Angel Protocol utilizes the power of Terra decentralized financial applications to create perpetual charity endowments. These endowments allow donations to compound over time, creating an indefinitely growing source of revenue for charity organizations. By creating a foundational source of income that grows over time, Angel Protocol seeks to empower charities with a pathway to financial freedom.
In addition to fulfilling a beneficent worldwide use case, Angel Protocol supports the growth of the Terra Ecosystem as a whole. By locking up endowments indefinitely, Angel Protocol effectively raises the floor UST TVL, reducing the amount of UST in circulating supply. As all Lunatics now, increasing the market cap of UST is the main way to raise the price of LUNA.
Angel Protocol begins with charity. Any charitable organization can apply to create its own endowment fund at no cost. The only requirement is a Terra wallet. If a charitable organization is uncomfortable with Terra, they are also able to create a wallet through a custodian such as Fireblocks, or by using the direct implementation of Angel on Kado.
Once a charitable organization is hosted on Angel Protocol, it can begin to receive endowments. Endowments are much more valuable than one-off donations – they are designed to invest contributions into perpetually compounding funds that use Terra decentralized financial applications – namely Anchor Earn. This allows most of the principal to remain intact while utilizing yield as revenue for charitable efforts. Watch what happens when a $100 endowment is made using Angel:
$20 is immediately available to the charity, while $80 is invested, in this case to Anchor Earn. Out of the $16 of yields from the first year, $4 is reinvested, and $12 goes to the charity. Because the principal has increased by $4, next year the charity receives more yields. In the second year, $4.2 is reinvested, and $12.6 goes to the charity.
In this way, every Angel Protocol endowment continually grows and rewards the charity more each year. Additionally, as the charity organization is awarded more endowments, the income perpetually increases. A $100 endowment will match, in yields, the initial principal in roughly 6 years. After 20 years, the endowment will have donated the charity quadruple the amount of the original endowment.
As the Terra ecosystem evolves, other yield-producing applications, such as Apollo or Spar, will be available. Charity organizations are free to tailor the investment scheme of their endowments to suit their needs. By utilizing the financial applications native to Terra, Angel endowments will be able to offer charitable rewards that consistently outperform traditional institutional endowments by orders of magnitude – and do it in a way that creates a perpetual flow of revenue.
The Angel Alliance began with a tweet – an announcement that ApolloDAO will donate 1% of revenue to Angel charities. Loop Finance picked up the thread, dedicating 10% of the token supply to be staked for charity yield. Their charitable efforts snowballed into an alliance of over 43 protocols, validators, and NFT projects offering to support Angel Alliance continually, forever.
Simply by existing, the Angel Alliance fulfills two colossal use cases. Primarily, the Angel Alliance creates perpetual charity endowments that elicit a positive change in the world. But it also sets in motion a system that will lock away incremental amounts of UST forever. Doing so raises the UST total value locked, and thus effectively decreases the circulating supply perpetually. This action secures the health of the whole Terra network, promoting demand for UST with an ever-compounding floor. It is estimated that ApolloDAO’s participation in Angel Protocol will contribute over 200,000 UST in the first year alone – and that is only one of the myriad participants in the Angel Alliance. This stroke of genius almost sounds like a mastermind’s evil plan for world domination… until you remember that this financial effort is founded in charity.