Okay, so the system ensures (assuming that it manages to achieve everything it says) that people get an appropriate number of coins and can spend them based on this web of thrust.

But what is the net flow there? Some people will want to buy food with these coins, but they have no goods or services to ever offer in return (that's the whole point of UBI). Let's call all their personal cryptocurrencies in aggregate PoorCoin. Some people will be using these coins to participate in a real economy, and not only be using to buy stuff but also sell their own goods and services for coins of others and perhaps buying back the coins they issued themselves.

Let's assume Alice would be willing to sell food for a coin where they can get goods or services or labor in return - i.e. Alice would not be willing to trade food for PoorCoin, but she knows Bob is a trustworthy, diligent, hard-working dude so she'd be happy to sell food for BobCoin. So far so good, the system allows to do that.

If Bob knows and trusts (in this system) any people who truly need UBI, then they'll be able to buy food.... at the expense of Bob. Alice will gain BobCoins - ones that Bob could have been using to buy stuff for himself. Instead of his own coins Bob will gain PoorCoins, which are comparably much less useful. If someone selling food would accept PoorCoins, then they would have done so, but since they don't, Bob is stuck holding coins of poor people he trusts and can't spend them on anything useful (remember, those people have nothing of economic value to offer by definition - if everyone can do so, we don't need UBI).

The same applies for coin flow of any communities - poor communities would need a net resource inflow in any UBI-like environment; so there would be a perpetual, permanent flow of different poorcoins out of that community. Would the other communities be ready to accept those coins? As some people would and some won't, it'd result in the "trusting" minority funding the whole system in an opt-in manner. We can expect the total volume of "trust" that the trusting minority is ready to spend in this way to be limited to, say, the current total amount of charity - and we do know that we can't run UBI out of charity, the amount is simply not sufficient.

An UBI system has net consumers, but it also needs to have net contributors, the ones who are funding the UBI without getting anything in return. It's clear why people who want to get UBI would join the system, but why would the merchants who sell food or the landlords who have cheap apartments join the system? Okay, they might get some value of the employable people they trust, but then the that those people, any person who's an "intermediary" between the producers and consumers will be the one who's funding the system, which is kind of weird since those are not the people who can afford to support everyone else - generally, those tend to be the working poor, who can only contribute a tiny amount of taxes; your local millionaire doesn't personally know or trust that much people who really need UBI to survive. To solve this, you'd need some entity which would be ready to offer (significant quantities) of goods and services for PoorCoins, taking them from the poor directly or from people like Bob, but if you do that, then that entity is the one doing UBI, not this blockhain, and it might as well hand out dollars instead - it still needs to provide (and fund) all this value; and it still needs to solve the identity and fake account problem itself, since it can't rely on the whole web of trust; it either has to take coins of people who noone else wants to touch (so it needs an independent mechanism of identity verification) or it can't provide universal income to all real people.