Aave proposes a "principal retention" charitable donation mechanism: donate profits, not principal

Aave has officially proposed a principal retention charitable donation layer, allowing users to continuously donate the generated income to charity while retaining control and liquidity of the principal.

The proposal is currently undergoing a temp-check vote in the Aave governance forum. Its core aim is to address three major pain points of traditional charitable models: donors must permanently give up the principal, the funding flow of charitable organizations is unstable, and there is a lack of transparency in the use of funds.

According to the proposal, users can deposit assets into yield-generating infrastructures like Aave, direct the earned income to donations, and withdraw the principal at any time.