I built this and I run it through my small LLC. Rule 2 asks for an effectiveness argument, so the argument is most of this post. I'd rather have it taken apart here than keep assuming it works.
What it does. You deposit dollars as USDC into an open smart contract on Base. The deposit is never spent, and you can withdraw all of it whenever you like. The only money that moves is the interest the pool accrues while it sits in Aave. Every Thursday that week's interest splits three ways: 90% to one depositor chosen by Chainlink VRF, 5% to a charity, 5% to running the thing. The charity rotates weekly and is named on-chain before the draw, and the gift goes out through Endaoment, a 501(c)(3) donor-advised fund that keeps about 1.5% of the charity's slice. Doctors Without Borders received the week-8 gift.
The argument. The only thing that makes this worth defending is that it shouldn't be competing with donations. What it goes after is money doing nothing for anybody: cash sitting still, and whatever a person already writes off as lottery money. A depositor gives up the interest on their own deposit and keeps the deposit itself. So in principle every dollar that reaches a charity this way is a dollar that was never headed to one.
Prize-linked saving is an old idea with a long record behind it. UK Premium Bonds has run on it since 1956. The finding underneath it is that people who won't set money aside for its own sake will set it aside for a chance at a prize. Attach a charity slice to that behaviour and you get giving out of people who weren't giving.
Where I think it's weak.
5% of interest is a small number and no amount of framing fixes that. Aave pays about 4% right now, so a $100,000 pool would send roughly $200 a year to charity. Per dollar deposited, straightforward donating beats this by an enormous margin. The argument only survives if the money genuinely never would have been given. If it pulls even slightly from people who already donate, it's worse than nothing, and I don't have a good way to measure that.
The charity roster isn't cause-prioritised. It rotates through well-rated general nonprofits, not anything resembling a GiveWell shortlist. I don't have a principled defence of that, it's just where I started. If the view here is that the roster is the first thing to fix, I'll take the suggestions seriously.
It's also tiny, and I'd rather say so than have someone discover it. $42.50 in the pool, $29 of which is my own deposit and excluded from winning in the contract. Six wallets in total. Yesterday's draw paid a prize of about three cents. There's been a draw every Thursday since late June and all of it is on-chain, but a weekly record isn't evidence of scale.
Risks, plainly: there's no paid third-party audit. The source is verified on Basescan and anyone can read it, which isn't the same thing. The deposits sit in Aave, so that's a second thing that can break. No-lose describes the draw, not the software; smart-contract risk applies.
https://charitybillionaire.com (the Transparency page lists every contract and every draw)
What I actually want to know is whether the counterfactual claim holds, or whether "money that would never have been donated" is just the thing every founder says about their own project and nobody can demonstrate.