🪙Donating Stablecoin Yield

Learn where does your stablecoin yield come from and the benefits of using Aave protocol

SFI allows you to donate a percentage of your stablecoin lending/supply yield to causes in the Social Impact Marketplace (SIM). You can choose any percentage to donate, for any period of time. The first organisations featured in the marketplace operate in data-rich environments focused on alleviating poverty and combating climate change.

Your USDT, USDC, or DAI is securely deposited into Aave’s collateralised lending markets. The percentage of yield you keep compounds over time, and you can withdraw your stablecoins at any moment. The portion you choose to donate is automatically transferred to the social impact organizations wallet so no third party has custody.

Social impact organizations receive donations approximately every week daily earnings can be seen through the SFI dashboard.

How Aave Lending Yield Works (and Why It Varies)

When you deposit stablecoins (like USDC or DAI) on Aave via the Stablecoin For Impact platform, your funds are lent out to borrowers on the Aave protocol. The interest (or "yield") you earn, and can keep whilst choosing to donate a percentage it to fund social impact projects. The yield you earn comes from those borrowers paying to use the liquidity.

Why Does the Yield Change?

The yield (interest rate) on Aave isn't fixed. It automatically adjusts based on demand for borrowing:

• High Borrower Demand: When many users want to borrow stablecoins, Aave raises the interest rates to incentivize more deposits. This results in higher yield for you (and therefore more impact funding).

• Low Borrower Demand: When fewer users want to borrow, rates drop. The yield you receive (and donate) will be lower in these periods.

This dynamic market-based rate ensures that the lending pool always has enough liquidity while balancing supply and demand.

Stablecoins = No Crypto Price Volatility

While the yield varies over time, your capital is always in stablecoins:

• You deposit stablecoins.

• You get back your principal in stablecoins (minus any transaction fees).

• There is no exposure to price swings like you’d see with assets such as ETH or BTC.

This means you can confidently support social impact projects with your yield while knowing your principal isn't at risk from crypto price volatility.

How it works

• Yield Varies: Depends on demand from borrowers on Aave.

• Stable Principal: Always in stablecoins, with no exposure to volatile crypto prices.

• Impact: Part of the yield you earn goes to funding social and environmental projects through our platform.

This structure provides a reliable, transparent way to generate yield while supporting real-world impact.