Visual representations of cryptocurrency Ethereum and Bitcoins are placed on Japanese 10,000 yen ... [+] notes in this photo illustration on January 13, 2018, in The Hague, Netherlands. (Photo by Yuriko Nakao/Getty Images)
Endaoment, the first provider of donor-advised funds on the Ethereum blockchain operating as a 501(c)(3) non-profit is publicly launching today. Run by CEO Robbie Heeger, Endaoment is also the first project incubated and launched out of Framework Labs, the sister technology studio to Vance Spencer and Michael Andersons investment firm Framework Ventures. Donor-advised funds (or DAFs) have been one of the fastest growing areas of charitable giving the past few years, with a 2019 report from the National Philantropic Trust showing a sharp 55% rise of individual DAFs year over year.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
With over 700,000 DAFs active today, the model is a great fit for crypto-natives interested in giving back. The crypto industry has suffered from bridging the gap between optimism and use cases, with only a few dominant financial use cases as yet proven. One important use case with proven demand that has often gone overlooked is charitable giving. So far, the friction hasnt been on the supply side, with plenty of newly-wealthy crypto holders, or the demand side (charities would love more donations) but on bridging the technology gap. As of now, donating via crypto required getting set-up with a major administrator of DAFs such as Fidelity, Vanguard, and Schwab, or going to each charity individually.
Drawbacks with the major administrators for cryptonatives include high fees, limited cryptocurrency donation rails, and friction in the ultimate conversion of crypto to USD for the end donation. Working with charities individually offers its own issues, as they would need to be set-up with a wallet and linked bank account allowing them to accept a certain amount of limited tokens. Once thats done, the ongoing burden of managing cryptocurrency, converting it, accounting, and cashing out to USD for use in daily operations is high for organizations with limited resources and technical know-how.
With Endaoment, that model is turned on its head. Says Heeger, "Endaoment is a new community foundation built specifically for the decentralized finance community. Effectively what we're doing is providing people the opportunity to have a dedicated account that is specifically geared toward their or their families charitable giving." Those interested in donating now simply need to go onto the Endaoment platform, create and fund a DAF. Then they provide guidance to Endaoment on where they want those funds to be directed, while Endaoment does the leg work of contacting the charity to let them know about their allocated funds and providing instructions to take delivery. The charity can receive the donations in USDC if they want to work with Endaoment on opening up direct crypto rails, but if not, Endaoment has partnered with Circle (the issuer of USDC) to use the Circle API to wire payment in USD directly to a charity.
"What we've built at Endaoment is basically two smart contract factories. One that creates a smart contract called a fund, or a donor-advised fund, and one that creates a smart contract that's called an organization. Each time somebody searches for an organization using endaoment.org, and they go to create a grant from that fund to that organization, we create an organization escrow contract on-chain. That basically serves as a smart wallet for that organization. It is a smart wallet that is effectively custodianed by Endaoment." The contracts have been audited by security research firm Open Zeppelin, with results available publicly.
Not only are they pioneering a new DeFi native model for giving, but Heeger has worked diligently to re-align the revenue generation mechanism for Endaoment from what he thinks is a broken traditional model. He sees the current DAF landscape as unduly profiting the major custodians, with funds deposited at major administrators of DAFs such as Fidelity, Schwab, and Vanguard recycled back into the system while they await disbursal. With average disbursal times of around 24 months from donation to disbursal, this incentivizes holding funds longer, while generating fees for the other side of the managers business on top of a fee for assets under management. Endaoment is attempting to fix this by charging fees only upon entry and exit from a DAF account that is weighted towards collection when funds are actually disbursed to charity, and no fee for assets under management.
Endaoment will take advantage of the progress made by automated market maker Uniswap in creating infrastructure to handle the long tail of cryptotokens being developed. Explains Heeger "We accept any Uniswap token with over $100k in liquidity, lifetime. We have unlocked a list of about 135 tokens and will continue to unlock more as Uniswap's liquidity deepens and more tokens come on-line to Uniswap."
While initially focused on providing the infrastructure for DAFs, Heeger sees a larger role for Endaoment as the Community Foundation for crypto, with crypto-native governance and operating protocols. The long term vision is to seamlessly integrate the technological advantages afforded by this new infrastructure to remake philanthropy at the community level in a way that accords with cypherpunk principals. Community Foundations are public charities that must be majority funded by the public, with a mission to support a specific region or community with targeted services.
At Endaoment, we aim to be the standard-bearing Community Foundation for the Decentralized Finance industry. Our first philanthropic service were offering is the Endaoment Donor-Advised Fund. Down the road, well look to emulate and develop other services like Community Endowment Funds, Issue & Org discovery tools and community powered governance controls. This will put Endaoment and its decisions, values and policies into the hands of its user base; its community. Says Heeger via email.
A long-time friend of Spencer and Andersons, Heeger is the bright, energetic, loquacious face of the future of charity. By taking a tech-first approach and thinking deeply about creating fundamental incentive structures to encourage best practices, he has a chance to build a powerful platform for giving in the digital age. As more and more financial activity moves onto DeFi, the wealth generated by these protocols and the early users can at times be enormousand happen fast. With Endaoment, a proven crypto use case of charitable giving finally has the organizational development its long needed to lower frictions for use. As time goes on, it will be fascinating to watch whether now that the model is being better developed if it can gain greater traction to become a force in the philanthropic world.
Disclaimer: Rory is an active trader and investor holding positions in several cryptocurrencies as well as equities and other private investments at any point.
Here is the original post:
- How does Ethereum work - Medium - February 3rd, 2018 [February 3rd, 2018]
- Ethereum - BTCMANAGER - February 19th, 2018 [February 19th, 2018]
- This Giant Infographic Compares Bitcoin, Ethereum, and ... - February 19th, 2018 [February 19th, 2018]
- What is Ethereum? | CryptoCompare.com - February 23rd, 2018 [February 23rd, 2018]
- The Top 10 Best Ethereum Wallets (2018 Edition) - February 23rd, 2018 [February 23rd, 2018]
- Ethereum fixes serious eclipse flaw that could be exploited ... - March 7th, 2018 [March 7th, 2018]
- How does Ethereum work, anyway? - Medium - April 25th, 2018 [April 25th, 2018]
- Free-Ethereum.com - Free Ether! - May 31st, 2018 [May 31st, 2018]
- What is Ethereum? | The Ultimate Beginners' Guide - June 20th, 2018 [June 20th, 2018]
- Ethereum Mining Guide for AMD and NVidia GPUs - Windows ... - June 20th, 2018 [June 20th, 2018]
- Ethereum: Blockchains, Digital Assets, Smart Contracts ... - July 16th, 2018 [July 16th, 2018]
- Ethereum Price - Mobile Friendly Price of Ether - July 16th, 2018 [July 16th, 2018]
- Ethereum Soars with over a 2,800% Rally - Coin News Asia - July 28th, 2018 [July 28th, 2018]
- Ethereum Co-Founder Joseph Lubin Says Speculators Driving ... - August 20th, 2018 [August 20th, 2018]
- Bitcoin and Ethereum: A Look At The Week Ahead - September 2nd, 2018 [September 2nd, 2018]
- EthereumPrice - Official Site - October 3rd, 2018 [October 3rd, 2018]
- Ethereum Classic Price Analysis: ETC/USD Could Revisit $12 - October 6th, 2018 [October 6th, 2018]
- Ethplorer Ethereum tokens explorer and data viewer. Top ... - October 6th, 2018 [October 6th, 2018]
- Buy and Sell Ether With The Peer-to-Peer Ethereum ... - October 6th, 2018 [October 6th, 2018]
- Ethereum Price - CoinDesk - October 18th, 2018 [October 18th, 2018]
- EthereumPrice.org - USD Price, Charts & History - October 18th, 2018 [October 18th, 2018]
- Report: Whales Accumulate Ethereum (ETH) En-Masse Amid Bear ... - December 7th, 2018 [December 7th, 2018]
- GitHub - ethereum/go-ethereum: Official Go implementation of ... - December 7th, 2018 [December 7th, 2018]
- Ethererum Crypto-Economics Index Real-time Price Charts and ... - December 7th, 2018 [December 7th, 2018]
- Ethereum Definition | Investopedia - December 7th, 2018 [December 7th, 2018]
- What is Ethereum Gas: Step-By-Step Guide - Blockgeeks - December 19th, 2018 [December 19th, 2018]
- Ethereum Price Analysis: ETH Could Extend Losses Below $80 ... - December 19th, 2018 [December 19th, 2018]
- Ethereum Price Analysis: ETH Could Turn Bullish Above $90 ... - December 19th, 2018 [December 19th, 2018]
- Bitcoin, Ethereum, Ripple Prices Surge Higher; FOMO Santa Rally? - December 26th, 2018 [December 26th, 2018]
- Ethereum Co-Founder Calls the Cryptobottom of 2018 ... - December 26th, 2018 [December 26th, 2018]
- Part 1: Ethereum vs NEO Which blockchain will provide ... - December 31st, 2018 [December 31st, 2018]
- Ethereum Price Analysis: ETH Corrects Sharply, Can It Hold ... - December 31st, 2018 [December 31st, 2018]
- Ethereum: JPMorgan, Microsoft, Banks Form ... - fortune.com - January 3rd, 2019 [January 3rd, 2019]
- Ethereum News | Ethereum News today | Latest Ethereum News - January 3rd, 2019 [January 3rd, 2019]
- Ethereum (ETH) - Price, Chart, Info | CryptoSlate - January 3rd, 2019 [January 3rd, 2019]
- Ethereum Cash Pro - January 3rd, 2019 [January 3rd, 2019]
- What Is Ethereum? Here's What You Need To Know - January 3rd, 2019 [January 3rd, 2019]
- What is Ethereum? | The Ultimate Beginners Guide - January 27th, 2019 [January 27th, 2019]
- Ethereum Classic - A smarter blockchain that takes digital ... - January 27th, 2019 [January 27th, 2019]
- Ethereum Price Analysis: ETH Relatively Muted, Next Move ... - January 27th, 2019 [January 27th, 2019]
- Buy and Sell Ether With The Peer-to-Peer Ethereum Marketplace ... - January 27th, 2019 [January 27th, 2019]
- What is Ethereum? | The Ultimate Beginners' Guide - CoinCentral - January 30th, 2019 [January 30th, 2019]
- Ethereum Price Analysis: ETH Breaks Down, Turned Sell on ... - January 30th, 2019 [January 30th, 2019]
- Ethereum Price Analysis: ETH Remains Sell Near $128 ... - March 6th, 2019 [March 6th, 2019]
- Ethereum Price Analysis: ETH Remains Sell Near $128, Target ... - March 11th, 2019 [March 11th, 2019]
- Create a cryptocurrency contract in Ethereum - March 11th, 2019 [March 11th, 2019]
- Ethereum Price Analysis: ETH Buyers Wont Give Up Easily ... - March 11th, 2019 [March 11th, 2019]
- Buy and Sell ETH With The Peer-to-Peer Ethereum Marketplace ... - March 18th, 2019 [March 18th, 2019]
- Ethereum Technical Analysis - FXStreet - March 18th, 2019 [March 18th, 2019]
- Ethereum - Investopedia - March 18th, 2019 [March 18th, 2019]
- Ethereum - reddit - March 18th, 2019 [March 18th, 2019]
- Ethereum vs Bitcoin: The Battle for the Crypto Throne - Coindoo - March 18th, 2019 [March 18th, 2019]
- Ethereum Price Analysis: ETH Could Make a Sustained Move ... - March 18th, 2019 [March 18th, 2019]
- Ethereum Project - March 18th, 2019 [March 18th, 2019]
- Ethereum - Official Site - April 20th, 2019 [April 20th, 2019]
- Ethereum (ETH) Price Starts Much Awaited Rebound To $170 - May 9th, 2019 [May 9th, 2019]
- Ethereum Price Analysis: ETH Corrects But More Upsides Likely ... - May 9th, 2019 [May 9th, 2019]
- Ethereum Price Analysis: ETH Primed For Additional Losses ... - May 9th, 2019 [May 9th, 2019]
- Ethereum Won't Fail: Joseph Lubin - ccn.com - May 9th, 2019 [May 9th, 2019]
- Ethereum (ETH) Price Starts Fresh Increase: Bitcoin Leading ... - May 9th, 2019 [May 9th, 2019]
- Bitcoin Booming As Ethereum, Ripple's XRP, EOS And Litecoin ... - May 9th, 2019 [May 9th, 2019]
- Ethereum Bounty Program - May 30th, 2019 [May 30th, 2019]
- Dark Horses of dApps: 6 Blockchains With Ethereum In Their Sights - Crypto Briefing - October 21st, 2019 [October 21st, 2019]
- Latin Americans get two new ways to trade Bitcoin, Ethereum, and more - Decrypt - October 21st, 2019 [October 21st, 2019]
- Ethereums Bearish Wave Count Outlined by Cryptocurrency Analyst - BeInCrypto - October 21st, 2019 [October 21st, 2019]
- XRPs Third Quarter Inflation Rate Was Lower Than Ethereum (ETH) and Litecoin (LTC) - SludgeFeed - October 21st, 2019 [October 21st, 2019]
- Ethereum (ETH) Dives To $170, Is $160 Next Bear Target? - newsBTC - October 21st, 2019 [October 21st, 2019]
- Thomson Reuters: Bringing Smart Contracts to the Mainstream With Ethereum & Chainlink - Blockonomi - October 21st, 2019 [October 21st, 2019]
- Crypto Analyst: Ethereum Has Bottomed, Expected To See Extended Rally - newsBTC - October 21st, 2019 [October 21st, 2019]
- WATCH: MyCrypto CEO Taylor Monahan on Crypto Adoption and Ethereum - Coindesk - October 21st, 2019 [October 21st, 2019]
- Cryptocurrency market update: Kicks of a dying horse as Bitcoin, Ethereum and Ripple remain suppressed - FXStreet - October 24th, 2019 [October 24th, 2019]
- Cryptocurrencies price prediction: Bitcoin, Ethereum & Litecoin - American Wrap - 22 October - FXStreet - October 24th, 2019 [October 24th, 2019]
- Ethereums gas prices show an unusual surge when the Asian market sleeps - AMBCrypto - October 24th, 2019 [October 24th, 2019]
- Whale Consolidates $88M Worth of Ethereum in Two Transactions - BeInCrypto - October 24th, 2019 [October 24th, 2019]
- Ethereum Falls 10% In Selloff - Yahoo Finance - October 24th, 2019 [October 24th, 2019]
- TRON Joins Bitcoin And Ethereum On Opera Browser - Crypto Briefing - October 24th, 2019 [October 24th, 2019]
- Ethereum (ETH) Rebound Faces Major Hurdle Near $180 - newsBTC - October 24th, 2019 [October 24th, 2019]
- Ethereum Breakout Above $360 Means Skys the Limit, Believes Cryptocurrency Analyst - BeInCrypto - October 24th, 2019 [October 24th, 2019]
- Ethereum Futures: The Next Big Derivative to Hit the Market? - Cointelegraph - October 24th, 2019 [October 24th, 2019]
- Ethereum and Stellars Lumen Daily Tech Analysis 23/10/19 - Yahoo Finance - October 24th, 2019 [October 24th, 2019]