Cryptocurrency, blockchain and the world of Decentralised Finance (DeFi) have opened up several new avenues of financial system that everyone can benefit from. Non-fungible tokens (NFT) are also showing its potential to build globally distributed communities of like-minded individuals in unprecedented ways.
Charity, like many other sectors, is in desperate need of innovation. Charity Token, a family run company with charity at its heart of operations, intends to blend the efficiency of blockchain into the world of charity and help in fundraising.
Problems faced by charity organizations
Nearly a third of all contributors, globally, give money to charities and not-for-profit organizations outside their own country and 43% of global respondents said they do not give to charity because they do not have the financial resources. Millennials, meanwhile, contribute to 11% of all US donations.
Even with all-time high donations, public charities make the most money from charging fees. Many charities do not accept cash any more and charitable givers are being asked to “subscribe” to a charity instead.
Almost 40% of all charitable donations go to religious charities who do not have to report earnings or spending. Christian church giving is lower now than it was during the Great Depression, at less than 2% of the earnings.
The charity sector, in general, does not perform well in terms of transparency and many programs do not keep track of spending and have to only provide “round-off” figures. Consequently, many people do not believe their funds are being used properly.
Charity Token is a DeFi investing platform that brings together individuals and charities into a mutually beneficial community to build pools of investment capital and develop new revenue streams to help causes that need it most.
Charity Token offers a simple, easy-to-use platform for registered charities to receive, stake and even donate to other wallet holders of charities. It does not stop at charities, as the team believes charity is now needed across all countries and classes.
The team has designed Charity Token from the ground up with a development team that includes specialists in the fields of law, accounting and marketing to align its policies with the regulatory requirements.
The investment application is autonomous and immutable, which means the development team cannot access any wallet or funds locked within the smart contract and makes moving and distributing charitable contributions easy. The smart contracts are audited by Hacken, a leader in blockchain and IT security.
Bringing charity to the next level
Every organization on Charity Token has public statistics, detailing the donations they receive. By virtue of the contract being on blockchain, anyone can see the transactions across the network. It has been designed and built for trust and security.
With its integrated payment gateway, wallet holders can sign up and fund their accounts easily. Thereafter, they can have ultimate flexibility over their funds to donate, auto-stake, transfer or spend. This includes buying Charity Tokens NFT on the NFT marketplace. The donations can be small, ranging from a few cents to a few dollars.
Using DeFi allows the team to incentivise and reward participation with tokens. This “gamified” experience has been adopted for its easy-to-understand and all-inclusive nature, turning the everyday person into an investor. By adding a tokenizing smart contract, they can make any unique item into an NFT, so that charities can auction them to a global audience through the NFT marketplace, OpenSea.
For individuals who want to grow their investments and donate to the causes they believe in, Charity Token provides the perfect environment to take advantage of DeFi investment yields, to efficiently donate to the charities of their choice and to monitor those donations with full transparency.
On the other hand, for charities who want to increase their funding through investment returns and new revenue channels, Charity Token empowers them to find new sources of donations from all over the world, to grow this capital through DeFi investments and to develop brand new revenue from NFT opportunities.
The core components of the Charity Token are an easy-to-use decentralised application (dApp) that allows individuals and charities to invest and grow their funds, a global database of charities that individuals can use to donate funds and track their donations and a “Charity for All” rewards pool to incentivize participation and donations across the ecosystem.
ChaT Token and its functions
The Charity Token or ChaT, is a governance token that serves multiple purposes within the ecosystem. They include allowing transactions in conjunction with the smart contract, providing governance on the Charity Token platform, making the “Charity for All” reward and auto-staking possible and providing potential financial upside for early adopters. Moreover, it is the only currency accepted when paying for Charity NFT, which is slated to come later this year.
ChaT token will be launched onto the Polygon blockchain network. The key reasons for choosing Polygon over other competing blockchain networks are fast, low-cost transactions, reputable network for serious projects and its direct access to NFT marketplace OpenSea for NFT sales.
ChaT Token Rewards
The ChaT token holders are rewarded from the split that takes place through the smart contract during every transaction on the network. Around 2% of each transaction on the network is distributed equally to every token holder and 4% is also distributed proportionately to every token holder.
Each transaction on the Charity Token incurs a surcharge of 10% and it is how all the other wallets are rewarded. Which means when other users send funds, your wallet receives a portion of that too.
In terms of breakdown of the surcharge, Charity Token Pty Ltd takes a service fee of 0.5%, 6.5% is given to all token holders equally and 3% is sent to the liquidity pool via LP token and burned. The balance 90% is instantly sent to the recipient’s wallet.
In this context, it pertinent to mention that Charity Token Pty Ltd will closely monitor network performance and can dynamically adjust percentages, if required.
The liquidity pool feature will provide a more stable price and token sale-ability for users while causing a deflationary effect at the same time. This can be done through issuing a receipt of liquidity deposit from each transaction in the form of an LP token.
This LP token is then automatically sent to a “burned” address which, the Charity Token team has no access to. It thus removes the token permanently from the supply. This rate will be manually adjusted as per network performance demands.
The team expects to deflate 3% per transaction until July 2023, when the first deflation hike would occur. Their internal model shows a deflation rate at less than 1% per transaction by 2024. By decreasing deflation, the team increase auto-staking rewards equal to the decrease.
Auto-staking is the term used by the Charity Token team for their reward system. Rewards are automatically distributed through a “network re-balance” that takes place after every transaction. This feature happens automatically through a programmed smart contract, increasing all token holders amounts instantly by the nominated percentages.
A fixed percentage of each transaction is taxed and rebalanced across all token holders, a feature that makes rewards for participation possible. By increasing participation, the rewards increase only through volume. So, the added benefit of holding more tokens and saving your rewards are greater the more the network is used. Low network usage is equal to reward rebates.
Despite the enormous potential of NFT, only a small percentage of the global population have been able to take advantage of it. This has led to the conviction that it is a realm reserved for established investors and financial elites of the world.
Charity Token seeks to revolutionise charitable giving by bringing the power of blockchain technology, DeFi returns and NFT opportunities and merge them with humanitarian spirit. As the team behind Charity Token hopes it to be the home of many charities, transaction throughout could potentially be very high and, in turn, provide a lot of people a little extra in life.
Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day! Live from the Platinum Crypto Trading Floor.
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