The Ukrainian government has confirmed that donors who have contributed crypto to fund its military struggle with the invading Russian army will be in line for an airdrop of tokens.
In the early hours of March 2, Kyiv wrote that its airdrop was “confirmed,” with a snapshot to be taken on March 3, and “reward(s) to follow.”
Some reacted with surprise after the Ukrainian government posted news of its airdrop plans, musing (with a pinch of salt, perhaps) that it looked like an initial coin offering (ICO) was afoot, although some claimed they were uncomfortable with the idea of “profiting from war.”
And while some well-known observers and industry insiders opined that the government is more likely to give out non-fungible tokens (NFTs) than fungible coins, others argued that the plan for the airdrop is not ready yet – but that the comments will end up deciding.
On Twitter, the Ukrainian government wrote:
“The people of Ukraine are grateful for the support and donations from the global crypto community as we protect our freedom.”
Meanwhile, the country’s tax authorities have announced that captured Russian equipment, including tanks, do not need to be declared as taxable income. However, whether this airdrop would be taxable is unclear, though it is possible.
The government has opened the door to crypto in a bid to crowdfund its fight against the Russian invasion, using bitcoin (BTC), ethereum (ETH), tether (USDT), and polkadot (DOT), claiming that “more cryptocurrencies will be added soon.” And the move was followed up by a USD 5.8m donation from the founder of the Polkadot network Gavin Wood.
Mykhailo Fedorov, vice prime minister of Ukraine, announced on March 2 that the country is now accepting donations in dogecoin (DOGE) as well – adding that DOGE exceeded Russian ruble in value.
On Wednesday morning (UTC time), Elliptic explained that “several other [crypto] donations of more than USD 1 million” had made donations both to the Ukrainian government “and NGOs providing support to the military” to the tune of USD 33.8m, through “close to 30,000 cryptoasset donations since the start of the Russian invasion.”
By 12:15 UTC, following the airdrop announcement, the number went up to USD 37.9m, through more than 48,000 cryptoasset donations, per Elliptic.
Per the data, a CryptoPunk NFT worth some USD 200,000 had also been donated and was now in the Ukrainian government’s ethereum wallet.
Data from SlowMist, meanwhile, appeared to show that combined Ukrainian government and NGO donations in crypto were actually closer to the USD 51 million mark. A number of the NGOs and associated charities accept donations in other altcoins.
A further 0.2 million worth of DOT has also been contributed, per the data compilers, in addition to a single BTC donation worth USD 3m. This comes on top of a USD 10m donation from the crypto exchange Binance, as well as a donation from the FTX founder Sam Bankman-Fried.
But it is not just centralized crypto exchanges and their founders who are getting in on the act: one of the most popular decentralized exchanges in the crypto world, Uniswap (UNI), announced that it had created an interface that allows crypto users to convert all ERC-20 tokens to ETH and donate them to the Ukrainian government in a single transaction.
The exchange wrote that as the addresses thus far shared by the Ukrainian government are wallets on a centralized exchange “that appears to accept only USDT and ETH,” it had built its “interface so anyone who wants to donate but holds other ERC-20 tokens can do so with one click.”
Hayden Adams, the Uniswap founder, noted the significance of the move, writing:
“DeFi tools and incentives are currently being used by a sovereign nation to fund war efforts, during an ongoing invasion from a nuclear power.”
The conflict appears to have escalated, with Russian forces claiming on March 2 to have captured the Southern port city of Kherson. Airborne soldiers are also reported to have been deployed to Kharkiv, with a large convoy of military vehicles reportedly still posted outside the capital Kyiv.