UBI Fixed
UBI has always failed because of identity and privacy. FHE finally makes both compatible.
TLDR: Problem: Automation causes inequalities => Solution: UBI => Problem: Sybil Attack => Solution: FHE
UBI theory
Universal Basic Income (UBI) is a simple idea: every individual receives a fixed amount of money at regular intervals, unconditionally and regardless of employment or status. The goal is to provide a financial floor that guarantees basic economic security while reducing administrative complexity compared to traditional welfare systems.
Historically rooted in proposals from thinkers like Thomas Paine and later formalized through mechanisms such as Milton Friedman’s negative income tax, UBI has resurfaced in modern debates as a response to automation, inequality, and the fragility of existing social safety nets. At its core, it reframes income not as something earned conditionally, but as a baseline right tied to individual existence.
Politically, UBI is unusual because it attracts support from opposite ends of the spectrum for entirely different reasons. On the left, it is framed as a tool to reduce poverty, redistribute wealth, and simplify fragmented welfare systems; on the right or libertarian side, it is seen as a way to replace bureaucratic social programs, reduce state overhead, and give individuals direct control over capital allocation.
What is the problem
Apart from its political complexity and the difficulty to come to a consensus on the amount and conditions to distribute such an income, the biggest unsolved problem with UBI is Identity.
One key feature of UBI is that it should be distributed to each human, and only once to each human. The challenge is therefore to make sure one human doesn’t claim income thousands of times by creating thousands of fake identities (Sybil attack- https://en.wikipedia.org/wiki/Sybil_attack).
A solution that most states have for this is distributing IDs and holding a record of every citizen. The issue if we wanted to implement that with software and blockchain would be privacy (blockchains are public) and centralization (a server holding and managing all personal information).
Enter Zama / FHE
This is where FHE changes the game.
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With Zama, personal data can be stored encrypted on the public blockchain AND KYC conditions can be applied to these with the inputs and outputs staying encrypted.
This solves the privacy problem because PI is encrypted, and the centralization problem because decryption of this data is decentralized using threshold MPC protocol (https://docs.zama.org/protocol/zama-protocol-litepaper).
Finally, we can solve the Sybil attack problem by running a check on duplicate identities and give out income claims only once per identity.
CipherMint as a concrete implementation
So I decided to build a demo for UBI using Zama for FHE on chain and Didit for their free tier KYC: CipherMint — https://ciphermint.stevensba.com/.
CipherMint is a KYC-gated UBI experiment for unique names, built on Zama’s FHEVM. Each verified human with a unique full name can claim an initial allocation of test tokens and then receive ongoing monthly income.
KYC is ran using Didit third party and then our backend posts full name on our deployed Zama compatible smart contract. We don’t keep any record of names in our backend. The smart contract checks for name duplicates without exposing them.
This UBI token will be the base currency for all SBA (https://www.stevensba.com/) DeFi and RWA demos in the future.
What could be improved
I would say the main weakness of this demo design is the necessity for a centralized back end to relay KYC to the blockchain. This could be decentralized and checked with a reputation system.
There are also two ways in which this is strictly speaking not a perfect UBI:
- Not universal (KYC-gated, requires ID)
- Not censorship-resistant (DDOS on backend, could be decentralized)
Feel free to try the flow and claim your UBI demo tokens at https://ciphermint.stevensba.com/ :)
Github here: https://github.com/joelamouche/ciphermint-by-sba
