By Antonio “I.P. DA MAN” Mitchell, Founder and CEO of Zaddy Inu
Crypto is experiencing unprecedented rapid adoption. Major businesses and nonprofit organizations – as well as some governments – have already begun to accept crypto for payments and donations. As the world inevitably shifts toward valuing blockchain investments and funding solutions as much as traditional fiat, the way we facilitate charitable giving must shift, too. Beyond just enabling the donation of Bitcoin, DeFi can be used for charitable purposes in a powerful way when blockchain projects establish a charity wallet as part of their business model.
Blockchain-Ensured Accountability Is Attractive
Building philanthropy into a blockchain project has many benefits, the primary being that it is traceable. Traditionally, companies and private investors can claim that a percentage of their fiat assets or profits will go to charity, but it can’t be tracked in real-time. Corporate commitments to philanthropy in fiat are verified ceremonially or in an annual report. Blockchain projects offer investors the opportunity to easily participate in and monitor the philanthropic giving of projects they support. Because a charity wallet is public, a project’s supporters are able to watch it grow alongside personal or institutional investment. Plus, a project is held accountable for its commitment to philanthropy.
Charity Wallets Are a Strong Token Stabilizer
Charity wallets can help stabilize a chart, depending on how many tokens are held in that wallet. If the number of tokens in the charity wallet is a significant percentage of the total supply, then those tokens are likely to be donated in increments at set times, such as quarterly or monthly. Having regular donations of smaller amounts – instead of a single, large lump sum – helps increase a token’s support level because it creates consistency.
Charity Wallets Broaden Philanthropy Options
Charity wallets no longer have to convert holdings from cryptocurrency to fiat in order to be transferred to beneficiaries. Token donations enable communities to participate in blockchain projects and experience the financial benefits of holding a crypto wallet of their own.
A project with philanthropy of any form built into its roadmap can also be beneficial for holders with large sums who wish to receive a tax break by offering a place for a projects’ supporters to donate directly. The current mood among Web3 investors is to find a way to ethically donate crypto as a way to reduce the amount of capital gains tax they are responsible for. When a project makes it easy for holders to donate their token to projects supporting communities in need, it provides a novel use-case for its tokens.
Fight FUD with Altruism
A charity wallet or quarterly token donation lets investors know that there’s a genuine philanthropic goal behind the blockchain project, and that the project places a distinct value on assisting communities. This visible activity will attract supporters committed to altruism, uniting private investors and token users who share the common goal of giving back.
Two things are accomplished here: positive brand awareness and the facilitation of good deeds. It also indicates that a project is more than just a pump and dump scheme, so investors can feel more confident buying in. This can have a positive impact on the investors' shared funds, as the word spreads about the collective efforts being prioritized by the project. In a world that lives and dies by “fear, uncertainty, and doubt” (aka, FUD), a charity wallet is a powerful asset.
WAGMI is a Group Effort
The ultimate benefit of a project facilitating donations or creating a charity wallet is that it leverages the power and strength of a group in support of a good cause. Having a charity wallet – or some other formalized philanthropic part built into a blockchain project’s mission – is a great way to not only set funds aside, but to also build hype focused around the use of a token, instead of the investors or founders. If a percentage of all tokens in circulation is in a charity wallet, it will grow organically alongside the project, so any support or success experienced by investors is immediately earmarked for charitable giving.
DeFi is the future of investment initiatives, including philanthropy. When charity is included in a blockchain project at the outset, it is positioned to benefit the project as well as investors.
About the author:
CEO, entrepreneur, and writer, Antonio “I.P. DA MAN” Mitchell is the Founder and CEO of Zaddy Inu. As a hip hop and R&B artist, he has spent the last few years recording music and perfecting his craft in Las Vegas. With success under his belt, he aims to help others reach their true potential. I.P. is passionate about sharing the knowledge he has gained from his experience in the digital world and the real world. He hopes to have an impact on today’s society and generations to come.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
