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In today’s world, power can be seen historically shift from governments to people. In the emerging world of Web3, everyone will be taking part in collective decision-making through liquid democracy powered by smart contracts and crypto-assets.
However, some factors need to be acknowledged: intercontinental travel, mass communication, internet proliferation, widespread literacy, the emergence of gig economies, and the pro-democracy movement as we move towards decentralization.
Liquid taxation
The competitive tension that can be experienced between governments and constituents once a year, is the main issue with taxation. In the end, people are funding high-level individuals whom they do not even trustfully. Controlling societal contributions in real-time could be one such solution. Web3 provides an opportunity to make more sense, create a sort of community using economic power, and make the tax-paying activity a fun one rather than something that we dread. Here’s how Liquid taxation works:
It can be seen as getting a tax assessment at the start of the year on the basis of your income and net worth. The assessment is then added to your municipal crypto wallet. You can send whatever sum of money you feel worthy throughout the year as you witness the problems to solve and causes to support. You can even ask your friends to contribute with you from their tax pools. Just like a crowdfunding platform, you can create a funding pool for something important.
The tax assessment goes to your local government if you do not use it. On the other hand, you get a refund if you spend more than what you really owe. There is also the option to delegate the tax spending power to a family member or friend.
This gives you individual control, and instant gratification, allowing you to make a real-time impact.
Smart contract procurement
Contrary to the system we have today, Smart contract procurement is much more competitive and transfers power to the people. It is also a piece of equipment for resilience for public sector agents that often get less than they deserve from the public sector. Besides, smart contracts can be integrated into municipal utility tokens and micro-bands that for local issues raise discretionary funding.
In simple terms, smart contract procurement enables automation, helps scale, and provides economic efficiency.
Multi-currency monetary system
There are various problems with a physical currency that are not hidden from the world. Meanwhile, digital currency provides security, privacy, superior traceability, and administrative ease. One major issue is that central banks issue a single currency for a different set of jurisdictions. Similar to how the world can not have a single currency, the nation needs to have various sets of currencies that interoperate between federal, state, and city levels.
Social resilience, Civic Engagement, and economic efficiency are the foundation at which the social contract of liberal democracies around the world stands. Web3 provides us an opportunity to make public governance and funding fair and fun for the first time in history through liquid taxation, smart contract procurement, and multi-currency monetary systems.
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Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
