April 19, 2022
By Murtuza Merchant
The year 2021 was a landmark year for Non-fungible tokens (NFTs), with the total market size for this digital asset class surging to a record US$ 44.2 billion, largely due to their rising popularity and a number of use cases emerging on account of the underlying Blockchain technology’s immutability.
Essentially a digital asset registered on a blockchain, NFTs are now being used to represent popular art, real estate, intellectual property, and a host of other applications where authenticity and proof of ownership are of vital importance.
However, extending way beyond these implementations, NFTs are now driving social change by facilitating charitable fundraising for issues ranging from female empowerment to supporting philanthropic efforts in war-torn countries like Ukraine. This ability to fund initiatives for a wide range of socially important issues through the sale of NFTs could power the next growth phase for this booming asset class.
Raj Kapoor, Strategic Advisor to Acryptoverse, a blockchain and crypto advisory firm, says blockchain making a strong social impact can be highlighted with an example of Digital Arts for Social Impact” (DASI).
“Many poor families rely heavily on begging to feed their families. It is extremely uncertain and demeaning for a person to live hand-to-mouth on a day-to-day basis. The goal of the DASI initiative is to show them that there’s an alternative. One that will allow them to learn and develop in a way that will enable them to support themselves and their children into the future,” Kapoor says.
He adds that the initiative is an innovative collection of NFTs minted on the blockchain collaborating with artists around the world with proceeds of the sales of these NFTs going towards the future education of underprivileged children and improving the living conditions of kids in the rural communities around the world.
While crypto-based donations have been trending since 2017, when an anonymous donor created the Pineapple fund by donating 5,104 bitcoins (BTC) to support a range of causes including international aid and life-extension research, NFTs are now leading a new revolution in raising funds for the marginalized by reaching out to a global audience and rewarding them for their contribution.
In essence, when proceeds from an NFT sale are being used for a social cause, the donors are acknowledged with unique NFTs that can then further be traded on NFT marketplaces.
Although a recent occurrence, NFTs have successfully made their way into the mainstream transactions of society today. It overrides aspects of age, geographic location, and intention and with the world going through its next phase of the digital revolution, signs of NFTs becoming a vehicle for social change have been emerging strongly for a while now. It ranges from charitable events held in the most creative manners possible, to celebrity partnerships and other forms of cryptocurrency-based donations.
Anndy Lian, chairman of BigONE Exchange, says NFTs donations can be purely giving crypto for the good causes, where donors are attracted to charities that share similar values to their own and not monetary gains.
Adding on, the above model can be perfected with the use of DAO structures without any intermediaries and all the proceeds will go directly to those in need. This is the true meaning of doing good using crypto and blockchain technology, according to Lian.
Easily accessible, and highly convenient, this format of contributing in a more fulfilling way to society, has encouraged many artists, celebrities, socialites, and HNIs to engage with charitable causes where cryptocurrency replaces actual currency in a win-win situation for all. For instance, around this time one year ago, Twitter CEO Jack Dorsey sold an NFT of his first tweet ever which ended up generating approximately $2.9 million which was donated to charity.
Aliasgar Merchant, Developer Relations Engineer at blockchain firm Ignite says the most common causes benefiting from this format of donations have ranged from fighting the Covid pandemic to mental health and wellbeing, animal welfare like Orangutan Outreach, fighting poverty via organizations like No Hungry Kid, climate change, sports, and more, also giving birth to a whole new industry in the form of philanthropic organizations bridging the donors and receivers in various parts of the world.
Linking NFTs with an underlying cause, allows participants to engage and get timely updates on the positive impact generated by their charitable donations, for instance, a number of environment-focused organizations are auctioning NFTs representing endangered wildlife species and providing updates on how the funds are being utilized to those who have bought them.
This is bringing about transparency that was hitherto unseen before and is upending the way humans are contributing to the betterment of society and nature as a whole. A number of NFT projects like ChangeDAO, Impact, KRebels, and ARTXV are examples of how social entrepreneurs are engaging with a global audience to bring focus on often-neglected communities or causes today.
Arijit Mukherjee, founder and CEO, Yunometa, an NFT marketplace, says while the war in Ukraine is a terrible tragedy, the world has seen how NFTs have come to the aid of the country.
“The country itself is selling NFTs the way war bonds were sold previously to raise money. Apart from this, individuals and social causes have also banded together to send aid to the country by selling NFTs. The one that comes to mind is Kyiv mayor Vitali Klitschko’s brother raising funds through his NFT called Vandalz for Ukraine: WhIsBe x Wladimir Klitschko, proceeds of which will go to Red Cross Ukraine and UNICEF. And this is just one example for a country that has raised over $60 million in crypto donations so far,” Mukherjee says.
He further says Yunometa will come out with a series of NFT drops in conjunction with various projects to save the tiger, elephants, and other endangered animals.
Being non-fungible by design, every minted NFT is unique and has the potential to increase in value due to the inherent exclusivity and scarcity that is embedded in it. This is the reason why collectors are lapping up NFTs from a wide range of philanthropic projects that are currently coming to market, having realized that they could be even more valuable than say a donated piece of art or possessions belonging to famous personalities in the future.
Blockchain has been heralded by thought leaders of Silicon Valley and Ph.D. mathematicians alike as the greatest confluence of technology since the invention of the internet itself. It allows a multitude of applications, such as peer-to-peer smart contracts, the creation of digital assets, and data collection. It may also be the missing piece of the puzzle for the Internet of Things (IOT).
Eventually, NFTs are representing a new and novel approach to achieving equity in our often imbalanced society while also rewarding kind donors with potentially invaluable digital assets. As Web 3.0 develops further, more creators and entrepreneurs alike are bound to collaborate and expand the horizon of NFT-based fundraising, benefitting more of humanity and fostering a better world for future generations to live in.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.