You’ve probably come across at least one article announcing the tens of millions of dollars in charitable contributions to the Ukrainian government thanks to the kindness of cryptocurrency holders and supporters.
However, a snapshot of data from the Ethereum blockchain shows that the vast majority of transactions over the past five weeks – from when Ukraine started accepting crypto donations until the end of March – happened on a period of less than two days, when donors thought they would. receive an airdrop in exchange for their contribution.
An airdrop is basically a huge giveaway that usually involves distributing cryptocurrency tokens to users.
The number of daily Ethereum transactions made to the Ukrainian wallet address from February 26 to March 31.
Credit: Etherscan
In short, most cryptocurrency donors sent money to Ukraine because they thought they could personally benefit from their donation. How? ‘Or’ What? Later, selling a reward they would receive in exchange for their given crypto, treating their contribution more like an investment.
On February 26, 2022, the official Ukrainian government Twitter account surprised many people online when it announcement it would start accepting donations via cryptocurrency. The tweet included the official addresses of Ukraine’s Bitcoin and Ethereum wallets where crypto holders could send donations. Ether (ETH), the currency that trades on the Ethereum blockchain, is one of the two largest cryptocurrencies, second only to Bitcoin.
According to public data from the Ethereum blockchain, more than 2,800 Ethereum transactions were sent to the Ukrainian wallet address on this first day. On February 27, just over 3,000 transactions were made.
One would expect an influx of transactions in these early days due to the hype spreading through the cryptocurrency space and the subsequent media coverage. However, on February 28, Ethereum transactions sent to Ukraine were already down, with just over 1,200 transactions.
Then on March 2, 2022, Ukraine tweeted “drop confirmed.” The window to participate in the parachute drop would last until March 3.
Airdrops can take the form of a non-fungible token (NFT) or a fungible token, such as depositing free coins into users’ wallets.
Because tokens are financial assets, airdrops are marketing stunts that reward people monetarily. Once an airdrop is received, holders can turn around and exchange those tokens for fiat currency, such as US dollars. And to get this reward, you have to somehow join a crypto project. In this case, by making a donation to the official address of the Ukrainian government wallet.
On the day of the airdrop announcement, Ethereum transactions jumped from around 2,400 to over 33 600. On March 3, over 25,600 transactions were made and it could have been more. However, hours before the deadline to donate to receive the airdrop, Ukrainian Deputy Prime Minister and Minister of Digital Transformation of Ukraine Mykhailo Fedorov announced that the airdrop was canceled.
Ether donations to Ukraine immediately plummeted. The day after the airdrop was cancelled, only about 840 transactions were sent to Ukraine and continued to halve each day thereafter. Only about two to three dozen Ethereum transactions per day have been made in Ukraine over the past week.
So why did Ukraine cancel the planned airdrop? Because Ukrainian government officials realized that many crypto donors were indeed trying to profit from their charitable contribution, which was intended to help Ukraine as Russia invaded the war-torn country.
According to Ukraine’s Deputy Minister of Digital Transformation on IT Industry Development Alex Bornyakov, “a lot of people” started sending incredibly small amounts of Ether, clearly just to receive the airdrop.
There was no minimum donation set by Ukraine to receive the airdrop, so apparently even very small donations could have received the bribe.
“People started wanting to make a profit,” Ukrainian Deputy Minister of Digital Transformation on the development of the IT industry, Alex Bornyakov, said in an interview with Motherboard. “I personally don’t think it’s ethical.”
In the end, the cryptocurrency promoters certainly emerged victorious, regardless of what happened with the airdrop. The media has rewarded the cryptocurrency industry with positive media coverage due to the millions of charitable contributions sent to Ukraine.
In reality, however, the intent behind most of these deals was anything but charity.