Attracting Capital For Impact: Angel Impact Fund

The Angel Impact Funds were born from the observation that with simple refactoring we could turn our charitable endowment financial primitive into very powerful DeFi instruments that are versatile enough to cover an almost infinite number of use cases.

Angel Impact Funds are Programmable DeFi Funds with DAO Tooling that always generate impact.

Programmable #

Angel Impact Funds are smart contracts with a defined set of parameters that are set by their creator/owner:

  • List of contributors & beneficiaries: who is allowed to put assets in and who is allowed to receive assets from the Angel Impact Fund.
  • Split of contributions to Endowment & Liquid accounts: inheritance from the endowment primitive that allows having a portion of funds locked for a period of time if needed. Can specify if contributors to the Angel Impact Fund are able to define this split or if it is the sole authority of the smart contract.
  • Split of yield to Endowment & Liquid accounts: how should the yield generated by the investment strategies deployed by the Angel Impact Fund be distributed.
  • Investment strategies & who sets them: investment strategies define how the assets held by the Angel Impact Fund are distributed. Different strategies can be set for the Endowment account and for the Liquid account. The ownership of investment strategies can be delegated by the owner(s) of the Angel Impact Funds.
  • Fees: Angel Impact Fund owners can set fees on deposits, withdrawals, profits from investment strategies or TVL.
  • Ability to accept/reject contributions or withdrawals: make every deposit or withdrawal of asset conditional to its acceptance by the owner of the Angel Impact Fund.
  • Maturity of the endowment and logic to be applied at maturity: the Maturity is a set period of time until the Angel Impact Fund expires. The owner of the Angel Impact Fund can define what should happen once the maturity is reached, such as:
      • Should all the assets be divested automatically?
      • Should all contributions be halted? Should all withdrawals be halted?
      • Should funds be available to Contributors (in Endowment Account)? Should funds be available to beneficiaries (in Liquid Account)?
  • Possibility for any or all of parameters to be changed by the owner in the future: this allows Angel Impact Fund owners to set-up trustless funds if they wish so. Each parameter can be configured.

Create a DAO: either use an existing token or create a new one to create a DAO. Distribute tokens through airdrop, contribution matching or bonding curves. Governance contracts can be set up to accommodate a variety of tallying configurations (linear, quadratic, capped, etc.).

DeFi Funds #

All Angel Impact Funds accept deposits of assets that have been pre-approved by the governance of the DANO. Those assets can then be held, bought, sold, staked, used to provide liquidity or any other use available. Investment strategies decide how assets are invested.

We are actively looking to quickly add as many yield sources as possible to let our users build diversified portfolios to match the risk they are comfortable with.

In accordance with our mission of democratizing DeFi, we are building strategy builders with very clear and streamlined user interfaces that can be used by users not native to DeFi. Those interfaces can be turned into more comprehensive (and more complex) dashboards for experienced users.  

DAO tooling #

i) Governance

Multi-sig setup:

The default setup for Angel Impact Funds on creation is a 1/1 multisig. Owners can then add as many addresses if need be. This is the simplest form of an Angel Impact Fund.

At any time, the owners of Angel Impact Funds can opt-in for DAO governance with either an existing token that has been pre-approved by the DANO or by creating a new token. At the moment of the opt-in, the owners can decide which parameters of the Angel Impact Fund fall under the governance of the DAO and which are still controlled by the native multi-sig.

Existing token setup:

When the owners of an Angel Impact Fund decide to opt-in for DAO governance using an existing token, a governance contract is instantiated that allows token holders to vote on the parameters that have been chosen by the contract owner.

Eligible tokens are pre-approved by the DANO along with a designated DEX contract address that is used to convert fees from the Angel Impact Fund (generally denominated in stablecoins) into the token in use for distribution to stakers as rewards.

The owners of an Angel Impact Fund can instantiate a Matching contract that contains a reserve of tokens that are distributed to contributors following a set of rules defined by the governance of the Angel Impact Fund.

A Rewards contract can also be instantiated that enables using a reserve of tokens to increase staking rewards.

Native token setup (fixed supply):

When opting for a native token setup, owners of an Angel Impact Fund first instantiate a token contract with a customizable set of initial balances.

Tokens can be distributed via a number of options, either internal (airdrop) or external (AMM, LBP, IDO, bonds, etc…)

Native token setup (variable supply with bonding curve):

Alternatively, the owners of an Angel Impact Fund can choose to use a bonding curve to distribute their native token using any pre-approved token as a reserve asset.

The shape of the bonding curve is entirely customizable and can be made convex, concave or linear by using different parameters in the formula described in our own tokenomics.

The Governance contract offers different methods for vote tallying (linear, quadratic, capped, etc.)

For Angel Impact Funds with native tokens, a token-$HALO pair contract can be easily created right after the instantiation of their token contract

ii) Additional DAO tooling

Angel Impact Funds are designed with extreme modularity in mind in order to be able to easily integrate with existing DAO tooling such as for multi-sig, payments, RFPs, etc.

We expect however that the unique design of Angel Impact Fund will inspire exclusive DAO tooling.

Use cases:  #

I. Simple personal endowment #

Sophie’s niece Joanna turns 7. Sophie, being a strong supporter of crypto and sensitive to social impact, wants to set up a crypto savings account that would become available to Joanna when she’s 18 while donating automatically to charities.

Parameters:

Whitelisted contributors: Sophie

Whitelisted beneficiaries: Joanna

Split of contributions to Endowment & Liquid accounts: 100% to Endowment (locked) account

Split of yield to Endowment & Liquid accounts: 100% to Endowment (locked) account.

Investment strategies & who sets them: Sophie can set the investment strategy

Fees: No extra fees

Ability to accept/reject contributions or withdrawals: No need for confirmations

Maturity of the endowment: maturity set at Joanna’s 18th birthday.

Logic to be applied at maturity: transfer all balances to liquid account at the disposal of Joanna

Possibility for any or all of parameters to be changed by the owner in the future: yes, Sophie would like to have the optionality to change anything if needed.

II. Charitable estate planning trust #

Leila is a high earner and a crypto investor sensitive to social impact. After a particularly fruitful year, she wishes to offset some of her income tax with a special estate planning trust. This trust provides an immediate tax write-off for donations to charities she will make in the future while allowing her to get yield from staking her crypto assets. Any remaining funds are eventually available to Leila.

Parameters:

Whitelisted contributors: Leila

Whitelisted beneficiaries: Charities (through payment module)

Split of contributions to Endowment & Liquid accounts: 100% to Endowment (locked) account – every year the amount to be paid to charity is placed

Split of yield to Endowment & Liquid accounts: 100% to Endowment (locked) account.

Investment strategies & who sets them: Leila can set the investment strategy

Fees: No extra fees

Ability to accept/reject contributions or withdrawals: Need to confirm withdrawals

Maturity of the endowment: 10 years

Logic to be applied at maturity: set whitelisted withdrawal address to Leila’s

Possibility for any or all of parameters to be changed by the owner in the future: yes, Leila would like to have the optionality to change anything if needed (in spite of her tax scheme becoming void if she did, she still likes to have the option).

III. Employee pension plan  #

Leila wants her company, Leila Inc., to use a system that contributes to social impact for its employee pension plans.

Parameters:

Whitelisted contributors: Leila Inc.

Whitelisted beneficiaries: 1 Employee

Split of contributions to Endowment & Liquid accounts: 100% to Endowment (locked) account

Split of yield to Endowment & Liquid accounts: 100% to Endowment (locked) account.

Investment strategies & who sets them: Leila is the primary owner of the investment strategy. Can be delegated to employee if needed

Fees: No extra fees

Ability to accept/reject contributions or withdrawals: No need for confirmation

Maturity of the endowment: perpetuity

Logic to be applied at maturity: N/A (when necessary Leila Inc.’s employees can make the funds available to the employee through the Liquid account)

Possibility for any or all of parameters to be changed by the owner in the future: Yes

IV. Social impact fund  #

A licensed fund manager with deep geographic expertise wishes to raise a non-discretionary social impact fund from investors from the Angel Protocol ecosystem. The fund manager has instantiated a $FUND token contract with a balance of 30 million assigned to a donation matching contract it has previously instantiated. KYC’ed investors contribute in stablecoins and receive 1 $FUND for every $1 in stablecoin contributed to the fund.

Parameters: 

Whitelisted contributors: KYC’ed investors

Whitelisted beneficiaries: Payment module

Split of contributions to Endowment & Liquid accounts: 100% to Liquid account

Split of yield to Endowment & Liquid accounts: 100% to Liquid account.

Investment strategies & who sets them: The investment strategy (staking) is controlled by the Fund Manager (essentially money markets for idle stablecoins waiting to be invested). $FUND stakers vote on the execution message to transfer available funds to the beneficiaries (social impact projects)

Fees: 2% management fee transferred to the multi-sig

Ability to accept/reject contributions or withdrawals: Need to confirm withdrawals

Maturity of the endowment: perpetuity (can be set at 8 years to be trustless)

Logic to be applied at maturity: N/A (need to be manual/external module to calculate carried interest)

Possibility for any or all of parameters to be changed by the owner in the future: No, most parameters locked

V. Olympus lossless impact group  #

A group of $OHM token holders (the “Core Group”) have decided to come together to create a social impact DAO seeded by a grant from Olympus’ Treasury. The objective of the group is to stake the full amount of the grant and use the proceeds to fund social impact projects. This way, the grant can be returned in full to the treasury at any time. The DAO is open to any $OHM token holder to vote for the allocation of the funds.

To build early-on support for the impact group, the Core Group has set a concave bonding curve that rewards early supporters. The $OHM reserve in the bonding curve is staked to generate yield for holders of the native token.

Parameters: 

Whitelisted contributors: Anyone

Whitelisted beneficiaries: Social impact projects

Split of contributions to Endowment & Liquid accounts: 100% to Liquid account

Split of yield to Endowment & Liquid accounts: 100% to Liquid account.

Investment strategies & who sets them: The investment strategy (staking) is controlled by the Core Group. $TIME stakers vote on the execution message to send funds to beneficiaries

Fees: No extra fees (stakers are rewarded through the bonding curve)

Ability to accept/reject contributions or withdrawals: Need to confirm withdrawals

Maturity of the endowment: perpetuity

Logic to be applied at maturity: N/A (by default make all funds available to be withdrawn to the Core Group multisig)

Possibility for any or all of parameters to be changed by the owner in the future: Yes

VI. Social impact collective  #

Ocean preservation activists from the Angel Protocol ecosystem have decided to create a program to protect a South American endangered species. They decide that the collective is 100% community-led and decentralized. They instantiate an NFT contract with 1,000 member tokens and 20,000 contributor tokens for large donors, all owned by the Angel Impact Fund initially. They transfer member NFTs to the relevant members, instantiate the Governance contract and pass all rights from the multi-sig to the Governance.

Parameters:

Whitelisted contributors: Anyone

Whitelisted beneficiaries: Members of the collective earning a salary / suppliers of the collective

Split of contributions to Endowment & Liquid accounts: 100% to Liquid account

Split of yield to Endowment & Liquid accounts: 100% to Liquid account. Investment strategies & who sets them: The investment strategy (staking) is controlled by the token holders.

Fees: No extra fees

Ability to accept/reject contributions or withdrawals: Need to confirm withdrawals

Maturity of the endowment: perpetuity

Logic to be applied at maturity: N/A (by default make all funds available to be withdrawn to the Core Group multisig)

Possibility for any or all of parameters to be changed by the owner in the future: Yes

Roadmap #

Angel Impact Funds share a large portion of the codebase with Charity Endowments and DANO governance elements. At the time of writing this paper, June ‘22, 75% of the Angel Growth Funds MVP codebase overall was delivered:

  • Core endowment: 95%
  • Native multi-sig: 100%
  • Token instantiation: 80%
  • Governance contract: 70%
  • Bonding curve: 80%
  • Donation matching: 75%

 

Taking into consideration the headwinds associated with Terra’s downfall, our roadmap is the following:

Q3 2022:

  • Delivery of the MVP. Users will be able to deploy simple Angel Impact Funds with a native multi-sig.
  • Intensive testing of DAO deployments (existing tokens, bonding curves & native token) & testing of integrations
  • Develop current business development opportunities (UBI, social impact venture studio, estate planning products)

 

Q4 2022:

  • Deployment of Angel Impact Funds with DAO tooling and integrations
  • Addition of new configurable parameters DAO tooling integrations in production
  • Goal: $20 million of TVL in Angel Impact Funds

 

H1 2023:

  • More integrations
  • Intensification of business development efforts
  • Goal: $50 million TVL

 

User interface #

We strongly feel that the current governance modus operandi doesn’t live up to the opportunity provided by DAOs. Akin to the beginnings of crypto, the current user experience is poor, with many protocols using a plethora of disjointed services to achieve simple consensus: community on Discord, long-form discussions on Discourse forums, polls on Snapshot, vote on WebApp, etc.

We believe that the approach taken by Commonwealth is much sounder: a one-stop-shop for all governance-related matters. We will deliver a similar experience: an open-source forum integrated in the Angel Impact Fund community profile, with verified messages and polls (either through digital signatures with recorded hashes on the blockchain or IPFS) and direct access to attached community proposals. This way, we hope to greatly improve user experience where verified users (with tokens staked) can discuss a proposal, improve it, gauge interest, and vote to adopt it in a streamlined manner and with version control, all from one static URL.

Our vision is to translate via our interfaces the same experience as a small town: neighborhoods represent DAOs, or open communities composed of individuals focused on solving a particular problem or developing a particular aspiration. The navigation between neighborhoods is fluid to facilitate cooperation and some individuals do travel from one to the other with frequency.

Like small towns, some communities overlap, and borders become diffuse. Like small towns, utilities and resources are shared for the common good. Like small towns, some individuals or communities are more involved and gain prominence. Finally, like small towns, there is one unifying guiding body of governance: the DANO.

The DANO is the beating heart of Angel Protocol. It unites the deep, boots on the ground, work of charities of the network, and the capital captured by the allure of Angel Impact Funds, creating a powerful social impact ecosystem.

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