What DAOs Can Do: $6.75 Million in Ethereum for Ukraine

What DAOs Can Do: $6.75 Million in Ethereum for Ukraine

On Saturday morning, Ukraine received $57 million in cryptocurrency donations to help its defense against Russia, according to a blockchain tracker Elliptical. the New York Times and others have called this amount “a drop in the bucket in the context of the conflict”, but it is not a small sum in any context, and it is 57 million dollars that Ukraine is happy to receive.

Of that total, $6.75 million in ETH came from Ukraine DAO, a decentralized autonomous organization formed by group founder Pussy Riot, which raised funds by selling a simple NFT of the Ukrainian flag.

I can’t think of a better argument right now for the power of DAOs and NFTs.

DAOs in particular could use reputation help. After the general public fascination last fall around ConstitutionDAO, which raised more than $40 million but failed to win its award, the more recent media treatment of DAOs has become derisive after a DAO bought the “Dune Bible”, a script for a “Dune” movie that was never made, and mistakenly thought that owning the physical document would give them intellectual property rights to the content. The sneering tech press happily covered the band’s confusion with headlines like this from Kotaku: “Crypto Losers buy copy of Jodorowsky’s Dune, played themselves.” The edge this week had the savviest take: Spice DAO is “more interesting, and perhaps more serious, than a deluge of Twitter dunks suggested.”

DAOs certainly have their design flaws. They’ve been described as internet groups with a portfolio, which is accurate (if imprecise) and also helps explain why it’s hard to believe they’re the future of business, as advocates point out. While cryptoland loves the ideals of leaderless organizations and group decision-making, some organizations (and certainly businesses) need leaders, a hierarchy, and a board of directors.

And “decentralized autonomous organization” is a misnomer: DAOs are not decentralized when they start (because somebody must create them, then he can “gradually decentralize” later), and they are not autonomous (quite the contrary: they operate on the vote of human beings.) Like Erik Voorhees, the ultimate DAO supporter who turned his company ShapeShift into a DAO, said on our gm podcast last month: “The ‘a’ [in DAO] is problematic…but I don’t know of a better term, and this term has stuck so well that I don’t know if it’s going to change. “Autonomous” should really be reserved for the realm of smart contracts themselves.”

DAOs are at their best when mobilizing cryptocurrencies around a legitimate cause, and that’s what the Ukrainian DAO did: it raised funds quickly, then sent them quickly to the cause. It had an immediate impact. Alona Shevchenko, a Ukrainian activist in England who created Ukraine DAO, said Decrypt : “That’s exactly what DAOs are for, bringing offline change to the real world by harnessing the power of blockchain.”

Read this quote again: Harnessing blockchain to effect change offline, in the real world. This is what crypto has done for Ukraine as the world discovers the benefits of digital money which can be sent much faster and cheaper than bank transfers.

Amid the flood of crypto donations, many media outlets predictably focused on the negative: This crypto could help Russia avoid sanctions. But as we wrote in this column last week, crypto can help the good guys or the bad guys; technology is agnostic. Ukraine will gladly take your Bitcoin, Ethereum, Dogecoin, Polkadot, whatever.

The charitable giving industry and the crypto-skeptical mainstream business press should learn a lesson from all of this. And the lesson is not that crypto is evil.

This is Roberts on Crypto, a weekend column from Decrypt Editor-in-Chief Daniel Roberts and Decrypt Editor-in-Chief Jeff John Roberts. Sign up for the Decrypt Debrief email newsletter to receive it in your inbox every Saturday. And read last weekend’s column: Ukraine, Bitcoin and the “World’s First Crypto War”.

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