NEW YORK, NEW YORK - JUNE 29: Sir Tim Berners-Lee auctioned off the World Wide Web source code, which was given to the world for free, as NFT at Sotheby's on June 29, 2021 in New York City . The auction raised $ 5.4 million that Berners-Lee said would be donated to charities.
Noam Galai | Getty Images Entertainment | fake images
This giving Tuesday, philanthropy is undergoing a technological revolution. NFTs, known for powering the arts and entertainment industries, are also innovating in charitable giving, and some of the crypto community's biggest bulls and early backers are joining in.
Gemini, the cryptocurrency company founded by bitcoin billionaires Cameron and Tyler Winklevoss, introduced a "Give Back with Crypto" feature in February, giving Gemini wallet holders the opportunity to donate to more than 300 nonprofits. , courtesy of a three-year-old platform called The Giving Block. The Giving Block provides the technology stack to connect the crypto community with the philanthropic community, meaning that Gemini wallet holders, FTX users, and all other The Giving Block partners can donate any of the dozens of cryptocurrencies. directly to a non-profit organization. of your choice.
The Giving Block has become a mainstay of crypto charitable giving, partnering with dozens of platforms and exchanges and hundreds of charities. And, as is fashionable, logistics and tax implications of crypto donations They are not that different from donations of stock.
Donating cryptocurrencies is not new; United Way was one of the first and largest nonprofits to begin accepting bitcoin donations in 2014. Edwin Goutier, vice president of innovation for United Way, told CNBC that back then, "We saw a growing community and thriving with passionate individuals and a growing base of wealth. "
NFT donation
Today, Goutier sees a similar increase with NFTs.
Jack Dorsey sold his first tweet as an NFT and donated the proceeds to charity earlier this year, and CNBC itself NFT 'Lower Haines' sold at auction for over $ 61,000 just a few months later. The Winklevii have also not slept on the NFTs for the philanthropy model. To commemorate the 13th anniversary of the bitcoin white paper, Gemini displayed more than 100 phrases from the newspaper on an old CNN billboard on New York's Columbus Circle. Each phrase was sold as NFT on the Gemini-owned Nifty Gateway, and all proceeds were donated.
If donating cryptocurrency is similar to donating stocks, Nifty Gateway COO Patrick McLaren says donating NFT is analogous to donating physical goods, such as a traditional artwork or similar high-value collectible. And, McLaren says, it's in the DNA of the crypto community. "I remember when the blockchain industry was becoming an industry, and everything was happening very, very quickly, I was always amazed at how much people wanted to give back."
Longtime cryptocurrency optimist and venture capitalist Bill Tai saw the charitable potential of NFTs early on. He was the first investor in Zoom and one of the first backers of Twitter and Tweetdeck, but he has also backed DapperLabs, the company behind NBA TopShot and CryptoKitties. In 2018, he commissioned what eventually became the first NFT for charity: Honu Kitty, part cat, part turtle that yielded $ 25,000 for marine conservation. Now, three years later, Tai has created Metagood, an NFT marketplace that allows donations for every NFT launch. Metagood investors include Owen Wilson; Richard Branson's children, Holly and Sam Branson; Charlie Lee, inventor of Litecoin; and Woody Harrelson.
Metagood is one of many social impact NFT projects launching this year. Binance launched the NFT for Good collection over the summer, benefiting children's charities. OpenSea has hosted charitable drops, and DoinGud, an NFT marketplace with a donation requirement for every sale, launches to the public Tuesday.
The charitable opportunity in crypto and NFT doesn't happen without a related opportunity for new platforms to make money. While many in crypto emphasize community as the industry's standout feature, increased use of crypto means a larger market overall. "Every time you have a community of interest, you have the ability to create commerce and a currency," said Tai.
How charities view the blockchain
NFT's donation call for charities and donors lies less in the novelty of the blockchain and more in its long-term impact. The royalties that attracted the likes of Steve Aoki, Kings of Leon, and Gary Vaynerchuk to the NFT ecosystem are also attracting nonprofits that see NFT's secondary and tertiary markets as opportunities for perpetual giving.
Built on top of the Polygon blockchain, DoinGud allows artists to determine how much of the token's proceeds go to charity, as well as to which charity the sales will benefit. The platform, for now, allows an allocation of no less than 5% in the primary market, and donations from secondary market sales are determined in each NFT's individual smart contract. The default, says co-founder and curator Kyle Gordon, is a 2.5% donation on the secondary market.
Since NFTs, like traditional art and collectible assets, accumulate value over time, Goutier says the potential of this new giving model is due in part to the reason the nonprofit agreed to work with DoinGud. "We will have the opportunity to receive a share of the secondary market sales," he said.
As the original NFT increases in value, so does the donation, and the nonprofit organization first chosen by the creator benefits from every transaction, forever. The benefits are monetary, to be sure, but also cultural. With each transaction, the nonprofit organization regains its relevance. "It's a sustainable donation model," Goutier said.
For artists, NFT's earnings are generally tempered by hefty gas and transaction fees, and donating a portion of the proceeds may not seem feasible to newer creators. To combat that, DoinGud has put gasoline and minting fees on collectors, offering creators the opportunity to retain 95% of the profits from their sales.
However, like all things crypto, it is still early. While the United Way has accepted cryptocurrency donations for seven years, cryptocurrencies still comprise an extremely small amount of its $ 4.8 billion raised annually - Goutier estimates less than 1%. NFTs can help increase that number, but nonprofits are now considering other implications for their corporate wallets. "Do we keep cryptocurrencies on our balance sheet?" Goutier said.
The Giving Block has launched its own version of Giving Tuesday: NFTuesday, scheduled for December 7, in conjunction with the Sotheby's auction that benefits Sostento, a non-profit organization for healthcare workers. The two are promoting the upcoming event as the "largest NFT charity auction ever."
