💡Overview

📣 Elevator Pitch

A charitable endowment DAO that anyone can donate to, the principal ETH is invested forever, and anyone can vote on where to donate the returns.

🚗 Roadmap

Alpha

1. Form initial community of contributors

2. Set up multi-sig

3. Establish pilot funding partnership

4. Raise first 32 ETH

5. Vote on where to invest principal ETH (e.g. run validator node)

6. Vote on where to donate first returns

Beta

1. Consider adding ability to withdraw principal

2. Consider spinning out from Blank as a standalone project

🎯 Goals

North Stars

• Benefit humanity

• Democratic decision-making (1 vote per human)

• Some capital for operations and team incentives

• Design endowment to last forever

• Positive community

5-Year Goals (by end of 2026)

• 50k ETH locked (~$100M USD as of May 2021)

• 5k ETH allocated (~$10M USD as of May 2021)

• 1M+ voters (1 vote per human)

1-Year Goals (by May 2022)

• 500 ETH locked (~$1M USD as of May 2021)

• 50 ETH allocated (~$100k USD as of May 2021)

• 10k voters

✈️ Possible Outcomes

Failure (net negative)

The Ethdowment is hacked and/or manipulated and money and trust is lost. The project negatively impacts users and detracts from the movement around philanthropy DAOs.

Moderate Success (net positive)

Project fails to achieve goals, but:

1. Makes a net positive contribution to to the movement around philanthropy DAOs

2. Ethdowment assets are used productively to help the world.

Possible safe landings in this category of outcomes include:

• The community takes forward the Ethdowment as planned, but it remains small.

• Possibly explore returning and/or withdrawing some principal

Major Success (changes the world)

Ethdowment becomes the internet's default charity.

It's the largest and longest-lasting philanthropic endowment in the world and it demonstrates that democratic philanthropy results in more good than purely donor-driven philanthropy.

Ethdowment is cited as playing a role in the transition to new forms of global, digital cooperation that complement large legacy social institutions.

😔 Problems with Philanthropy

Not sustainable

• Relatively little money is donated globally (e.g. in US giving is <2% GDP).

• Giving is unreliable, sporadic, and often dries up in times of need.

• Nonprofits operate in "starvation mode" (short-term thinking) due to unreliable funding.

Principal-agent problem

• Donors allocate funds but rarely understand the problems they hope to solve.

• The global poor have little power when it comes to influencing philanthropy.

• Nonprofits that appeal to donors raise more money than those that focus on helping beneficiaries, so nonprofits spend a lot of time fundraising at the expense of doing work.

Decaying democratic institutions

• Governments and other legacy democratic institutions are decaying and inefficient.

• It's difficult to change large, legacy systems from within due to their size and incentives.

• There aren't enough real-world experiments to find better alternatives.

Lack of global solutions

• There are very few global, democratic organizations for addressing global problems.

• Most large global institutions are accountable to governments, not directly to the people.

• Legacy legal and financial frameworks make truly global organizations difficult to run.

Insufficient crypto philanthropy

• Crypto natives have the capacity to donate more as a community than they currently do.

• There's a lack of crypto-native charities that are aligned with the values of web3.

• Traditional philanthropy is resistant and slow to meaningfully embrace crypto.

💡 Hypotheses

• A crypto-native charity will successfully raise capital because there’s money in the space but not many charities that successfully utilize web3 to do more good.

• Crypto will be the top-performing asset class in the foreseeable future and locking donations in a crypto endowment will result in more sustainable philanthropic funding.

• Democratically deciding how to allocate Ethdowment returns (one vote per human) will result in more good than if donors were solely responsible for deciding where to give.

• Allowing contributors to withdraw capital will ultimately result in more returns than if they couldn't withdraw

🌱 Approach

• Start as small as possible and evolve iteratively

• Do less in order to prioritize quality and trust (audits, thoughtful governance, etc.)

• Have clear milestones that incrementally validate hypotheses at each stage

• Always maintain a soft landing plan to mitigate risk of losing or mismanaging capital

• Create a system that can create a better system (don’t try to design a perfect system)

• Implement progressive decentralization and work toward reducing reliance on team

🛑 Challenges

• One vote per human

  • It'll be difficult to figure out an effective and efficient way to enable one vote per human. The cost of a sybil attack is high, given that an attacker could potentially create multiple accounts and manipulate governance to steal funds. Most existing identity-as-a-service / KYC solutions rely on government IDs, which exclude some people, are expensive to verify, and introduce a central point of failure.

  • Our hope is that emerging decentralized identity solutions like Proof of Humanity and Bright ID can help solve this challenge in a trustless and efficient way.

• Raising enough money

  • It'll be hard to raise enough money for the Ethdowment to have meaningful impact. Our hope is that if voters are able to directly benefit from the Ethdowment's returns (e.g. a project they like is soliciting Ethdowment support, there's a universal basic income distributed to voters, etc.) then they will be incentivized to convince more people to donate, kickstarting a virtuous cycle: donations --> more voters and advocacy --> more donations. Other than that, we don't have a good solution to fundraising, beyond hoping donors believe in the idea and want to donate.

  • We don't want to spend too much time or money fundraising. If after putting in sufficient effort, people aren't interested in donating, we'll wind down the project.

• Funding overhead

  • It will be difficult to fund the Ethdowment's overhead. We expect a lot of early work can be done by volunteers. However, it's unrealistic to expect that an entirely volunteer team is the most effective way to manage a large endowment. Regardless of how much of the Ethdowment is managed by smart contracts and governance, things always change and there will need to be some humans need to manage changes. Unlike for-profit protocols, there won't be a token that contributors can hold to financially incentivize them to contribute, so at some point people should be paid.

  • We think eventually allocating some percent of the Ethdowment's returns to funding overhead is a smart move, however, we'll leave this up to community vote. If we reach the scale where this is necessary, it'll be a good problem to have :)

🏛️ Governance

We plan to implement a process of progressive decentralization in five stages:

1. Core team makes decisions (ad-hoc)

2. Core team + advisors make decisions via a multi-sig

3. Airdrop governance token and allow contributors to vote (governor alpha)

4. Add one vote per human (e.g. proof of humanity, possibly with a UBI incentive)

5. Remove multi-sig

Note: After the third stage, the Ethdowment should be "sustainable" in the sense that the entire core team could disappear and it'd continue to operate.