Spendless - Donate Without Spending Anything

Nick Sawinyh on 30 Mar 2021

Patryk shared Spendless backstory and told us how Spendless with the help of DeFi protocols let us donate an interest earned to the causes that matter.

Hello! What’s your background, and what are you working on?

I’m Patryk and I’m a designer and a co-founder of Spendless. I got attracted to crypto because of the new product possibilities - we can finally do more stuff with money! I want to make finances more approachable by making it more fun and friendly.

Spendless is an app to donate money without spending it. It works by depositing users’ DAI into Compound Finance to earn interest and then redirecting only the interest to a charitable campaign. Spendless shows users the continuously increasing impact that their funds are generating in the metric that matters most, like the number of trees planted or the number of megabytes archived from the user’s redirected interest.

We’re live with four Spendless Campaigns that have had the following impact:

  • Planted over 23,000 trees in sub-Saharan Africa with Trees for the Future (https://trees.org)
  • Offset carbon emissions from over 17,000 air miles with Offetra (https://offsetra.org)
  • Archived over 20,000 MB of the internet with Internet Archive (https://archive.org)
  • NEW CAMPAIGN - Supported open source software and public goods with the Gitcoin Grants Matching Pool Fund (https://gitcoin.co)

Spendless is a new way to give - one that’s possible only thanks to DeFi money legos. Our app allows users to put their savings to work to support the philanthropic causes they value without having to spend down their balance.

What’s Spendless backstory?

Patrick and Victor been working on the kernel of the idea that became Spendless ever since the rDAI contracts were released at ETHBerlin Zwei in August 2019. I started talking to Patrick about how cool it would be to build a crypto version of the Team Trees social campaign. We came up with the idea for a tree planting campaign powered by DeFi interest. The three of us then partnered with Trees for the Future to create rTrees (https://rtrees.dappy.dev) in early 2020, which to date has generated enough interest from user funds to plant over 23,000 real trees! Spendless expands what we’ve learned from that project to make it a generalized DeFi giving platform.

rDAI is a protocol for depositing user funds into interest-earning DeFi protocols but instead of keeping the earnings like in a traditional savings account, splitting the static principal from the growing interest amount. An rDAI user retains the power to redeem the DAI he or she originally deposited at any time, but the interest is claimable by the recipients chosen by the user.

The concept of being able to hang on to what you have but still take financially significant actions with the interest was very compelling to us. This pattern seems to short circuit some of the psychological hangups we have about money - that it’s harder to give up what you already have than forego some future earnings, even when they have the same net effect.

What went into building the Spendless?

We wanted to lean into the wholesome vibe of doing good things. We strive to bring the magic out into the open to show off how compelling the new DeFi-powered economy can be. Slight gamification of the interface is supposed to provide instant rewards for the user and bring back memories of RTS games, where you see in real-time your impact on the world. I think we deal better with images than numbers, and we’re still experimenting with the best way to visualize your money streams.

We’re using lots of metaphors, like sleeping DAI and awake DAI, to illustrate that your money can be doing more without overwhelming you with financial lingo. Finances do not have to be cold and boring.

As soon as you use deposit input in the Spendless Campaign, you will instantly see the estimated impact and an exact breakdown of the costs. We want to be very transparent and upfront about everything, so you always feel in control. After you start donating, you can see a fun and visually driven narrative of the impact your deposits have made and continue to make. You can watch the next 0.001 of a tree tick upward and see a record of how much impact you’ve already made.

The major obstacle we’re facing is the high price of gas - earning and redirecting interest is a very gas-intensive action, and the rDAI contracts were written in the 1 gwei gas era. We’re looking closely at L2 solutions to migrate, but right now there aren’t reliable sources of yield to be able to redirect. Recent developments are encouraging however, and we’re hoping to be able to offer the Spendless experience with nearly zero gas costs later this year.

What’s your business model?

Right now, Spendless charges no fee to users depositing or withdrawing from campaigns. We are exploring revenue streams based on liquidity provision, but our top priority is building an app that users love and that makes an impact.

Our target users are anyone that wants to build their savings yet still contribute to financially support causes that matter to them. We’re always happy to talk to charities and NGOs about DeFi and to explore a Spendless partnership!

What’s your position on the regulatory landscape today?

The emergence of collateralized stablecoins like DAI has been a great development in the space, as its transparent accounting ledger reduces the need for certain forms of regulatory oversight. We build with a spirit of responsible innovation and experimentation, which hopefully can help demonstrate non-speculative DeFi use cases that do not occasion a heavy regulatory touch.

What are your goals for the future?

We want to make Spendless the most wholesome place in DeFi, with reliable and sustainable yields powering a new model of web3 philanthropy. We’ll continue to add featured campaigns, and plan to launch private campaigns soon, allowing small groups to create campaigns that can be shared via private Spendless campaign URL to a particular donor set. We’re also exploring allowing trusted and influential community members to recommend sets of worthwhile causes - their followers would be able to split their interest stream among multiple causes in a single transaction.

As mentioned above our top challenge is finding the right solution to high gas costs on L1. We want to migrate to a L2 with ample yields and nominal gas costs, and are watching the space closely for cues about where that will be - stay tuned!

What are your future thoughts for the DeFi market?

At some point in the not too distant future, the “De-” in “DeFi” will become redundant because it will just become finance, available to everyone with an internet connection. We’re utilizing the openness guaranteed by the Ethereum Virtual Machine and public ledgers to build non-extractive monetary tools. Because we can’t force anyone to use DeFi through law or other compulsive force, the services have to be valuable on their own merits. No one is going to build a successful DeFi protocol funded by overdraft fees, infinitesimal deposit APRs and high exit costs - we need to offer products that offer drastic improvements over TradFi while recognizing our users’ autonomy and freedom to leave.

Spendless is built on the simple idea that everyone should be able to put their money to work to support the causes that matter to them. It’s a new paradigm that swaps streams of user-controlled interest for likes or retweets. And it’s a paradigm that doesn’t require the sacrifice of one’s current financial power to make an impact on the world.

Where can we go to learn more?


DeFi is coming. Don't get left behind

About the author
Nick Sawinyh
Nick Sawinyh is a crypto entrepreneur based in LA. He founded DeFiprime in 2019 to offer information on emerging DeFi ecosystem. He owns small amounts of different cryptocurrencies.

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