HUMFUND

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  Democratizing resilience with Blockchain

Humanitarian crisis such as natural disasters, affect millions of people every year causing a very large socio-economic impact and putting people into poverty and extreme vulnerability. Building up resilience to crisis requires large scale investment in different moments of the crisis management cycle: response, recovery, mitigation, preparedness and early warning. However, most part of the current systems are very centralized and are certainly opaque in how funds are managed. Moreover, the assessment of the impact of the projects is based on very rudimentary methods and small data (reduced number of surveys). We anticipate that Blockchain can imply a revolution in how humanitarian aid is funded, delivered and validated.

We create a humanitarian fund democratizing the funding to manage crisis and promote projects for recovery and resilience. Thus, we facilitate a large range of donors, identified through U-PORT platform, to contribute to the fund in a decentralized manner. Projects are funded through a voting process implemented as a DAO in Blockchain, unlocking funds for specific approved projects. Once projects are funded they get into a monitoring process so incremental funding is delivered or cancelled depending on the achievement of milestones. Monitoring is based on evidences collected by trusted parties (institutions, associations or verified individuals). Data is managed through SWARM so it is connected with Blockchain. Data science methods are used to produce Key Performance Indicators that will be used by investors, project implementing parties and validation institutions (such as UN) to decide if the milestones are indeed accomplished.

The solution is implemented through smart contracts (SC). A Master SC manages and updates the existing projects (already funded and to be funded) and creates new ones. The Master SC creates child SC (project SC) used to manage the funds and the project lifecycle. Funds are assigned to a project through a DAO. The project lifecycle includes the checking of milestones through evidences provided by the monitoring process. These milestones will determined if all the funding is unlocked for a specific project and if it is completely fulfilled. Milestones are checked through another voting process. The DAO implemented to decide the projects to be funded is managed by a SC (voting SC) that takes the votes of funders to decide on a project viability. Each funder will be identified using U-PORT to avoid potential issues with their reliability and trustfulness. The monitoring process is not fully implemented yet but it is designed. Trusted validators (associations or trusted individuals) also identified through U-PORT will produce evidences in terms of data (images, surveys, assessments) that will be translated into KPIs using data science methods and provided to the voters that check the milestones and generate timely reports of the project advances.

We have assessed the potential benefits and risks of the idea. Managing the incentives is key to ensure the right impact of the project. We concluded that it was more novel and relevant to focus on humanitarian crisis proposing a game changing approach avoiding intermediaries and decentralizing funding to specific projects undertaken by private and public sector stakeholders, exploiting the power of Blockchain. The potential revenue of the large scale investment in resilience is also an attractive and powerful market. Democratization is also key, so that the funding is distributed based on the potential impact of projects. We concluded that an equal voting was the best approach provided an initial investment in the fund from each voter. The other novelty relies on the monitoring of the funded project that currently almost does not exist and might be influenced by organizations’ interest. We believe that a Blockchain based approach can improve the transparency and the accountability and increase funders confidence into the project estimulating for larger investment. A major issue we challenged is how to ensure that the monitoring is performed in a reliable way. We concluded that trusted validators should be part of our solution.

We successfully conceived the project concept and workflow. Each module was clearly designed to have the right equilibrium of technology and socio-economic incentives. We designed a DAO to democratize which projects would be funded, taking also ideas from ICOs in a quasi-DAICO approach. Funds will be collected as DAI. Technically, we developed an initial prototype of the backend based on Smart Contracts for the project management based on Solidity as well as a front-end that communicates with the backend through Web3.

As next steps, we need to formalize the monitoring process and implement the workflow using SWARM. We need to establish alliances with certain institutions to help promoting the fund. We also need to create a network of validators mixed between authorities and trusted locals. Overall, we pursue produce a systemic change in how humanitarian aid is delivered, democratizing the process of building resilience and increasing transparency and accountability in the funding processes.

Built With

• dao
• etherum
• kpis
• smart-contracts
• solidity
• swarm
• uport