Yield Donating Strategy (YDS)
Yield Donating Strategies (YDS) are smart‑contract vaults that accept a single ERC‑20 asset and donate all profits to a configured on‑chain address. Users can transfer directly into a strategy via the standard ERC‑4626 interface; the strategy deploys funds to one external yield source (lending, staking, AMM, etc.).
When a period is profitable, the system mints new shares to the donation address. When a period realizes a loss, the system burns donation shares first to keep user price‑per‑share steady; only losses beyond that donation buffer are socialized across all holders.
Who this is for
DeFi‑native engineers who want to author strategies that fund public goods by design. We assume:
- Ethereum‑mainnet context
- ERC‑20 / ERC‑4626 familiarity
- Foundry workflow for development and testing
The model in one paragraph
A YDS strategy is an ERC‑4626 vault where profit becomes donation exposure instead of user yield. The donation address holds strategy shares that are minted on profit and burned on loss. As long as donation shares exist, user price‑per‑share (PPS) remains flat through ups and downs. If a loss exceeds the donation buffer, PPS drops for everyone (socialized loss).