Charity YFI Vault

Hi Everyone,

First and foremost, I would like to say that I am incredibly grateful to all the community members who have been instrumental in helping myself and others conceptualize this incredible ecosystem.

Now on to my thoughts, and hopefully your feedback :slight_smile: :smiley:

Many of us enjoy donating to charities of our choice. A theme that has played out for centuries, and one that gives many of us that fulfilling feeling of giving back to causes that we truly care for. I mean, at the end of the day - what’s all this for? Our forms of contribution can be our time, or more often - a % of the income we generate on an annual basis.

What if we came up with a charity vault, that was sustainable? As the old adage goes: “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime”.

The premise of the idea is quite simple.

Users would have the ability to allocate a certain % of the interest they earn in YFI’s vaults to the Charity Vault of their choice (we could start with charities most people fundamentally believe in / aren’t partisan - world famine, clean water, doctors without borders.

Those proceeds would then flow to the vault, where that currency (could be DAI, ETH, WBTC, USDC) flows back into the corresponding vault. Effectively, 0 sum game (not sure of the technicals to make that frictionless to avoid gas costs). Users would also have the optionality of sending straight fiat, as they would with any donation. We can call these proceeds “the principal”.

The principal would generate interest, of which a majority would be sent to a verified wallet of the charity of choice. We could always tinker around with limiting the initial interest being sent out to exponentially garner more compounding interest, but that is the essence of the idea.

…a sustainable and ever growing stream of cash flow that starts paying out Day 1.

Users would ideally be able to write off those contributions, and regardless it would truly be a beautiful way of bringing DeFi and it’s use cases to the “real world” in a very positive way.

YFI wins. Charity wins. User wins.

Curious to hear your thoughts, and if anyone on the technical side would like to work with me in drafting a proposal for consideration.

Thank you,
Persian Cat

5 Likes

I had a very similar idea the other day and came to Yearn to see if it was possible. My idea was to fork PoolTogether (GiveTogether?) and allow pool creators to set the recipient of the pool yield to any address. This would allow for lossless, automatic charitable giving from peoples savings. It encourages saving, and puts idle money to work. Having it built directly into Yearn is not a bad idea. But I just wanted to say that you aren’t the only one thinking about this. I think it’s a good idea.

3 Likes

I like this idea a lot.

I’ve been thinking about something along these lines for a while as well.

My ideal scenario would be a mini-enDAOment.

Problem

  1. People have made a lot of money in Crypto, and want to give back. Because dying rich is stupid.
  2. Donating crypto to Non-Profits is hard.
    (They don’t have wallets typically, and if you give more than $5k your donations have to be appraised because Crypto is treated like a property in the US)

Solution
Mini-enDAOments

A portal for Non-Profits to set up a wallet that can accept donations, and determine which currencies they want to accept donations in (ETH, BTC, DIA, etc)

Once a NP had set their account up, donors could donate to the NPs. But instead of a one time donation they could choose a % of the donation that would be deposited into a vault that would fund the NP for some set period of time (3-5 years, Because no organization needs funded forever without some accountability) When a donor made a donation they would receive an automated appraisal of their donation that would just be the amount that was donated, and the USD value at that time for taxes.

EG

  1. Donor gives $100K, and sets 50% of that to be deposited into a vault for them.
  2. $50K is in a time locked vault for 3 years in the highest yielding stable coin vault, and the other $50k is given directly to the NP for them to do what they wish with it.
  3. Donor Receives appraisal saying they donated $100K
  4. NP receives enDAOment dividend for 3 years, and the total amount releases to the NP at the end of the term.

I think this would be better than Yearn trying to get involved in choosing the NP’s it’d be up to the NP’s to register if they were interested and then the users could choose the NP they wanted to give to from a drop down list.

I think you’d have to vet the NP’s on the front end though, not 100% sure how to handle that in an automated way.

4 Likes

I was thinking about that too See my post below.

You could take a % of the enDAOment yield and fund a PoolTogether style lotto that would randomly distribute funds to a registered NP.

That could be enough to get NP’s to sign up.

Nice, yeah you’ve definitely thought more about it than I have. It’s a well-thought-out idea. I should say though, in my initial idea, I was planning to strip out the lottery aspect of PoolTogether (which is basically the whole point, I know), and just set it up so the yield from a pool can be redeemed by a preset address, set when the pool is created. I was imagining that anyone could create a pool, and set any address as the yield recipient – it could be the address for a charity, or for your kids.

The reason for the idea to do it preset on a user’s own vaults was the notion that I would imagine most charities would like to receive (at least at this point) - the currency of their own nation / wbtc. If you are user X who holds YFI at an incredibly low basis, you may be more inclined to set aside more of that specific currency’s vault.

Having said all of that, I really like the idea of looking at it from the perspective of making the donation with a preset amount going to a yielding account. It’s a cleaner way of looking at things and I don’t think my reasoning above is really such a drastic factor for someone who would already be donating / looking to donate.

With respect to the appraisal, shouldn’t be too difficult. Generating a value in USD at the exact moment the donation is given.

Regarding the front end on the charity work, I do agree that I don’t believe that could be fully automated. I guess the first and easiest step would be to show that they are reigistered as a 501 (c)(3) - which we can run by the IRS database (https://apps.irs.gov/app/eos/). There are also databases such as https://www.charitynavigator.org/ which help filter out.

I think @joshualedbetter really hit on a point to with the child part, although maybe that gets a bit more complicated. I believe you are allowed to gift a certain amount of $s to your children, and also structure them in let’s say a 529 savings plan that can be used for higher education / college down the line. The smart contract would inhibit them from using the principal, and you could structure that instrument however you want (i.e. $10k to be put into the vault with x% being released at 18, 19, 20, and the remaining balance at 21).

I guess the next question is - how would the interface work with YFI? Just a completely separate side having to do with charities that integrates into the vaults?

To the how does this work with YFI… I don’t think this idea fits very well into the Yearn Ecosystem at the moment.

I think this could be a good fit with Arkropolis (Who? gif) They’re supposed to be a more corporate focused team, that fits somehow into the Yearn Ecosystem?

I’m not super familiar with what they’re doing so maybe I’m wrong and it would be a terrible fit.

1 Like

I would love a vault like this. I think a couple of charities which would be good could be carbon offset charities, and life extension charities. Both of which I think people in crypto-currency can relate with highly, it might actually be best to put this to some sort of community poll.

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Happy to hear the ringing endorsement !

I do truly think believe we could integrate this into YFI, but @Reeserj - I’ll look into Arkroplis.
Let’s try and simplify it a bit more - just a few core vaults at first and we can expand from there.
Send whichever currency you want, and it is put into the vault. We can mess around with the economics of whether to send a majority of the interest or as @Reeserj put it (albeit a bit different) - a preset % of the principal gets sent and the rest goes into the vault to generate interest. The real beauty is just making it sustainable.

@0023jas - do you know where we can place this poll?

Also, would anyone here want to work together to draft a proposal? I don’t have the tech expertise, but have the expertise on the front facing roles (reaching out to the charities, vetting, etc.). Not exactly sure as to the required logistics / next steps.

Let’s try and do this !

Great idea and goal.
How do we get around the gas fees?

Not really sure, still brainstorming that one.

FYI, there is already a YFI vault that will contribute to a Universal Basic Income initiative distributed through Proof of Humanity and that is going to be launched in the next few weeks:

3 Likes

I would love to see a pool created and dedicated to a suitable highly vetted nonprofit that fits yearn member’s goals. Also it would be perfect if they only spent their yields and maintained a growing pool from us so they have a growing trust that shows what crypto and specifically yearn is capable of providing.

I think this is a very interesting idea, but some of the problems I currently see is:

  1. How and by who should the charities be chosen?
  2. Will it be possible to remove certain charities if they misbehave in the future?
  3. If it’s just paid out to 1 address chosen by all the donators/yfi token holders, what stops someone from obtaining more then 51% of the donations and point the donations to his own address?

But I really like the idea and would really support it if we can find a solution to these problems!
It can really be a groundbreaking way to fund money for charities in the future!

Layer 2!

Hopefully we’ll have some reliable on/off ramps with native layer 2 support. I’d hate to send a charity funds and then for them to use it it costs them a lot in gas.

  1. This is my problem with the initial proposal as well. It’d be difficult to gain consensus regarding the chosen non-profit (Maybe it could be a weighted vote based on YFI held?) All eligible non-profits receive funds based on YFI Votes?
  2. That’s why I think we’d want to have these NP’s only be eligible for a period of time instead of in perpetuity
  3. I think that feeds back to 1, but that’s also the reason that I prefer to have charities have the option to set up a donation vault where users can donate to them and use Yearn to fund their own enDAOments. Then there’s no need to dicker over who gets the funds, you just give to the NP’s you want to give to.
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I love this post. It makers my heart happy and motivates me to get to a place where I can contribute to others goals and dreams. People have been there to help us while we were struggling when I was a new mom and my husband and I hope to someday be able to pay it forward. I wish I had bought YFI last July…would be much easier today!

Thank you all for showing your generous hearts. I can’t wait to join you in giving back. I can’t do it with crypto this week, but I’m happy to pay it forward with time and effort.

Thank you for inspiring me. Today was a tough day mentally. I’ve been borrowing from Peter to pay Paul so we could put every cent into crypto while things are lower. It’s official I am all in…in next pay period…I will be again…and again. It will be way more fun when we get to enjoy it!

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