Ukraine is on the offense amid the Russian attacks and has embraced the peer-to-peer nature of cryptocurrencies in the battle. Ukrainian government officials have remained engaged with the cryptocurrency community worldwide even as they have a target on their backs. While the situation remains fluid and the war ongoing, Ukraine's cryptocurrency agenda continues to evolve, most recently expanding to include non-fungible tokens (NFTs). Meanwhile, cryptocurrency donations have been pouring into Ukraine, primarily through Ethereum, thrusting the decentralized nature of the blockchain into the spotlight.
Mykhailo Fedorov, Ukraine's Vice Prime Minister and Minister of Digital Transformation, has been the face of the country's crypto efforts since the invasion began. Initially, he was preparing for an airdrop through which donors to the war-torn country would be rewarded for their generosity with seemingly yet-to-be-created tokens that would be distributed to donors' crypto wallets. Those plans have since changed.
Taking a step back, donations have poured into Ukraine, including over 35,000 transactions on the Ethereum blockchain, ranging from $0.30 to $30 and beyond in ETH. In total, tens of millions of dollars in crypto, with the latest estimates saying $50 million, have been donated alone in the past few days. In addition to Ethereum, the donations also extend to other popular cryptos, including bitcoin and Dogecoin.
Gavin Wood, one of the co-founders of Ethereum, gave $5 million worth of Polkadot (DOT), which is the native cryptocurrency of the latest blockchain project he founded, Polkadot. Uniswap, one of the leading decentralized cryptocurrency exchanges, added a “donate to Ukraine” feature to make it easy for users to contribute. In addition, people are donating hundreds of thousands of dollars worth of NFTs to Ukraine.
Today's update: The Ukrainian government – and an NGO providing support to the military – have raised $50.9 million, through more than 89,000 cryptoasset donations since the start of the Russian invasion.
https://t.co/mSPt4z4mSN#ukraine #crypto #russia
— elliptic (@elliptic) March 3, 2022
However, after what Fedorov described as “careful consideration,” Ukraine's airdrop plans were abruptly scuttled. Many in the cryptocurrency community took it in stride and understanding, with some market leaders calling it “the best rug [pull] ever.” Others complained, saying the government shouldn't have “incentivized” them to donate and, consequently, should return the funds, though they continue to stand for Ukraine. Others still said they had they known the airdrop would be nixed, they would have donated bitcoin instead of ETH.
After careful consideration we decided to cancel airdrop. Every day there are more and more people willing to help Ukraine to fight back the agression. Instead, we will announce NFTs to support Ukrainian Armed Forces soon. We DO NOT HAVE any plans to issue any fungible tokens
— Mykhailo Fedorov (@FedorovMykhailo) March 3, 2022
The Vice Prime Minister went on to reveal an NFT-fueled strategy “to support Ukrainian Armed Forces soon,” he tweeted. Fedorov kept the details close to the vest, though many in the crypto community are anticipating a collection with images of the war.
Modern Day Robinhood
Ukraine's Fedorov also acknowledged NFT and in-game metaverse platform DMarket, which froze the accounts of users from Russia and Belarus, saying,
“Funds from these accounts could be donated to the war effort. Nowadays Robin Hoods. Bravo.”
The suggestion sparked a debate on social media, considering the Russian population never wanted this war in the first place and many have dared to protest. Meanwhile, DMarket has stated that while the accounts of users from Russia and Belarus have been frozen, the “funds and items [skins, etc.]…have not been removed.” Meanwhile, the Russian ruble has been removed from the platform.
Countless projects and individuals support Ukraine, one of which just donated an NFT from one of the highest-profile collections out there, the CryptoPunks. This user gifted CryptoPunk #5364, which Elliptic Co-Founder Tom Robinson estimates to be worth approximately $200,000, to Ukraine's Ethereum wallet.
— Tom Robinson (@tomrobin) March 2, 2022
Not to be outdone, UkraineDAO, a decentralized autonomous organization designed to support organizations helping Ukrainians, has sold an NFT of the Ukrainian flag in an auction with a price tag of $6.5 million in ETH, which according to Elliptic, is the tenth priciest NFT ever sold. Come Back Alive, an organization that supports the Ukrainian Armed Forces, is said to be the recipient.
Crypto Prices Rise
Cryptocurrencies are designed to shine during times of crisis, with P2P payments removing the need for any centralized authority to control the funds. The result has been faster and cheaper payments making their way into the hands of Ukrainians outside of the traditional financial system. Strengthening demand for cryptocurrencies is reflected in the market, with bitcoin and Ethereum, the two leading cryptocurrencies, up by double-digit percentages over the past seven days. The bitcoin price is currently hovering at around $42,300, while the Ethereum price is inching closer to $3,000.
Cryptocurrency exchange CEOs, meanwhile, are caught in the middle as they attempt to stay current with the Russian sanctions despite a lack of formal regulation and face the potential threat of bad actors using crypto transactions to circumvent those very sanctions. As the war in Ukraine rages on, the cryptocurrency community may not agree on everything. Still, they appear united in their desire to stay true to Satoshi Nakamoto's vision when he wrote the Bitcoin whitepaper in 2008 — putting the power of payments into the hands of the people.
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