ukraine cancels planned crypto

Ukraine’s government abruptly canceled its planned crypto airdrop and said it would instead sell NFTs to raise funds following last week’s Russian invasion. Mykhailo Fedorov, the Vice Prime Minister of Ukraine and Minister of Digital Transformation of Ukraine, announced on Twitter that they decided to cancel the airdrop and will release an NFT collection to support the Ukrainian Armed Forces.

“After careful consideration, we decided to cancel airdrop,” Fedorov wrote on Twitter. “Every day there are more and more people willing to help Ukraine to fight back the aggression. Instead, we will announce NFTs to support Ukrainian Armed Forces soon.”We do not have any plans to issue any fungible tokens.”

Crypto community continue to support Ukraine. I am grateful to @gavofyork, who made an impressive donation of $5M from @Polkadot$DOT.

Ukraine cancels planned crypto airdrop

This will certainly contribute to the Ukrainian victory as well as support civil people. We will win — the best people with us.

— Mykhailo Fedorov (@FedorovMykhailo) March 1, 2022

The official Ukrainian crypto wallet for donations reportedly received $7 million in donations after the airdrop announcement, which became a topic of debate on Crypto Twitter.
While the minister didn’t reveal the reason for the cancellation of the airdrop, some in the crypto community were not happy about the U-turn, while others, like Twitter influencer Cobie, found some humor in the situation.

The Ukrainian government had promised an airdrop on March 3rd at 6 p.m. GMT +2 for those who donated to the crypto fund. The announcement came after they received millions in crypto donations to support their country against the Russian invasion.

Airdrop confirmed.

The announcement was followed by a promise from the government of Ukraine will reward donors with a secret token to be revealed at the airdrop’s launch time.

Peaceful World Token is a Scam

For the upcoming airdrop, Ukraine opted for Peaceful World as its token. Unfortunately, the scammers minted approximately 7,000,000,000 (7 billion) WORLD tokens.
Pachshield affirmed that the supposed peaceful world token is a scam; he explained that the scammers sent most of the WORLD tokens to the Ukrainian address and then moved the tokens to other addresses.

According to a tweet by Fedorov via his official Twitter handle, the vice prime minister announced the cancellation of the proposed airdrop.

Ukraine cancels planned crypto-137

The project is selling the token for the express purpose of raising capital. One high-profile example of this isConstitutionDAO, which raised tens of millions in hopes of purchasing a copy of the U.S.

constitution. “ That token ended up going through the roof,” Waugh says. “I imagine something similar could end up happening [with a Ukraine token] just because of the name.”

With the second route, the idea is to hit some non-financial goal such as awareness of a donation campaign. The project could use a mechanism that incentivizes distribution of more tokens, perhaps by allocating a percentage of airdropped tokens to be given away by each holder, Waugh says.
“If I get 100 tokens, maybe 10 tokens aren’t actually mine, but I’m able to send them out for free,” he says.

Ukraine cancels planned cryptoapi

If they were going to do a snapshot, what that would mean is that a token would be distributed. On the back of that snapshot, all the people who contributed, we get a proportional share of that token,” Waugh explains.

  • What happens after an airdrop?

Whatever amount donors were set to get, a token is only as valuable as its utility (or at least, the perception of its utility).

Ukraine never announced any plans for a token beyond a possible airdrop, so I asked Waugh to sketch out the possible routes a token designer could take.

Waugh explains there are two basic paths for a project doling out a token to take: extract as much financial value as possible, which he doesn’t recommend, or optimize for social impact.

With the first route, the model looks more like a Kickstarter or other crowdfunding campaign.

Ukraine cancels planned crypton

Days after Russian forces entered Ukraine, the country’s official Twitter account had become a major conduit of information about the invasion. But it was also something more: the account became the launching point forfundraising cryptoto help the nationrepel the invasion.

This meant Ukraine’s government started engaging with the vocal crypto community on Twitter and even adopted crypto-nativefundraising tactics.
On March 2, Ukraine’s official twitter account posted: “Airdrop confirmed” then gave details about a planned “snapshot” to come the following day.

This might appear to be gibberish to many people, but for crypto Twitter, this showed that Ukraine was using some of the DAO world’s most established mechanisms for launching a token — mechanisms with the potential to raise funds for the country while also enriching donors.

The idea behind the scam was to pump WORLD and then dump it. After the spoof, Ukraine announced it wascanceling its airdrop, switching instead to an NFT fundraiser.

  • What lessons about crypto can we take from this failed airdrop?

For Waugh, the important underlying issue is that the point of DAOs is to coordinate people on the internet on a global scale.

“It shows the power of a DAO, right? When a big event in the real world happens, a lot of people scramble to make these communities and make some meaningful stuff happen,” he says.

He points to the fact that DAOs raising funds for Ukraine, likeUkraineDAO led by Pussy Riot memberNadya Tolokonnikova were established in days, with thousands of members taking part in discussions and donating funds.

Some airdrops involve a lot of money: like the $75,000 one 25-year-old Bored Ape holder received when that projectissued ApeCoin.

In Ukraine’s case, Waugh says tweeting about an airdrop was a savvy move.

“Someone on their team has a bit of crypto context, and this is the play, you know? They’re just talking about an airdrop and the donations went straight up,” he said.

Indeed,$4 million poured intoUkraine’s Ethereum wallet the day after the airdrop tweet went out.

  • What about “snapshot?”

A snapshot is simply the point in time that a project uses to reference who gets the airdrop. In the case of Ukraine’s planned airdrop, the snapshot would have taken place on March 3, meaning users still had time to donate in order to be part of the airdrop.

This explains the rush to donate after the Ukraine account tweeted about an airdrop.

Ukraine’s airdrop attempt and the subsequent cancellation gives us a glimpse into the tactics that fuel DeFi, DAOs and NFTs today. We talked to an expert on all three who has worked with some of the most successful DAOs in the space to get a sense of what the Ukrainians could have done or done differently in adopting crypto norms.

Introducing our DAO expert

That expert is James Waugh, a 20-something New Zealander who is part of a group called 🔥_🔥 (pronouncedFire Eyes DAO, and hereafter referred to as such).

You can think of Fire Eyes DAO as a sort of McKinsey for crypto. It’s worked with some of the most successful protocols and communities out there, helping them shape economics, governance, culture and more.

Fire Eyes was born in the summer of 2020, a period known in the crypto community as the DeFi summer.

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