Decentralized finance (DeFi), nonfungible tokens (NFTs), and decentralized autonomous organizations (DAOs) are redefining charitable fundraising and distribution methods. According to crypto philanthropists interviewed by Cointelegraph, they have witnessed “new wealth distribution mechanisms” that have never been seen before as a result of ever-evolving technology related to blockchain and crypto.
Omar Antila, Product Lead for Charity, stated, “Crypto enables new innovative fundraising strategies, like charitable NFT-drop campaigns or allowing people to pool their crypto funds in DeFi protocols that earn interest for a specific cause.”
Crypto Already In Charity
To celebrate Breast Cancer Awareness Month, a number of breast cancer-focused organizations began using NFTs in October 2022. Antila mentioned that he had seen numerous other philanthropic communities established around NFTs that had raised funds for a variety of other urgent causes, such as the war in Ukraine, testicular cancer, and human trafficking.
A 1/1 Ukrainian flag NFT was funded by crowdsourcing last year by UkraineDAO for $6.1 million. Non-profit organizations in Ukraine that assist those impacted by the Russian invasion received donations from the event’s proceeds.
The potential of blockchain technology in the nonprofit sector is set to grow. The co-author of “Bitcoin and the Future of Fundraising,” Anne Connelly, is of the opinion that the cryptocurrency charity sector will soon surpass Bitcoin (BTC) and Ether (ETH) as the most popular cryptocurrencies for donations: ” However, similar to how they would accept gifts of securities, organizations will eventually accept a much wider range of tokens. Gifts of NFTs and other tokenized assets like real estate or collectibles are also expected.
Connelly continued by saying that she is of the opinion that “once […] more organizations realize the philanthropic potential of this donor segment, every organization will have a crypto donation platform, the same way that every organization accepts credit cards.”
The total addressable market for cryptocurrency charity is enormous due to their broad appeal. Antila is of the opinion that the “2 billion or so unbanked adults that exist in the world today” will soon have access to the resources necessary to “participate in the global economy, transact, and create wealth without third parties getting in the way or taking a cut” from their financial transactions.