfreeze Swift Citizens they have verified
• Make transactions on behalf of Swift Citizens they have verified
• Delete Swift Citizens they have verified
• Rescue orphaned Swift Citizens

Income Distribution

The goal of the Swift Protocol income distribution model is to provide a fair method of providing Swifts to all Swift Citizens. The distribution method also must ensure that the amount of Swifts entering the system should never cause a decrease in value. To more quickly reach the state where a mature economy has formed, early users will receive extra daily Swifts during Stage One.

Swifts are distributed to users on a daily basis with a maximum of seven unclaimed days of Swifts. A Swift Citizen must explicitly claim their Swifts at least once per week to convert their Unclaimed Swifts to normal Swifts. Days are marked by blocks that occur between 00:00 UTC to 23:59 UTC.

The total number of Swifts targeted to be added to the economy in Stage One is 70 Billion. After this stage has been reached, Stage Two will limit the amount of new Swifts that enter the economy to a healthy inflation rate.

Stage One

In Stage One, income will be generated at an accelerated rate so the economy can grow to maturity within a shorter time period. During this stage, Swift Citizens will receive Swifts dependent on the number of Swift Citizens that are in the ecosystem. The formula to calculate the Income Distribution Multiplier is as follows: (781250 / (5^(log10(users)))) with a maximum value of 100, and minimum value of 1.

Stage Two

After the 70 Billion cap has been reached by following the formula of Stage One, Stage Two will come into effect. During this stage, new Swifts will be given out to users at an inflation rate decided by the Delegated Nodes to all users in the ecosystem. It's their responsibility to choose an inflation rate that will avoid devaluing existing currency while ensuring the distribution is sufficiently large.

Referral System

When a new Swift Citizen joins, there's an option to include the public key of the Swift Citizen that referred them. Referral bonuses are calculated using 5 * Income Distribution Multiplier. For example, if there are 100,000 Swift Citizens at the time of a referral, the bonus would be 500 Swifts.

DAO Based Governance

Governance is an integral part of the Swift Protocol as it allows for outside data to be safely used for identity verification and economic control. However, the decentralized and autonomous elements of the Swift Protocol allow certain rules to be set in stone. These rules ensure a fair system exists where nobody has the ability to cheat in a way that is possible with centralized systems.

The Swift Protocol features an internal system that simulates a decentralized government. Swift Citizens have the responsibility to elect representatives known as Delegated Nodes that will have various powers within the government. These Delegated Nodes are required to both maintain the blockchain, forge new blocks, and vote on proposals.

Election of Delegated Nodes

Each Swift Citizen has the ability to cast one vote on the network during each election of Delegated Nodes. The Delegated Nodes that receive the most votes will be elected to serve during that election cycle. The number of Delegated Nodes is decided by the following formula: Max(10, (swift_citizens/100000))

Election Duration

Elections will occur every six months for the first five years. Citizens will have a two-week time period in which they may cast their vote for their preferred Delegated Node. After the voting period has ended, a one-month grace period will begin--giving time for newly-elected nodes to prepare for their responsibility, and to prevent any potential splits in the chain.

Delegated Node Voting

Delegated Nodes have the following abilities

• Elect new Identity Providers.
• Ban existing Identity Providers.
• Revert the chain state to some time within the past 72 hours.
• Ban Delegated Nodes.
• Elect replacement Delegated Nodes.
• Choose the inflation rate in Stage Two.
• Vote on the salary for Delegated Nodes.
• Vote on the Salary Multiplier for Identity Providers.
• Vote to approve or disapprove [funding proposa