ACT – Social Accountability Blockchain For Global Impact Change?
ACT is a blockchain solution for social accountability. Read our ACT review today to find out how it works.
What is ACT?
ACT aims to introduce blockchain technology to the world of social accountability. ACT describes itself as “a next-generation organization that can aggregate funding from unlimited numbers from citizens targeting change and organize decision-making on an immutable blockchain.”
In layman’s terms, ACT plans to use a decentralized autonomous organization (DAO) structure to improve the world of non-governmental organizations (NGOs). Some are even calling ACT “NGO 2.0” because of its ability to revolutionize the way aid is distributed worldwide.
ACT will change the world of NGOs by introducing decentralized funding, decentralized voting, and decentralized curation. All of this decentralization means that the convention NGO as we know it is no longer necessary. Today’s NGOs are centralized organizations that make funding decisions. ACT flips that concept on its head using the Ethereum blockchain and smart contract technology.
Another advantage that ACT has over conventional NGOs is that trust is guaranteed through autonomous governance, which means no single person controls the fate of the many. As the organization’s Northern Ireland-based co-founder, Fraser Brown explains it,
“ACT is not a variant of the NGO model – it recreates it.”
We’ve always known that the modern NGO model isn’t as efficient as it could be. However, blockchain technology is making it possible to create a new and improved model. That’s what ACT seeks to accomplish.
What Problems Does ACT Seek to Solve?
Whether you were aware of it or not, today’s NGO model isn’t very good. There are a number of crucial problems with today’s method of distributing aid money worldwide.
Platforms like Kickstarter, GoFundMe, and Kiva have created crowdfunding models that can launch NGO projects. However, it’s far from a perfect system. There are transaction costs, currency risks, bank inadequacies, and other steps involved.
Instead of using that model, ACT pays curator-vetted proposals instantly and directly. Plus, security and transparency is guaranteed because ACT is based on the Ethereum blockchain.
Another problem is the way in which people contribute to NGOs. Let’s say someone wants to donate money to a cause. They can give $10 to someone on the street or to an online campaign. Or, they could get contacted directly for a contribution. Typically, people who donate through these methods share a common suspicion: many of their donations won’t actually reach their intended destination. They’ll be lost to administrative costs and other overhead.
On the other side of the equation, communities in need often struggle to get their message heard. A small, African community can’t launch a viral YouTube video to get their message across, for example. These communities might write letters or conduct other manual activities in an attempt to receive funding.
Ultimately, ACT plans to solve all of these problems.
How Does ACT Work?
ACT plans to solve all of the problems listed above. Users worldwide fund ACT by buying votes. Once quality proposals have passed through the curation engine, supporters are notified via their smartphone app and can begin voting.
With that in mind, there are two core parts to the ACT platform, including:
- ACT, where citizens purchase votes and apply them to proposals
- The ACT curation engine (ACE), where ACT tokens govern curator rewards
The proposal is funded out of the pooled funds using a smart contract after a certain number of “yes” votes are reached. 15% of pooled funds are distributed to the proposal curators by a smart contract, where an algorithm evaluates the curator’s effort. Through this method, the platform inherently promotes the quality of the proposal.
Smart contracts are used to decentralize trust and curation, ensuring ACT makes fair and consistent decisions. Smart contracts allow for trust between proposal makers and people funding the platform because everyone knows that there is no centralized person or organization in the middle.
Feeling lost? Here’s a summary of why ACT could be so important: the decentralized decision-making, blockchain technology, and smart contract system combine to make a platform where the NGO (as we know it) is totally unnecessary. There’s no need for overhead costs regarding administration.
Some of the crucial features of ACT include:
Vote Price Accessibility:
The cost of one vote is denominated in dollars, rather than ETH, in order to make it more accessible. The initial nominal cost will be 10 US cents. Voting will also be made accessible through a limit on the number of votes than an ACT user can apply to any given proposal (1000 vote / 100 dollar limit). Nevertheless, ACT admits that there’s still a risk that the wealthier parts of the world could dominate voting, especially since so many charity projects are targeted at poorer parts of the world. ACT plans to introduce a mechanism to mitigate this risk, like further limits on the number of votes. However, no further details are explained in the whitepaper about this mechanism.
Proposal Quality and Validity:
Another challenge with ACT is to ensure good proposal quality and validity. To do that, ACT has the ACT Curation Engine, or ACE, which is a decentralized platform for vetting proposals. Why would someone take the time to curate and vet proposals? It’s because they’ll receive financial rewards for their actions: 15% of all ETH received from ACT users who purchase votes is allocated to reward curators.
ACT’s ETH pools are stored in the Ethereum blockchain for better security. Smart contracts are used to trigger payments to curators and proposal makers in line with the ACT code, immutably.
The ACT ICO
ACT is launching its ICO later this year. During the ICO, the company will release ACT tokens, which is the unit of account in the curation engine (the ACE). 10 billion ACT will be issued through the ICO and allocated to smart contracts.
80% of the total supply will be available in donation campaigns, with the remaining amounts being distributed to contributors (8%), the ACT team (5%), Daoact Ltd (3%), ACT Bounties (2%), and WINGS (2%).
How Does the ACT Curation Engine Work?
The ACT curation engine, or ACE, works like this:
Step 1) Submit Proposal: Users submit a proposal in exchange for a small payment of ETH. The proposal is just as public as any post on Steemit, Medium, or Kickstarter. If a proposal receives a large number of “downticks” in early voting, it could be shelved.
Step 2) Curation: Curators dive deeper into the proposal. 15% of allocated funds are given to curators.
Step 3) Activation: The ACTIVATION algorithm pushes proposals to ACT users locally and globally once the underlying conditions and criteria are satisfied.
Step 4) Votes: After ACTIVATION occurs, ACT users are notified by the app on their mobile device. App users can open the proposal, then vote “Yes”, “No”, or “Abstain”. If a quorum of 60% votes is reached, then the proposal is funded.
ACT is a decentralized autonomous organization (DAO) that aims to disrupt the non-government organization (NGO) world by creating “NGO 2.0”. With ACT, there’s a reduced need for the traditional structure of NGOs. In fact, the NGO as we know it would no longer be required. ACT replaces NGO structures with decentralized voting and curation as well as a digital currency to reward contributors.
You can learn more about the ACT DAO today by visiting DAOACT.org.