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Crypto Philanthropy: How Digital Assets Are Driving Charitable Giving

Crypto Philanthropy: How Digital Assets Are Driving Charitable Giving

In 2021, crypto philanthropy saw a massive surge, with cryptocurrency donations rising by 16 times and reaching $500 million in the United States alone, the Web3 tech company that specializes in crypto philanthropy, Givepact, told Technopedia.

While platforms that specialize in crypto donations are yet to see another repeat of the 2021 bull run, the chief operating officer of Endaoment, Zach Bronstein, noted that crypto investors continue to drain their Donor Advisor Funds (DAFs) and give their remaining dollars to charities.

“Folks are excited to get the contributed dollars to the charitable recipients, and are using this slower period of blockchain activity to focus on making impactful and meaningful gifts.”

What is Crypto Philanthropy?

Crypto philanthropy is very similar to other forms of charitable giving, with the only major exception being the type of asset donated.

“The recipient has to understand all of the mechanics of holding a wallet, knowing how to transfer the token to and from an off-ramp or exchange, as well as keeping it secure and safe,” the co-founder of Bracket Labs, Pelli Wang, explained.

Givepact’s Maule added that in many instances, one of the most exciting parts of crypto donations is that, on average, crypto donors tend to give 82 times more money than “cash” donors, which could amount to $10,500 per donation.

In addition, crypto philanthropy is driven by one of the biggest names in the industry – Vitalik Buterin, the founder of ethereum (ETH), who, over the years, has donated vast amounts of crypto for a number of charitable causes.

“We have noticed a trend that schools, universities, and other research and higher learning institutions typically find themselves at the top of this list. I would argue that donors here are not just excited to give back to their college or university but rather are interested in supporting interesting and potentially greatly impactful research that’s being carried out. This is very much in line with the ethos of the Web3 space, to find funding opportunities that can translate not just to doing some good, but to being able to do some good that was previously unattainable,” Endaoment’s Bronstein said.

In 2022 alone, the company saw $22.8 million in crypto donations, with the average donation size being $43,000.

Crypto Philanthropy Pros and Cons

Crypto donations are processed at a much faster rate than traditional donations, the author of NFT: From Zero to Hero, Anndy Lian, told Technopedia, which could come in handy in times of emergencies.

In addition, the fact that crypto is borderless allows individuals to make crypto donations to charities worldwide, regardless of their location.

Lian said:

“The transaction costs for receiving crypto donations are lower than those for credit cards, debit cards, and wire transfers. This means that more of the donation goes directly to the cause.”

Bracket Labs’ Wang added that because cryptocurrency transactions are transparent, donors can openly see how much funds were collected for a certain cause.

On the other hand, cryptocurrencies remain a niche. Digital assets are highly volatile, which could also push many individuals against opting for crypto donations.

“The greatest challenges with crypto donations are fluctuations and regulations. The price of cryptocurrencies is highly volatile, which affects the value of donations. So, nonprofits need to be strategic about converting their bitcoin payments. When it comes to regulations, different regulations depend on the jurisdiction, which makes it complicated because the organizations need to navigate the procedures and comply with the laws,” a founder at Coin Data Flow, Alexandr Sharilov, told Technopedia.

What About Tax Implications?

One of the biggest advantages of crypto philanthropy is the tax breaks the donors get and the tax credit, Sharilov explained. This means that in many cases, donors are eligible to get a charitable contribution deduction when filing their tax returns at the full fair market value of the cryptocurrency that they donated at the time of the donation.

Wang noted that while tax deductions are one of the biggest reasons why many donors would opt for a crypto donation as opposed to cash, each county recognizes the value of cryptocurrencies differently.

In the US, for example, the Internal Revenue Service (IRS) treats digital assets as property for tax purposes meaning that donating digital assets is not a taxable event, and donors can claim a charitable deduction for the fair market value of their donation, Lian explained.

Companies specializing in crypto philanthropy are also keen to educate the public on how easy it is to contribute to charitable causes using digital assets.

“What is key here is explaining to folks that donations of crypto are treated just like donations or stock or property – if you have held the asset for over a year, you can deduct the current market value of the asset (if you have held less than one year, you can only deduct the cost basis of that asset). While of course, this is not tax advice, clearly donations of appreciated assets can create additional deductions for donors, and the non-profits reap the rewards of the appreciation by receiving additional funding!”

The Future of Crypto Philanthropy

Companies specializing in crypto philanthropy are bullish, betting that the field will continue to prosper in the years to come. Maule compared the current rate at which crypto adoption is growing to how the internet was in 1998.

“The interest in crypto is expanding, and we’re just at the beginning of seeing this take off. If $500 million in crypto was donated in 2021 with limited pathways to give, we are betting on a future that projects crypto donations will exceed $10 billion within a decade.”

Edaoment’s Bronstein added that even in the bear market currently faced by the cryptocurrency space, the company has seen over $52 million donated on its platform, with the metrics continuing to grow.

“Put this together with the fact that new folks are onboarding into web3 daily, and large organizations like Coinbase are working to tackle the crypto UX problem – we are sure to see many more folks join us in this space in the next few years, which will in turn lead to additional crypto donation activity, especially as folks learn how easy it can be, and the benefits that can be wrought.”

Making Crypto Philanthropy More Accessible

From UNICEF to the Rainforest Foundation, a number of charities have started to accept crypto donations showing just how easy it is for charities to “jump onto the trend”.

Lian and Sharilov both explained that organizations can start accepting crypto donations in two easy ways. Either through a hands-off approach by leveraging a crypto payment processor in the likes of Givepact or Endaoment to accept the donations on their behalf or through a hands-on approach by holding the crypto donations in a wallet controlled by the organization itself.

Bracket Labs’ Wang noted that before charities get involved in the Web3 space, they must make sure a member of their team is familiar with the crypto world.

“There are many benefits to tapping into the crypto/Web3 audience including higher average donations; younger, higher earning donors; potentially less fees to process. However, you need to make sure you have: a wallet provider or custodian; an off-ramp or exchange; tax/accountant; ID or KYC/AML provider and a security/compliance monitor.”

 

Source: https://www.techopedia.com/crypto-philanthropy-how-digital-assets-are-driving-charitable-giving

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Are Regulations and Sanctions Driving Change in the Crypto Industry?

Are Regulations and Sanctions Driving Change in the Crypto Industry?

The powerful combination of incoming crypto regulation in the US, and the immediate global impact of Russian sanctions, mean the crypto exchange market looks to be in for a serious shake up in 2022. Just this week US Senator Elizabeth Warren announced a new piece of legislation to stop crypto businesses outside the US from working with sanctioned companies. It also authorizes the Financial Crimes Enforcement Network (FinCEN) to force US citizens with crypto transactions of $10,000 or more to report them.

Clearly global sanctions against Russia have moved crypto exchanges firmly into the center of geo-politics for the first time. Coinbase announced it was banning 25,000 Russian accounts. While Binance declared that: “To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.” But just as revealing was the news from Wasabi Wallet that it will start introducing censorship methods into its mixing procedures, showing that fear of regulation was starting to impact beyond mainstream exchanges even before Warren’s planned legislative action.

What this means in all probability is that the advantage the exchanges outside the US had in largely ignoring regulations, benefiting from lower overheads and restrictions to their business activity is well and truly over. It’s not all bad news, as the positive response to the US administration’s crypto executive order shows, but it certainly means the industry needs to consider what this means for the long term, and what this means for crypto investors and traders looking for the best deal or the most secure transactions.

The US executive order underlines the seismic changes in the administration’s approach to crypto by seeking “to establish the first-ever comprehensive federal digital assets strategy for the United States” and by directing the Depart of Commerce to create a framework that “drives U.S. competitiveness and leadership in, and leveraging of, digital asset technologies.” In summary the administration’s six key priorities, according to the fact sheet, are to protect US interests, protect global financial stability, prevent illegal uses, promote responsible innovation, financial inclusion, and US leadership. As confirmed in a CoinDesk report, the order does not lay out specific positions the administration wants agencies to adopt, or impose new regulations on the sector. Indeed, it was welcomed by many in the industry who see it as a positive step forward. According to Jeremy Allaire, the CEO of Circle, which runs stablecoin USDC, “this is a watershed moment for crypto, digital assets, and Web 3 akin to 1996/1997 entire government wakeup to the commercial internet.”

Circle CEO Jeremey Allaire in a Twitter thread responding to the news.

But as the legislative moves by Senator Warren demonstrate, its actions and not words that count. The recent news of action to reign in the SEC by the US Congress after its enforcement arm chased “information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigations” shows that significant risks for crypto exchanges remain while the US decides its crypto policy.

Despite the understandable focus on the US crypto regulation in recent weeks this sea change hasn’t appeared overnight, for example the China ban on crypto trading and mining took place in 2021, after the ICO ban in 2017. In contrast in Singapore, a leading location for the crypto industry, as late as July 2021, while the rest of the world was hellbent on cracking down on crypto, “crypto players like Binance have found Singapore to be a paradise of opportunity, even while a regulations storm looms over the industry in other parts of the globe.” As recently as last October following the latest crypto crackdown in China, the city-state of Singapore was seen as a chief beneficiary of fleeing businesses.

But then in December 2021 Binance, with a daily turnover of US$76 billion, no doubt fed up with the delays and opaqueness of the MAS licensing system, withdrew its Singapore application. In 2022 how Binance responded is also revealing, with its move to partner with Paysafe in the UK, providing the exchange with access to the UK payments network despite concerns from the UK financial regulator the FCA. While this week Binance’s CEO CZ has been meeting Brazilian regulators after signing an MOU to buy a securities brokerage and secured a virtual asset license in Dubai in a series of moves underling its look to secure its future in a more regulated crypto marketplace.

All these moves, along with competitors such as FTX and Coinbase, are to establish a future in the more regulated global environment in crypto. Anndy Lian, chairman of BigONE Exchange said, “I believe these twin forces of policy regulation led by the US, and even tighter Russian sanctions on crypto transactions, will in the near future in the next 12 – 18 months result in an expanded more regulated sector with greater competition particularly between exchanges and tighter profit margins than in the past.” Speaking after his expert contribution to Crypto Expo Dubai, Lian suggested this meant that decentralized exchanges, and privacy platforms, will be more clearly separated from the mainstream than in the past. “What does this mean for mainstream exchange service and offerings? The bottom line is that it’s got to be led by the needs of the community, by the exchange’s users,” he added.

How best to accomplish this community involvement is clearly still up for grabs. Notable are the remarks by Ethereum’s co-founder Joseph Lubin who has questioned the longer term viability of Solana, which in his eyes pays overly generous rewards to users validating transactions on the network, all backed up by generous VC cash. Solana needs to “figure out a more sustainable business model for the network”, Lubin said. In response to Lubin’s criticism, Solana Labs, said that “simply looking at protocol revenue doesn’t tell the full story of the long-term performance” of a blockchain’s economic model. Figuring out the economic model for crypto businesses, faced with new regulation and Russian sanctions, whether decentralized or centralized, is key to the future of the long term future of the crypto sector.

Speaking on the panel ‘Why are crypto exchanges still flourishing?’ at Crypto Expo Dubai on March 16 Lian warned: “I believe being regulated is a very good thing, it’s the reason I invested my time in giving cryptocurrency and blockchain advice to government over the years. But the thing is we also have to understand the other side of the crypto startup equation which is innovation; if we kept ourselves solely in the sandbox environment, in a closed regulated environment it the real risk is the innovative decentralized aspect will be lost and we’ll end up with a centralized world.”

 

Original Source: https://www.securities.io/are-regulations-and-sanctions-driving-change-in-the-crypto-industry/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

GameFi Is Driving the Future of the Metaverse: Here’s Why

GameFi Is Driving the Future of the Metaverse: Here’s Why

The gaming industry is worth billions of dollars, predicted to generate $179.7 billion in 2020, with by comparison the global film industry reaching $100 billion in revenue for the first time in 2019.

 

According to Statista, over 2.7 billion people in the world actively or passively play video games, with China ranked first as the biggest gaming market just ahead of the US. In this dynamic market, the latest innovation, a crossover genre between crypto and gaming is a new breed of play-to-earn games or GameFi. GameFi is a concept that provides monetary incentives to gamers through a play-to-earn model, as opposed to the traditional “play-to-win” model that has been popular in the gaming industry.

 

How is the metaverse taking shape?

The Metaverse concept has also recently gained popularity, thanks in part to incorporating blockchain technology into GameFi, but also clearly driven by the growth of the gaming market. Not surprisingly tech titans dominated by gaming including Microsoft, Samsung, and Sony are joining forces to form the XR Association, which is aimed at bringing this concept of an ‘experiential reality to life.

 

Not to be outdone at the end of June Facebook CEO Mark Zuckerberg made a big bold play, basically laying out the future for Facebook in the metaverse, before changing the company’s name to Meta, reflecting the company’s growing ambitions beyond social media. Zuckerberg declared that “the metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy.” Microsoft, worth $2.5 trillion, and $731 billion Nvidia, quickly followed suit with their own metaverse visions, reported Forbes.

 

Of course, anyone who’s seen the movie The Social Network, or has seen recent evidence on how Facebook can do harm through manipulating its online users’ behavior, is certainly going to wonder if the metaverse is going to be safe with a giant like Facebook. As Tim Sweeney, the CEO of leading gaming company Epic, which has raised $1 billion to support their long-term vision of the metaverse, remarked:

 

“This Metaverse is going to be far more pervasive and powerful than anything else. If one central company gains control of this, they will become more powerful than any government, and be a god on Earth.” And as UK-based blockchain startup Outlier Ventures pointed out, the need to have a crypto decentralized core is therefore paramount: “The defining characteristic of a true Metaverse is that it needs its own economy and currencies native to it, where value can be earnt, spent, lent, borrowed or invested interchangeably in both a physical or virtual sense and most importantly without the need for a government.”

 

According to metaverse proponents, the success of GameFi coupled with the growth of NFTs may provide the solution required to make a more inter-operable metaverse which is free from domination by the likes of Facebook a reality. It’s also worth noting that China has itself started to take the metaverse seriously, presenting China with

 

“great opportunities and revolutionary effects,”

 

Zuo Pengfei, a researcher at the state-affiliated Chinese Academy of Social Sciences, argued in a September article. It’s interesting that more recently Zuo, agreed that the metaverse has “an inherent monopoly gene,” and that care must be taken to “avoid the metaverse being monopolized by a few forces”, according to a report in Quartz.

 

What’s also worth considering is that both Facebook, with its Novi wallet and cryptocurrency in the shape of Diem, and the Chinese central bank the PBOC, with its digital yuan, both have the DeFi capacity to monetize gaming in the metaverse to the tune of billions of dollars. So, any more decentralized version of the metaverse, reliant on using cryptocurrencies to power the virtual economy, needs to be aware of that reality from the get-go.

GameFi: Disrupting the online gaming industry

The play-to-earn model has shaken the online gaming industry, with traditional players looking to switch to GameFi projects like Axie Infinity. Cryptocurrencies have already been successfully integrated recently into virtual worlds created by companies such as Decentraland and Sandbox. For example, users in Decentraland can purchase virtual real estate such as theme parks and monetize them using cryptocurrencies.

 

BigONE believes that the rise in popularity of GameFi projects such as Axie Infinity played a significant role in GameFi’s mainstreaming. GameFi has been in the works since 2017, with the introduction of CryptoKitties. Still, it did not go mainstream until this year, with the popular game Axie Infinity reaching a market cap of over $1 billion in 2021. Before “play-to-earn,” gaming assets and tokens could not be used outside the gaming environment and had no real-world value. With GameFi, in-game purchases can now have real value and have applications outside of the gaming environment.

 

A key factor contributing to the disruptive power of GameFi is that it is built upon blockchain technology rather than traditional gaming apps built using Java and Unity frameworks. Plus, from a technical perspective, GameFi is generally easier to implement and develop. Such is the threat from GameFi that traditional gaming publishers such as Ubisoft and Epic Games have suggested that GameFi is the future of their blockchain-based games strategy.

 

BigONE believes that this is yet another indicator of GameFi’s meteoric rise and why it is the future of gaming. According to reports from the Philippines, Axie Infinity, the largest GameFi project, is a huge source of income for the people of the Philippines, paying some of the citizens more than the country’s average salary. In addition, reputable investment firms are beginning to invest more in GameFi initiatives, with Solana Ventures, FTX, and Lightspeed announcing a $100 million GameFi fund recently.

 

GameFi and the future of the metaverse

What’s clear is that whoever wins the battle to control the metaverse will need to use some kind of digital currency to power the virtual economy. The more monopolistic the approach the more likely this will result in something like a Novi, a dollar-based stablecoin as the de facto default currency.

 

Despite Zuckerberg’s awareness that by its nature the metaverse is inter-operable, rather than a ‘walled garden’, the amount of money and effort put into this virtual space shows that first-mover advantage will make a difference in the web3 world just as much as the current web 2.0 digital economy, where the likes of Amazon and Google reign supreme.

 

It’s up to the leading GameFi companies like Axie Infinity to show that the more choices there are for users to earn money from gaming or creating, the stronger the metaverse will be for all participants.

 

A more decentralized vision of the metaverse inspired by the likes of GameFi startups such as Axie Infinity would support the kind of metaverse that gamers, DeFi traders would welcome.

 

“While there is room for many different visions of the metaverse I believe GameFi is showing the way, with a decentralized model for gaming and earning money based on trading tokens and NFTs. This is the metaverse where people have greater choice and opportunity, to come together to form their own communities and economies.”

 

 

 

 

 

Original Source: https://hackernoon.com/gamefi-is-driving-the-future-of-the-metaverse-heres-why

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j