Non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and decentralized finance (DeFi) are redefining how charities raise donations and distribute funds to those most in need.
Through the ever-evolving crypto and blockchain technology, crypto philanthropists told Cointelegraph that they have witnessed a “new wealth distribution mechanism” that has never been seen before.
“Philanthropy has traditionally been seen as an individualistic activity with high costs, but with web3, collective decision-making bodies like the DAO can use tools that speed up financial coordination and encourage more participation,” explained Omar Antila, Product Lead at Crypto. for Charity.
“Crypto enables new innovative fundraising strategies, such as charity NFT-drop campaigns, or allowing people to collect crypto funds in a decentralized finance protocol (DeFi) that earns interest for a specific cause,” he said.
In October, several organizations focused on breast cancer started implementing NFTs for highlighting Breast Cancer Awareness Month.
Antila notes that he has seen many others philanthropic community built around non-fungible tokens (NFTs), the holder raise support for many other causes in need, such as testicular cancer, human trafficking, and the war in Ukraine.
Last year, UkraineDAO, a decentralized autonomous organization crowdfunded $6.1 million for 1/1 Ukrainian flag nonfungible token (NFT). The proceeds go to a non-profit organization in Ukraine that helps people affected by the Russian invasion.
Meanwhile, Anne Connelly, co-author of “Bitcoin and the Future of Fundraising” believes that the crypto charity sector will quickly expand from Bitcoin. (BTC) and Ether (ETH) is the main cryptocurrency for donations:
“However, in the long run, we will see organizations receiving a larger spread of tokens – similar to how they receive securities rewards. We will also see NFT rewards and other token assets such as real estate or collectibles.
“I believe once […] the more organizations recognize the philanthropic potential of this donor segment, every organization will have a crypto donation platform, in the same way every organization accepts credit cards,” he added.
Antila said that the very nature of crypto means that the total addressable market for crypto charities is also large.
Antila believes the “2 billion or more unbanked adults in the world today” will have the tools “to participate in the global economy, transact, and create wealth without third parties interfering or cutting them off.”
This may be true for countries that do not trust their country’s monetary system, where crypto adoption rates are also highest.
Connelly says adoption rates are highest in underdeveloped countries – particularly Nigeria, Argentina, Vietnam and South Africa – because of the unreliability of the country’s monetary system:
“Over half the world’s population lives at double, triple, or quadruple inflation. For most people, they cannot trust their government to manage their monetary system effectively.
“Having the option to use crypto is an important option for citizens, but it also shows the government that if they want people to use fiat currency, they need to clean up their act,” he added.