Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), and Decentralized Finance (DeFi) are redefining how charities collect donations and distribute funds to those most in need.
Through ever-evolving blockchain and cryptocurrency-related technology, cryptocurrency philanthropists told Cointelegraph they have witnessed โnew wealth distribution mechanismsโ never seen before.
"Philanthropy has traditionally been viewed as a high-entry, individualistic activity, but with web3, collective decision-making bodies like DAOs can use tools that streamline financial coordination and encourage greater participation," explained Omar Antila, product leader in Crypto. For charity.
โCrypto enables innovative new fundraising strategies, such as NFT giveaway charity campaigns, or allowing people to pool their crypto funds into decentralized finance (DeFi) protocols that earn interest for a specific cause,โ he added.
In October, several breast cancer-focused organizations began implementing NFTs to highlight breast cancer awareness month.
Antila noted that she has seen many other philanthropic communities built around non-fungible tokens (NFT), which have raised 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, funded $6.1 million for a 1/1 Ukrainian flag non-fungible token (NFT). Proceeds went to non-profit organizations in Ukraine that helped those affected by the Russian invasion.
Meanwhile, Anne Connelly, co-author of "Bitcoin and the Future of Fundraising," believes that the crypto-charity sector will soon expand from Bitcoin. (BTC) and ether (ETH)) as the main cryptocurrencies for donations:
โOver time, however, we will see organizations accepting a much larger number of tokens, similar to how they would accept gifts of securities. We will also see NFT giveaways and other tokenized assets like real estate or collectibles."
"I think once [...] As more organizations realize the philanthropic potential of this donor segment, every organization will have a crypto-donation platform, in the same way that every organization accepts credit cards,โ he added.
Antila said that the far-reaching nature of cryptocurrencies means that the total addressable market for cryptocurrency charity is also huge.
Antila believes that the โ2 billion or so unbanked adults in the world todayโ will soon have the tools โto participate in the global economy, transact and create wealth without third parties getting in the way or take a part."
Related: Charities risk losing a generation of donors if they don't accept cryptocurrency
This could be especially true for countries that suffer from a lack of trust in their state's monetary system, where cryptocurrency adoption rates are also higher.
Connelly said adoption rates are higher in underdeveloped nations, especially Nigeria, Argentina, Vietnam and South Africa, because they simply can't trust their state's monetary system:
โMore 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 run the monetary system.
โHaving the option to use crypto is an important option for citizens, but it also shows governments that if they want people to use their fiat currency, they will need to clean up their act,โ he added.
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