Sam Bankman-Fried, Changpeng Zhao, Mt. Gox and Luna. These names and their associated scandals have dominated crypto news and buried cryptocurrency and blockchain's potential for revolutionary humanitarian impact. The headlines tolling doom have cast a shadow over the work of millions of dedicated mathematicians, entrepreneurs, engineers, artists, ecologists and community advocates and repelled onlookers, creating a profound missed opportunity to reshape philanthropy.
In January 2024, The GivingBlock, one of the largest crypto donation platforms, reported that crypto donations had reached more than $2 billion, projected to exceed $10 billion by 2032. Crypto donors, who are largely millennials, contribute on average 128 times more per donation than cash donors. By leveraging tax incentives like capital gain offsets to eliminate taxes on donations, crypto giving is as financially smart as it is impactful.
But the benefits of crypto giving go far beyond the financial incentives. Social impact is embedded in the foundation of Web 3. This new economy is fueled by cutting out traditional middlemen, banks, and allowing transparent, secure, and borderless peer-to-peer payments. No ID or passport is needed. This allows people, especially the unbanked, to have full control of their assets with minimal fees. In short, Web 3 provides a path for more equitable wealth distribution and decision-making.
At Devcon’s 2022 Sustainable Blockchain Summit in Bogotá, Colombia, I met innovators harnessing blockchain to offset carbon emissions, preserve the Amazon Rainforest and curb deforestation and pollution. These efforts highlight the potential to align blockchain with ecological and humanitarian goals.
When NFTs were booming in 2021 and 2022, we saw dozens of projects raising NFT sales for charity. NFTs are an ideal vehicle for giving back because the owner can dedicate a percentage of sales to charities of their choice in perpetuity. Artblocks, a platform that sells regenerative digital art, raised $48 million in 2021 alone. New Story, a nonprofit building homes to alleviate homelessness worldwide, partnered with artist Brian Ku to release a limited edition series of NFTs where each sale provided a 3D house for a family in Latin America.
Now, with the surge in memecoins, we are seeing even more funds diverted to charities. Ethereum co-founder Vitalik Buterin has championed using memecoin momentum for good, saying, “I want to see quality fun projects that positively impact the ecosystem and the world.” In October 2024 alone, he donated nearly $2 million in memecoin winnings to charities, including $532,000 to the Effective Altruism Fund's Animal Welfare Fund and over $1 million to the United Humanitarian Front, an organization providing grants to humanitarian relief initiatives in Ukraine.
Vitalik Buterin (@VitalikButerin) sold 8 more #memecoins for 651.6 $ETH ($1.62M) in the past hour!
— Spot On Chain (@spotonchain) October 13, 2024
They include:
• 10B #MOODENG ($982K) for 395.95 $ETH
• 200K $MSTR ($231K) for 93.23 $ETH
• 500M $EBULL ($183K) for 73.79 $ETH
• 15M $POPCAT ($67.2K) for 27.11 $ETH
• 31.4T… https://t.co/tuRpJiuDYP pic.twitter.com/Wtdy3gPYWU
Influencer Haliey Welch has also leveraged her overnight-celebrity status and her top five podcast to advocate for the use of memecoins for good. In 2024, she started Paws Across America, an organization that brings financial support and advocacy to animal charities across the U.S.
"By starting Paws Across America, my newfound financial blessings will be shared with the animals that need it most," she said.
A lifelong dream of mine finally came true, I now have my animal foundation up and running!
— Haliey Welch (@HalieyWelchX) August 28, 2024
Paws Across America is here!! 🇺🇸
Ever since my life changed so publicly, I realized there had to be a reason for it
Growing up, the one constant in my life was my pets and they helped… pic.twitter.com/nH2DMhzZfx
The goal of philanthropy in Web 3 is to have donations embedded in our global financial system. Imagine being able to hold a stablecoin (backed by cash and U.S. treasuries) and opting to have your earned interest fund your favorite charities. Crypto holders that stake popular tokens like Ethereum or Solana could use their rewards to fund a donor-advised fund. Investors who provide liquidity for tokens on decentralized exchanges could donate the trading fees they accrue. NFT collections could dedicate a percentage of sales to an organization or DAO treasuries could donate a percentage of their treasuries. With Web 3, the opportunities to seamlessly embed social impact into financial transactions are endless, and Givepact’s API is helping to make that future possible.
With crypto approaching a $3 trillion market cap and drawing bipartisan interest, now is the time to look beyond the negative headlines and recognize how this technology is reshaping the future of philanthropy.
