Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), and Decentralized Finance (DeFi) are redefining the way charities collect donations and distribute funds to those who need it most.
Thanks to ever-evolving crypto and blockchain technology, crypto philanthropists have told Cointelegraph that they have witnessed “new wealth distribution mechanisms” never seen before.
“Philanthropy has traditionally been viewed as an individualistic, high-entry-cost activity, but with Web3, collective decision-making bodies like DAOs can use tools that streamline financial coordination and encourage greater participation,” Omar Antila explained. , product manager at Crypto for Charity.
“Crypto enables new, innovative fundraising strategies, like NFT-drop charity campaigns, or allowing people to pool their crypto funds into DeFi protocols that earn interest for a specific cause,” he added. .
In October 2022, several organizations focused on breast cancer began implementing NFTs to celebrate Breast Cancer Awareness Month.
Antila noted that he had seen many other philanthropic communities built around NFTswho have has raised support for many other needy causessuch as testicular cancer, human trafficking and the war in Ukraine.
Last year, UkraineDAO funded $6.1 million for a 1/1 Ukrainian flag NFT. Proceeds were donated to non-profit organizations in Ukraine helping those affected by the Russian invasion.
Meanwhile, Anne Connelly, the co-author of “Bitcoin and the Future of Fundraising,Believes Crypto Charity Sector Will Soon Expand From Bitcoin (BTC) and ether (ETH) as the main cryptocurrencies for donations:
“Over time, however, we will see organizations accepting more token spread – the same way they would accept securities donations. We will also see donations of NFTs and other tokenized assets like real estate or collectibles.
“I believe that once […] as more organizations realize the philanthropic potential of this donor segment, every organization will have a crypto donation platform, similar to how every organization accepts credit cards,” she added.
Antila said the expansive nature of crypto means the total addressable market for crypto charity is also huge.
Antila believes that “the approximately 2 billion unbanked adults who exist in the world today” will soon have the tools “to participate in the global economy, transact and create wealth without third parties getting in the way or take a part”.
This could be especially true for countries suffering from a lack of trust in their state’s monetary system, where crypto adoption rates are also the highest.
Connelly said adoption rates are highest in underdeveloped countries — including Nigeria, Argentina, Vietnam and South Africa — because they simply can’t trust the system. currency of their State:
“More than half of the world’s population lives under double, triple or quadruple inflation rates. For most people, they cannot trust their governments to effectively manage the monetary system.
“Having the choice to use crypto is an important option for citizens, but also shows governments that if they want people to use their fiat currency, they will have to clean up their act,” she added.