Crypto donations: A guide to charitable and ethical crypto
As cryptocurrencies enter the mainstream, it is now possible to donate crypto to charity
- Nyan Heroes: Saving cats
- Crypto Relief: battling the pandemic
- smARTOFGIVING: playing the game
- Crypto cleaning oceans
- Making crypto greener
- Charities and crypto
Cryptocurrencies and charity are not concepts that many people would put together. But the boom in non-fungible tokens (NFTs), allied with increasing numbers of people using cryptocurrency, means that philanthropic and ethical uses of crypto – such as using the blockchain to allow people to make crypto donations – are on the rise. Want to donate with crypto but not sure how? Read on to discover how you can donate cryptocurrency.
Nyan Heroes: Saving cats
One of the crypto organisations trying to make a difference is the upcoming play-to-earn game Nyan Heroes. This game, which had a seven-day volume of $233.067 and a market cap of just under $32bn as of 11 January, making it the third largest NFT-related project on the Solana blockchain, is due to launch fully at the end of 2022. It’s a shooter in the battle royale style, allowing players to compete with each other using non-fungible tokens depicting cats that, in turn, pilot other NFTs during the game. Nyan Heroes’ founders are operations manager Max Fu, who is based in Singapore, and YouTuber Wendy “Wengie” Huang, from Australia.
While the upcoming game does seem to offer a fairly normal experience for fans of play-to-earn (P2E), there is a charitable side to the system. The game wants to use its reach to save one billion cats from euthanasia. Nyan Heroes says it wants to make a real-world difference and, in December 2021, made a donation of ETH worth $250,000 to the American charity Best Friends, which aims to end the practice of putting down healthy cats and dogs in animal shelters by 2025. In an interview with CoinTelegraph, Huang said: “That was one of the proudest moments I’ve had in this project.”
There are other charitable projects in the pipeline for Nyan Heroes. The people behind the project want to set up a digital autonomous organisation (DAO) that will give people the chance to vote on where Nyan Heroes donates its money. Huang said: “We’ll be creating a young hero DAO. And part of that DAO’s responsibilities will be deciding where to donate funds to, to which animal shelter and to what causes in that particular realm.”
Crypto Relief: battling the pandemic
The world has been hit hard by the Covid-19 pandemic, and many countries still face severe challenges. One of the countries that has faced major problems is India, with many people living in remote areas finding it hard to get vaccines and treatment for the disease.
Help is, potentially, at hand via cryptocurrency. In April 2021, Sandeep Nailwal, the Dubai-based co-founder of Polygon, established the Covid-Crypto Relief Fund, better known as Crypto Relief. This organisation aimed to use cryptocurrency donations to help efforts to fight Covid-19 in India. In May 2021 Ethereum founder Vitalik Buterin donated 50 trillion Shiba Inu coins, worth around $1.2m, to the fund. Speaking at the time, Buterin said that it represented an “opportunity to turn the meme bubble into something that could actually do good for people”. While this gift may not have been great news at the time for SHIB enthusiasts, who would have hoped that Buterin could have used his immense sway in the crypto sphere to boost the token’s price, it turned out to be pretty good news for segments of the Indian population. By July 2021, the fund had paid for food distribution in areas badly hit by the pandemic, as well as funding small intensive care units in remote areas.
There was more to come from Crypto Relief. In August 2021, the charity fund arranged a deal with UNICEF, which saw it donate $15m for syringes to be used in India’s vaccine programme. As of 11 January 2022, the fund had raised crypto worth almost $409m, split into 10 different coins and tokens. From this, $55.8m had been spent on efforts to battle the coronavirus. While it remains to be seen how much more can be spent – the process of converting crypto to cash can take a long time – there have undoubtedly been lives saved thanks to the efforts of the crypto charity.
smARTOFGIVING: playing the game
If the efforts of the Crypto Relief programme illustrate people donating crypto for a good cause, the smARTOFGIVING (AOG) project represents a cryptocurrency specifically designed to help those in need. This token, which launched in 2018, is designed to raise money for good causes. As the coin’s website says: “AOG is the first working Smart Contract that utilises technology to help the under privileged children whilst providing gaming entertainment and transparency to the contributors. For the first time ever, there is a crypto currency that generates value for the underprivileged just by being in circulation without shelling a penny out of pocket!”
SmARTOFGIVING is based in St Louis, Missouri. Its token is generated by people playing a game, linked to AOG. This generates income that is then donated to a range of good causes, meaning people can donate crypto to charity without having to dip into their wallets. The game is called Goodwill Rush and, when a play hits a certain score checkpoint, tokens are earned. These tokens can be given to a charity chosen by the player from a list. AOG then transfers the tokens earned through playing the game to the charity, thus meaning people can give crypto without having to be out of pocket themselves.
The AOG token, which operates on the Ethereum blockchain, exists in order to fund the charity’s donations. Among the causes helped is the Buwambo Church of Uganda Primary School in Gombe in Uganda, which received a grant of 10m Uganda Shillings (around $2,800) as a result of a partnership between AOG and the Great Child Foundation to build a borehole so pupils have access to clean water.
Crypto cleaning oceans
Environmentalists are looking at cryptocurrency as a way to fund attempts to clean up the planet. One example of crypto being used in an ecologically sound way is Aquari. This token aims to be used to clean the world’s water. It’s linked to a non-profit organisation, and the hope is that the coin’s users can help fund environmental efforts.
Every transaction that takes place on the Aquari system is subject to a 10% tax. Out of this, a total of 4% of the transaction is burned in an effort to boost liquidity, while a further 3% is redistributed among all Aquari holders, and the remaining 3% goes to a crypto donations wallet to finance the Aquari Non-Profit Organisation. If you think that that business model sounds a little familiar, it is because, as Aquari’s white paper says: “Aquari is a Cryptocurrency that aims to combine the reflection and passive yield farming Tokenomics of coins like Safemoon with the formation of a non-profit organisation that has the sole goal of cleaning and restoring all bodies of water on planet Earth.”
Aquari is not the only crypto that wants to make the planet’s water clean. Aquagoat sends 1% of every transaction made on its system to its charitable Ocean Blue Fund, and holders get a share of 4% of every transaction simply by holding on to the crypto. Even though Aquagoat is a relatively new currency, launched in April 2021, it’s already undergone a coin swap, with one new token, in effect, replacing 100 of the older version. The organisation behind Aquagoat is planning on releasing NFTs as part of its fundraising efforts and is also looking to create a video game.
As of 10 January 2022, Aquagoat had raised almost $72,000 for charity, with beneficiaries including the Blue Marine Foundation, the Sea Shepherd Conservation Society and The Ocean Clean Up.
A third crypto that wants to do something about the state of the world’s waters is Seachain. Formerly known as Pangea Ocean Cleanup, this coin aims to build barriers in the thousand rivers that, it says, contribute to 80% of the world’s ocean rubbish. Again, every transaction is subject to a 10% sales tax, with 5% redistributed to the coin’s holders, 2% to funding and development and the final 3% split equally (1% each) between marketing and promotion, liquidity, and a community-governed wallet.
Making crypto greener
For anyone interested in the impact of cryptocurrencies on the physical world, look at proof-of-work cryptos, which require an ever-increasing number of computers to solve an ever-increasingly difficult set of equations. As a result, they also have ever-growing power demands, which takes its subsequent toll on the environment. The overall energy usage of bitcoin over a year is estimated to be around 121 terawatts an hour, which for context, is more than the Netherlands consumes in a year. Clearly, this is a concern for many would-be crypto investors and can be seen as a stick with which to beat cryptocurrency and blockchain technology as a whole.
There are, however, greener, more ethical, cryptocurrencies. Chia coin, for instance, uses something called Proof of Space and Time to operate. The main resource for getting hold of chia is not the carrying out of complex mathematical tasks, but the amount of free space left on the hard drives of users’ computers. The more free space a chia farmer has on their drive, the more tokens they can earn. Since users are not going to be utilising their computers more than they normally would, this means that there is much less of an environmental impact.
While this sounds great, however, there is an unfortunate downside. The idea of chia, which launched in 2021, was so popular that it triggered a run on hard drives, leading to a shortage. Nevertheless, the fact remains that chia is a much cleaner crypto than the likes of bitcoin.
Another alternative is IOTA. This does away with the idea of the blockchain entirely, instead relying on something called a distributed ledger. A distributed ledger does not contain blocks in sequence,but instead has its data spread across its users, or nodes. This means that it is less reliant on utilising power, which means that it can be a greener, far more energy efficient, form of cryptocurrency.
There is also Cardano, which has become one of the biggest cryptos around. This uses a proof-of-stake consensus mechanism, which means that people are paid in ADA, Cardano’s native token, in relation to how much of the coin they already have. Again, this is a greener and more environmentally friendly way of doing things than proof of work.
Ethereum, the second biggest blockchain, is currently in the process of transferring from a proof of work consensus to a proof of stake one. When this is done, this could be a more ethical form of blockchain. However, there is no firm date for when this switch will take place.
Charities and crypto
Finally,charities themselves are making use of cryptocurrencies, blockchains, and related technology. The Listen Campaign has run a series of auctions to raise money to help people in developing countries while also setting up its own cryptocurrency, the listen token, in an attempt to raise more cash. The website of former basketball legend Kobe Bryant has auctioned off NFTs to raise money for a foundation in Bryant’s memory called the Mamba & Mambacita Sports Foundation. An NFT called The NFT Guild Philanthropist – Healthcare Heroes is currently being sold for 100 ETH (around $300,000) ,with all proceeds going to health charity Sostento.
It is not just through auctions that charities are using cryptocurrencies and similar technology, though. The Charities Aid Foundation issued a paper in 2017 outlining three potential benefits: potentially reduced distribution costs from using blockchain technology, simplifying automation through smart contracts, and boosting transparency through asset tracking. How many charities will start using this technology more remains to be seen, but it does seem to be an interesting way forward for the third sector worldwide. Regardless, many charities now offer facilities allowing supporters to donate bitcoin, ether and other cryptos.
If you want to donate bitcoin, then you will need to find a charity which accepts bitcoin. More and more charities are allowing crypto giving, but you will need to check whether your chosen cause does so.
In many cases it is not, but you will have to check with your particular tax authority whether or not this applies to you.
You can get cryptocurrency donations in much the same way as you can accept payment for cryptocurrency. You should give a wallet address, register what you are doing with the relevant authorities and hope for the best.