Now Available: Portfolio Allocations

Since we first brought donor-advised funds to DeFi with Endaoment V1, we’ve been hearing from donors interested in deploying their idle assets into yield bearing protocols, and allowing their gifts to grow with the market before making a grant to nonprofits.

With Endaoment’s V2 upgrade, we are thrilled to be delivering our most highly requested feature, Portfolios.

How portfolios work

Portfolios were designed to be completely modular. Each portfolio is its own vault contract that holds the assets inside the portfolio. These contracts take in USDC and can either swap into any ERC20 asset available on Uniswap, or they can be engineered to deploy funds into yield-bearing protocols.

Portfolios also have an optional deposit cap. This limits amount of USDC that can be deposited into the contract at a given time, enabling the Endaoment.org Board of Directors to manage and mitigate risk across the system.

When USDC is deposited into a portfolio, the contract swaps the contributed dollars into the base asset of the portfolio, and deposits it into the prescribed protocol, if necessary. The contributing fund is then credited with a receipt token which represents that fund’s share of the portfolio contract’s assets.

As the portfolio accrues interest or changes in value, fund advisors can change their allocation amounts, or release invested capital to make grant recommendations to nonprofits.

Compliance & prudent management

As a 501(c)(3) public charity, Endaoment.org must comply with Uniform Prudent Management of Institutional Funds regulations across the United States. To ensure that assets under management are prudently invested, our board has articulated an investment policy and evaluation criteria for assessing and enabling new portfolios. It outlines a macro allocation target, and includes specifics about how assets and protocols will be reviewed for inclusion into portfolios.

Endaoment.org funds may hold any amount of USDC, or other USD pegged, non-algorithmic stablecoins backed with a 1:1 ratio of fiat reserves held in escrow. Any amount of those USD-backed funds may also be deployed into interest-bearing USD pegged stablecoins from yield protocols that meet the noard's published Protocol Evaluation Criteria.

Beyond the custody of USDC, equivalents, or interest bearing USDC money markets, Endaoment.org funds can also hold a maximum 25% of total platform assets in ETH, or wrapped derivatives thereof, where the derivative is non-algorithmic and backed with a 1:1 ratio of native token reserves held in escrow.

The team at Endaoment.org and the Board of Directors both felt it was important to start slow, and expand our portfolio roster thoughtfully. As this system is market tested and regulatory clarity is brought to the forefront by regulators, the Board will update this policy to accommodate new on-chain investment options.

Portfolio allocations allow our donor-advised funds (DAFs) to behave more like traditional giving accounts, and makes Endaoment the only DAF platform where donors can commit their digital assets to grow with the crypto market in a completely on-chain fashion.

Suggested reading:

• Learn about the other exciting improvements in Endaoment V2 in our official announcement post.

• Read the entire investment policy on our Documentation hub.