The crypto community has donated nearly $54 million to various Ukrainian government and non-profit organizations to support Ukrainian citizens. The Ukrainian government’s wallet has received the most donations. The majority of those donations came in after posting the address to the Ukrainian government’s official twitter. A total of around $34 million has been donated directly to these wallets.
The remaining $20 million raised for Ukraine is largely split between ‘Come Back Alive’ NGO and UkraineDAO, a crowdfunding effort by members of PleasrDAO. ‘Unchain.Fund’ and ‘AidForUkraine’ have received low single-digit million donations as well.
The ability to directly donate to causes & countries in times of upheaval highlights a new, strong use case for crypto.
Ukraine Offers Airdrop to Donators
Ukraine has shown a strong understanding of crypto. Mykhailo Fedorov, Minister of Digital Transformation of Ukraine, appears to be in charge of the effort. Fedorov’s twitter account has many posts for various digital fundraisers to help the country.
As proof of how attuned Ukraine has been to the world of crypto, they offered an airdrop to all donators. If there is one thing that crypto users love, its airdrops. This early March 2nd tweet “confirmed” an upcoming airdrop with a snapshot a day and a half in the future.
After the tweet went out, there were thousands of small donations that flooded into the wallet of the Ukraine government. Some of these donations are as small as 0.0001ETH, or less than $1. Between the time of the announcement and the time of the supposed snapshot, the number of crypto wallet donators more than doubled. It currently sits at over 69,000 donations on ETH alone.
The cynical way to look at this is that the crypto-verse were trying to scam airdrops with immaterial donations and potentially using multiple wallets.
However, news of an airdrop may have been great marketing that helped spread the tweet. By getting the word out, a lot of smaller retail wallets may have heard about it and donated. These donations may have been for the cause and not for the airdrop.
Ukraine Rugs Airdrop
Hours before the snapshot, Ukraine rugged donors looking for the airdrop. Ukraine canceled the airdrop through a tweet. The ultimate move of any rugging.
Fedorov tweeted that due to the huge influx of donors, they were canceling the airdrop. The country of Ukraine would be pivoting to NFTs to help support the Ukrainian Armed Forces.
An entity raising money, promising an airdrop to drive hype, rugging, and rotating to NFTs is peak crypto. This cemented Ukraine as being one of the most crypto-knowledgeable country since Nayib Bukele became president of El Salvador. Personally, I am waiting until Ukraine offers a token with vote-escrow tokenomics to ape.
The Ukraine rug would be the clear winner for March’s Rug of the Month if the underlying situation wasn’t so dire.
Ukraine-Russia Situation Shows the Power of Crypto
The Ukraine-Russia situation is highlighting all the use cases of crypto. Ukraine & the Ukrainian people have been able to utilize crypto in a time of need. On the flip side, the level of economic and financial sanctions on Russia and the Russian people also highlights the dangers of being 100% in fiat.
Crypto Allows Direct & Immediate Donations to Ukraine
Crypto allowing for the direct & immediate donations to Ukraine and individual Ukrainians was a huge proof of concept. This was largely unprecedented in the old system. Previously, the only way to get money into places of conflict was to donate to charities. There is a lot of leak for overhead expenses. (Red cross is one of the better ones and even they have 10% overhead leak vs 25% industry average). Also, you were trusting the organization for prudence in how to use the money.
Individual Ukrainians have been able to request, receive, and access donations in crypto as well. This can all be done anonymously.
Russian Financial Sanctions Highlight Why Crypto is Better Than Fiat
On the other side, how quickly the traditional financial system has clamped down on Russian finances is also unprecedented. Russia has been banned from SWIFT. Historically neutral Switzerland is freezing Russian assets. Countries are seizing assets of Russian citizens.
Russia is preventing the transferring of assets out of the country. Russian banks are limiting the amount people can withdraw. And the local Russian currency, the ruble, has massively crashed. Visa & Mastercard cut off credit card access to Russia as well.
Completely ignoring the politics of this all, the freezing, confiscation, and banning of a major country from the world’s financial system at this scale is completely new. This sets a new precedent for how the world’s traditional system can collude on economic sanctions in the future.
The average Russian citizen is seeing their access to money and liquidity completely pulled overnight.
The level of centralization and coordination in the current system is on full display right now. Regardless of the politics, this is another use case for crypto. The old fiat system has many gatekeepers that can block you out. If your local country/economy gets frozen, having a decentralized system in place allows for some continuation of transactions.
Wrapping Up: Crypto, Ukraine, and Russia
It is unfortunate that the current sad situation is occurring. The terrible events are the clearest case yet for the benefits of a decentralized economy that crypto provides. It also serves to contrast some of the negative decisions made by MetaMask, Infura, and OpenSeas to block users based on geography.
Ukraine has shown that having a crypto-savvy politician can help to quickly get aid in the time of need. Especially if they know enough to jump on the latest memes.
By bypassing the old donation systems, aid is able to get right to the source quickly. This can be directly to individual citizens as well as governments and organizations.
The swiftness and severity of the economic sanctions on Russia highlight how dangerous it has become for the average citizen to keep all their wealth in the old fiat system. If your country’s leaders make a decision that draws the anger of the world, you can see your entire life’s savings become inaccessible overnight. Even in Ukraine, they have implemented their own restrictions on money flow.
The demand for non-freezable store of value assets seems to have just got a huge boost.
