Data from Chainalysis, an on-chain analytics firm, the number of crypto donations for war-stricken Ukraine is still increasing. The firm released its report as the Russian-Ukraine war completed one year.
According to the report, as of February, almost $70 million in crypto donations had been pledged in support of Ukraine. It added that the majority of donations were made in Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization.
Notably, Ethereum was the most popular, making up for around 41% of the total whereas Bitcoin donations accounted for around 32.5%. Tether was the third most popular crypto asset to be donated at 16.5% of the total.
While global regulators and bankers have been cracking down on the crypto industry, it continues to serve worthy purposes. It has many benefits for donation purposes since it is faster and cheaper to send across borders than using traditional methods such as banks.
Aside from cryptocurrencies, there have been additional donations in the form of non-fungible tokens (NFTs). Sources reveal that UkraineDAO’s auction of a Ukrainian flag NFT raised $6.5 million for the country’s war efforts. Chainalysis noted that these donations were small when compared to fiat donations but they show a positive side of crypto enthusiasts. It wrote:
They demonstrate the philanthropy of cryptocurrency enthusiasts across the globe and Ukraine’s willingness to accept a wide variety of digital assets.
It also noted that in emerging markets such as Ukraine, cryptocurrencies have the potential to act as a reliable store of value. It can also boost financial independence and reduce cross-border transaction costs.
In addition to helping with war efforts, cryptocurrency donations are likely to encourage increased adoption and strengthen an economy that has otherwise been hampered by the war.
However, several agencies suspect the actual amount of crypto donations to be much higher including the Financial Times. Citing Elliptic Research, the outlet said more than $200 million worth of crypto made its place in pro-Ukraine causes. It said:
Ukraine bet big on crypto by offering donation addresses literally hours after the invasion, and it did pay off.
Several reports have cited that Ukraine has been purchasing military equipment using cryptocurrencies. Recent reports cited that Ukraine has been purchasing military equipment using cryptocurrencies. The country’s deputy digital minister claimed that 60% of suppliers were able to accept crypto in return for combat essentials.
Previously, in August, Vice Prime Minister of Ukraine Mykhailo Fedorov revealed the expenses that were covered using the $54 million of cryptocurrency donations. The most expensive item was an unmanned aerial vehicle (or drone), costing $11.8 million. Following that, the nation spent $5.7 million on computer hardware and software and $6.9 million on armored vests.
Chainalysis also compared the crypto donation received by Ukraine to that of Russian causes. It was found that around 100 pro-Russian organizations received an estimated $5.4 million, which is less than 8% of the crypto donations sent to pro-Ukraine causes. Reportedly, over 87% of the funds received by pro-Russia groups have gone to centralized exchanges. Following is a chart reflecting the same:
In December, the United Nations also revealed its plans of adopting a decentralized mechanism to help Ukraine. The Stellar Development Foundation (SDF) announced its partnership with the United Nations High Commissioner for Refugees (UNHCR) to pilot a digital cash disbursement system.
With the adoption of a decentralized protocol to send aid, the UN will be able to send money faster and cheaper than conventional methods. Also, in the current scenario, the Ukrainian banking infrastructure is crippled due to the ongoing war.
However, the help from the crypto community is not just limited to Ukraine. The community has extended support to the people of Turkey who have been severely hit by the series of devastating earthquakes. Chainalysis noted that around $5.9 million in cryptocurrency donations has poured into organizations providing earthquake relief.