What is ETH-NIMCRUT?
An ETH-NIMCRUT is a wealth management product created by Kianga Daverington that combines a traditional Charitable Remainder Trust structure with the Web3 benefits of the Ethereum decentralized finance (“DeFi”) ecosystem.
A charitable remainder trust is a tax-exempt irrevocable trust designed to reduce the taxable income of individuals.
A charitable remainder trust disperses income to the trust beneficiaries for a specified period and donates the remainder to the designated charity.
A charitable remainder trust allows a donor to make contributions, be eligible for a tax deduction, and donate a portion of the assets.
“ETH” = Ethereum
“NIMCRUT” = A net income with makeup charitable remainder unitrust. See IRM 7.26.15, IRC Section 4947 Trusts, and the 2001 EO CPE text, Trust Primer for more in-depth technical information on charitable trusts.
“Web3” = the next major phase of the Internet.
WHAT IS “AUTonomous fixed income with charitable giving”?
“Autonomous fixed income” refers to the pre-programmed transfer of virtual commodities and virtual currencies earned from owned crypto assets. DeFi protocols and applications (dApps), including proof-of-stake public blockchain consensus operations and yield farming, make possible a new era of frictionless charitable giving.
An ETH-NIMCRUT such as the Ethereum NIMCRUT for Black Farmers (“BF ETH-NIMCRUT”) implements autonomous fixed income in part through the Trustee Daverington PLLC’s intention to commit trust assets to the operation of Ethereum 2.0 Validator Nodes, and automate the distribution of ETH proof-of-stake rewards to the Lead Interest holders during the 10-year trust term and to the Remainder Interest charitable beneficiary.
WHAT IS A lead interest NFT?
The donor’s right to receive income from an ETH-NIMCRUT is a lead interest separate from the Unitrust itself (the "Lead Interest"). This Lead Interest is a capital asset of the donor's that a Trustee can document in the form of a Non-Fungible Token ("NFT") and deposit the relevant Lead Interest NFTs into the respective donor's Ethereum wallet. The BF ETH-NIMCRUT, for example, provides for the transfer of owed income payments after the creation of a BF ETH-NIMCRUT to a new wallet address(s) via NFTs for purposes of convenience, transaction privacy or other.
Is THE ETH-NIMCRUT Suitable for anyone?
While the architecture of an ETH-NIMCRUT is open and permissionless, DeFi is new, highly experimental and subject to a variety of significant financial, market, legal, regulatory and technical risks. Anyone who creates an ETH-NIMCRUT such as the BF ETH-NIMCRUT should not do so with the intention of making an investment for private gain, but with the intention to make a charitable gift. Notwithstanding the charitable gift nature of the ETH-NIMCRUT, a donor does retain a Lead Interest and should have sufficient other income to withstand the total loss of trust assets and any related income, or the significant devaluation of crypto asset income value when measured in USD.
Any person can create an ETH-NIMCRUT by transferring eligible crypto assets from an Ethereum self-custodial wallet for which they control the private keys pursuant to a publicly available Disclosure Statement, Gift Agreement and Declaration of Trust. All such transfers are irrevocable and values in U.S. dollars are highly volatile. Accordingly, donors should have sufficient knowledge and sophistication in capital markets and blockchain to understand and accept the specific risks of crypto assets and cryptocurrencies and the inherent risks in a novel DeFi structure currently in pre-development status.
Donors of the BF ETH-NIMCRUT in particular also accept and appreciate the related party nature of the Trustee, Daverington PLLC, and initial Investment Manager, Acre of America Partners LP, both of which are controlled and managed by Kianga Daverington.